By K.S. Anthony on 29 June, 2017

In The Country That Drinks Nearly 25% Of The World's Beer, One Craft Beer Rises

For over 13 years China has consumed nearly a quarter of the world's beer. In 2015, the Chinese consumed an estimated 43,266 kiloliters – over 11 million gallons – of the stuff and although they're slowing down, there's still plenty of opportunity in the Chinese beer market. FoxBusiness reports that craft beer in China has jumped 23% from 2010 to 2015 and Fortune recently profiled AB InBev's – the brewer of Budweiser, Corona, and Stella Artois – aggressive move to seize the lion's share of the craft beer market with Goose Island.

 

 

Fortune reports that AB InBev's strategy is simple: they mean to grab the attention – and taste buds – of China's younger, wealthier beer drinkers and are willing to take advantage of a lack of regulation and oversight in the market in order to leverage a position of power. As Fortune's Scott Cendrowski writes, "In the U.S., brewers can’t legally own bars or monopolize the beer a bar offers. In China, brewers can and do buy bars, in addition to controlling distributors."

On the other side of those softened regulations are brewing restrictions that America doesn't have to abide by. AB In-Bev imports all of its beer from America, where manufacturing rules are far less strict than those in China. 

What few people outside of China know is that the world's top selling beer is actually the Chinese brand Snow, which accounts to about 5.4% of the market share by volume according to Business Insider. There's nothing terribly special about Snow: it's a weak (4% ABV) lager produced by the state-owned China Resources Beer Co. and it is rarely seen outside of China. What makes Snow so popular – it holds about 25% of China's beer market – is its price: Quartz reports that it costs roughly 50 cents  for a 330ml can or a dollar for a one-liter bottle.

(credit: Yoshi Canopus/Wikipedia)

As in America, the craft beer market is aimed at an audience who doesn't necessarily just want the cheapest possible product. AB InBev spokesperson Nicky Chen told China Daily that "Craft (beer) plays an important role in the beer industry. It puts brewers in the spotlight and highlights consumer demand for flavors, provenance and storytelling."

"We are passionate about great beer and believe there is space in the market for a wide variety of products. Investing in specialty and craft brewers in different parts of the world is part of our strategy to build an exciting portfolio of premium brands that can meet the diverse and changing needs of our customers."

The move to diversify has paid off well for AB In-Bev: they are now the 3rd-largest seller of beer in China, ranked only behind Snow and Tsingtao. Those on the ground say that Goose Island's headway into the Chinese market is a promising sign of things to come. Gary Brown, who owns beer distribution company Top Shelf Asia, told Fortune, "It’s like Starbucks: If you see a bunch of their coffee shops going up in an area, you know it’s a pretty good one to be in.”

Topics: Food & Beverage, Asia Pacific, Business, International Business, China

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