“Craft beer began bubbling up through the cracks in China about five years ago. But it may still account for as little as 0.01 percent of the domestic beer market - the world’s largest with 50 billion liters consumers in 2011 alone.”
That’s well over 400 million barrels, about twice the size of the US beer market. It also means that China’s craft production in 2011 was somewhere around 40K bbls, if this guesstimation from China Daily’s European Edition is to be trusted - the source pegs US craft share at 12%, a big overstatement though. Regardless, it’s still early days for craft beer in China, but like the US and other markets, it’s changing rapidly.
This China Daily piece, like others, points to the importance of expats: Americans or Europeans that brought their excitement for beer with them in their move to China. But Chinese natives are starting to get it too, an essential step in the spread of any idea or invention. A quarterly Chinese beer magazine, Hops, got its start as an English-only publication in 2011. Last year it began publishing in Chinese too and “now that’s bigger than the English one,” managing editor Kathryn Grant told the paper. Recall that American craft had its roots in visits to European breweries, whether German, Belgian or English and subsequent desires to bring those flavors and the associated cultures stateside.
Grant also offered that craft beer is changing the drinking culture in China: “it’s not just ‘ganbei’ (drink to get drunk) culture anymore.” Instead, drinkers are drawn to the flavors of the new beers, like in the US. One expat, Michael Jordan, brewmaster at Boxing Cat Brewery in Shanghai said that “we’re definitely seeing a trend switch, where locals are getting into different styles of beers.” Grant echoes that sentiment and builds on it, noting that Chinese-owned breweries “are actually more experimental,” because they’re using local ingredients that they’re already intimately familiar with but that foreigners may understand less - “like ginseng, asparagus, seaweed, aniseed and Sichuan pepper.”
The backdrop of these early days for Chinese craft beer is a growing overall beer market: “beer has been gaining popularity in China in recent years, while demand for wine and spirits has been losing steam.” While beer down slightly in US in recent years, we printed in Insights Express this morning that spirits’ growth has slowed over the last year and a half, at least in 17 control states. We'll continue to observe dynamics between alcohol segments here in the US, but every once in a while taking a gander at other markets, especially those as large as China, can be an interesting detour.