Dale Breheny, Global Graduate, Shanghai Office, Bord Bia - The Irish Food Board
While the overall beer market declined by around 3% in 2016, the craft beer sector experienced volume growth of 4% for the same period. Despite this growth, the craft beer market is still very young, only capturing about 0.1% of the market in 2016.
This growth is driven by both imported and domestic brands, with microbreweries and brewpubs being a crucial channel for this niche market. The low-energy bar scene is becoming increasingly popular over the traditional club setting, and Western-style food, such as gourmet burgers, is usually a key part of the offering. The number of registered microbreweries and brewpubs increased from 20 in 2010 to roughly 80 in 2017, accounting for circa 750 beers in total in the market. These are concentrated in Tier 1 cities such as Slow Boat in Beijing and Boxing Cat in Shanghai, but are also seen to be emerging in Tier 2 cities.
The most popular local brand in the Shanghai premium craft beer market is the Shanghai Reberg Brewing Company, which has been long established, founded in 2011. Its products are distributed in over 2,500 stores across 75 cities in China. They also have an official online store at Tmall.com, with online becoming an increasingly important channel for alcohol retailing. The company have participated in various events and beer festivals which they have used to effectively raise brand awareness and launch new products, impressing consumers with its innovative marketing strategies and unique brand style.
Imported craft beers are also taking off, particularly on tap in the bar and pub channels, sold at an average price of around 12.40 euro per litre.
Brewdog (1) , a Scottish brand, is one of the leading imported craft beers, with an average retail price of 20 Chinese renminbi (2.50 euros) for a 33 cl serving in 2017 (6). They sold 20,000 hectolitres in China in 2017, and are also expected to open a brewery in the near future as China is a priority market for the company.
Consumers of craft beer are usually young and looking to expand their drinking portfolio with flavoursome, premium offerings. They view it as an opportunity for authentic and experiential consumption. From this, we can see that craft beer fits into Bord Bia’s Consumer Lifestyle Trends (2) of ‘Community and Identity’ and ‘Engaging Experiences’.
The outlook for the craft beer market in China is positive, with fast growth witnessed recently set to continue and increase its share in the overall beer market. The implications for Irish craft brewers considering entering the market are to make sure that they emphasize the premium quality and uniqueness of their products, be experimental and innovative with flavours and marketing strategies to help stand out, make sure to go through the right channels of low-energy bars and gastro pubs, and also be aware of stringent Chinese laws around areas like bottling and labelling.
1) About - BrewDog - Scottish Craft Beer Company. (2019). Retrieved 2 September 2019, from https://www.brewdog.com/uk/about
2) Consumer Lifestyle Trends 2018. (2018). Retrieved 2 September 2019, from https://www.bordbia.ie/globalassets/bordbia.ie/industry/marketing-reports/consumer-reports/consumer-lifestyle-trends-2018.pdf
3) EU SME Centre. (2018). The Beer & Spirits Market in China.
4) Euromonitor - Passport. (2017). Alcoholic Drinks in Shanghai.
5) GlobalData. (2017). China Beer & Cider Market Insights 2017.
6) IWSR. (2018). Domestic Volume Report - China.