How can beer companies fuel China’s slowing beer industry?

Beer consumption in China has declined slightly since 2013 as more Chinese adults strive for healthier lifestyles.

When asked about their goals for 2017, Mintel research shows that four in five urban Chinese adults aged 20-49 say they definitely would have a healthier diet, while three in four would exercise more. These lifestyle goals have contributed to the stagnation of beer volume sales as Chinese adults reduce the quantity of alcohol they consume.

While volume sales of beer in China have dipped, value sales have increased slightly as adults drink less, but better quality alcohol. The trend toward premium brands is spreading as beer companies have created new higher-tier brands and imported more upscale varieties, while craft breweries have expanded in China. The increase in premium beer has driven an increase in value sales of beer at retail, as discussed in Mintel’s research on China’s beer industry.

Suntory’s Premium Chun Sheng Beer, for instance, is one of several premium beers launched in last year. The company notes that the beer is brewed using natural mineral spring water and Suntory’s original draft brewing technology to provide a crisp, rich and smooth taste. The product’s detailed taste description reflects that mouthfeel is the most prominent indicator of quality for Chinese beer drinkers.

Wheat beer and craft beer have potential to expand

Wheat and craft beer are among the beer types with the highest penetration rates among Chinese beer drinkers. In addition, some beer drinkers who have not tried wheat or craft beer would like to try them. More than a quarter of Chinese beer drinkers would like to try craft beer but have not, which could be due to the fact that craft beer is often more expensive and only available at on-premise locations.

Both wheat/white and craft beer reflect the trend toward premiumisation in beer and Chinese beer drinkers with high household income are most likely to have tried each type of beer and liked them. The likelihood of consumption of wheat and craft beer among beer drinkers with higher household income gives companies an audience to target.

As well, creating more beer recipes locally in China could help to tailor formulations to the preferences of China’s beer drinkers by including influential factors related to quality such as mouthfeel, alcohol content, flavour and ingredients. The development of more premium beers tailored to local taste preferences could attract more Chinese beer consumers.