Despite an overall drop in alcohol sales, China’s beer industry witnessed good sales in the first six months, as the appetite of craft beers is increasing among the population. 

According to lager distributors and retailers in Beijing and eastern Shandong province, beer sales rose in the past six months ended June 30, owing mostly to a resurgence in the catering business and the arrival of summer earlier than normal.

Beer does not appear to be impacted by the economic cycle, according to beer professional Fang Gang, who spoke to Yicai Global. So, while alcohol sales were low in the first half, beer sales were unaffected.

According to the National Bureau of Statistics, China produced 15.1 million hL of beer in the first five months, an increase of 8.4 percent year on year. A fifth of this was generated in May, representing a 7% increase year over year.

A decrease in the cost of raw materials is also assisting.  Imported barley prices fell 12.1 percent year on year to USD359.80 per ton at the end of May.  The cost of packing materials like glass and aluminium has also decreased.

The success of industry leaders mirrored the favourable circumstances.  Yanjing Beer forecasts net profit to increase by 45 to 55 percent in the first six months compared to the same period last year, reaching between CNY508 million (USD70.8 million) and CNY543 million.

While Zhujiang Beer anticipates a 10% to 20% increase in net profit to between CNY345 million (USD48 million) and CNY377 million. The Guangzhou-based brewery moved 689,000 metric tons of ale over the time, a 7.5 percent rise from the previous year.

Rise of Craft Breweries

Craft beer sales are beginning to soar, especially as more affordable and beginner-friendly varieties enter the market, according to Wang Long, creator of craft beer brand Jing Doll.

Craft beer is one of the few beverage categories experiencing strong growth this year, according to Li Qing, chairman of Urbrew Craft Beer, which has over 2,000 locations across the country.

According to Li, the market for craft beer in China last year was worth CNY20 billion (USD2.8 billion). There were sales of between 3-5 million hL at a 10% market penetration rate.

According to business information platform Qcc, there have been 5,213 craft beer firms founded since 2020, with 1,207 of them having been registered in the first half.

Big lager producers are eager to enter this high-end market and not be outperformed by smaller competitors. Tsingtao Beer, Chongqing Beer, Yanjing Beer, and Budweiser Asia Pacific have all recently bought craft beer brands or set up their own manufacturing facilities for the beers.

Craft beer entrepreneur Bei Bei told Yicai Global that partnerships with large beer companies may help small brewers cut production costs, increase their sales channels, and build brand recognition.

SOURCE: Yicai Global