---
title: "Can Craft Beer Stir Up the Foam in the Beer World?"
description: "This article explores the rise of craft beer in China, from its historical roots to the current competitive landscape, and examines whether it can transition from a niche trend to mainstream consumption."
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published: "2022-07-22"
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# Can Craft Beer Stir Up the Foam in the Beer World?

> This article explores the rise of craft beer in China, from its historical roots to the current competitive landscape, and examines whether it can transition from a niche trend to mainstream consumption.

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**01 The Beer World: Rising Heat**
The sweltering summer arrives, with scorching sun and unbearable heat during the day.
After sunset, people venture out, gathering with friends at street food stalls, enjoying sizzling barbecue, spicy crayfish, and pouring crisp, cold beer into glasses, raising white foam, and drinking it all in one go—refreshing! Satisfying!
A summer without beer is incomplete. A history without beer is also incomplete. Beer has accompanied humanity for thousands of years, witnessing the historical evolution of different countries and nations, influencing dietary structures and human physique. When it met the Industrial Revolution, it sparked a wave that swept the world.
This article will discuss how medieval people drank beer as water and how industrial beer conquered the world. In China, the world's largest beer market, beer has experienced regional wars from "one city, one beer" to a mix of Chinese and Western forces, finally resulting in a "five-power hegemony." In recent years, drinking craft beer has become a new trendy lifestyle. This expensive, bitter beer is gradually gaining popularity.
Through this article, you can quickly and comprehensively understand how beer provided clean water and calories to humanity, how craft beer achieved its "Renaissance," the popular culture codes behind its global appeal, and how, with capital flooding in and brands gearing up, competition in the craft beer track is intensifying. On one hand, it is a golden track for rapid growth; on the other, it faces numerous difficulties. Can it move from a niche concept to mass consumption? Let's see how it stirs up the foam in this beer world.
**02 From "Craft Beer" to "Industrial Beer"**
Yuval Noah Harari, author of "Sapiens," posed a thought-provoking question: Did humans domesticate wheat, or did wheat domesticate humans?
Ten thousand years ago, wheat was just an ordinary weed, but now countless wheat fields wave across the world. Wheat is one of the most successful plants in Earth's history. Humans labor for it, weed it, and even settle near it.
Malt is the primary ingredient and soul of beer. Brewing one jin of beer requires about 2-2.5 jin of grain. In ancient societies with low production and grain yields, brewing beer was extremely luxurious and wasteful of food.
**Why, despite the preciousness of grain, did humans remain enthusiastic about using large amounts of it to brew and drink alcohol?**
Besides beer's addictive nature, a major reason is that alcohol has disinfectant and sterilizing properties. During the dark Middle Ages, plagued by epidemics and wars, Europeans dared not drink dirty water and resorted to heavy drinking. By the late 17th century, brewing beer consumed half of England's grain.
At that time, every household brewed beer, essentially "craft beer," because controlling temperature, time, and ingredient ratios during fermentation was difficult. Small-scale, decentralized production led to fluctuating flavors and unstable quality. Occasionally, the taste was good, but often indescribable, yet people drank it anyway, as grain and clean water were precious.
Before the Industrial Revolution in the 18th century, workers flooded into cities, populations swelled, and demand for beer surged. Workers needed large quantities of cheap, consistent beer to relieve fatigue and provide calories.
After the 19th century, automated production lines greatly increased beer output. In 1865, Pasteur discovered pasteurization, extending beer's shelf life. In 1873, the invention of freezers and industrial refrigerators allowed beer to ferment and store at low temperatures. Railways, shipping, and aviation expanded beer's distribution, enabling rapid transport worldwide.
**Thus, over a hundred years ago, the era of mass-produced, stable "industrial beer" arrived.** Merchants, driven by profit, reduced malt usage in large-scale production, lowering malt concentration and making the taste bland, evolving into what drinkers now call "water beer," which is over 90% water, with an alcohol content of 2.5-5%, a single, light taste, and little foam that dissipates quickly.
According to global sales data from various beer companies, Global Data Consumer compiled the 2021 sales ranking. The world's top seller was China Resources Snow from China, with total beer sales of approximately 11.056 million kiloliters in 2021.
**From the global beer consumption distribution, China is the world's largest beer market.** In 2020, global beer sales reached 187.698 million kiloliters, with China selling 42.694 million kiloliters, accounting for 22.7% of global sales, making it the largest beer-consuming country.
In China, beer is an imported product, with only a few decades of widespread sales and consumption, but it has already experienced regional wars, mixed Chinese-Western competition, and finally a "five-power hegemony." Now, new variables are entering the market.
**03 From "One City, One Beer" to "Five-Power Hegemony"**
In 1900, due to the construction of the Chinese Eastern Railway, many foreign immigrants entered Harbin. To meet the needs of foreign residents, a Russian named Ulublevsky saw a business opportunity and built a brewery in Harbin—Ulublevsky Brewery (predecessor of Harbin Brewery), becoming China's first brewery.
Three years later, British and German entrepreneurs jointly established the Anglo-German Brewery in Qingdao, the predecessor of Tsingtao Brewery. **Over 100 years ago, beer, as an imported product, was described by Chinese people as "color like horse urine, taste like herbal medicine."**
After the founding of New China, China's beer industry began to develop. In 1949, there were only seven or eight breweries, with an annual output of 7,000 kiloliters. By the end of 1978, annual output had reached 400,000 kiloliters, over 50 times that of the early days of the nation.
In the 1980s, **under the reform and opening-up policy, establishing breweries became a national trend, and local beer brands rose. Almost every city had its own unique beer brand, a true "one city, one beer" phenomenon.** In 1988, the number of breweries peaked at 813, even penetrating counties and towns.
This "beer war" was a hundred schools of thought contending, with brands everywhere: Harbin Beer, Jiafeng Beer, and Yalu River Beer in the northeast; Five Star Beer, Beijing Beer, and Great Wall Beer in the north; Yellow River Beer and Wusu Beer in the northwest, often paired with lamb skewers; Tsingtao Beer, Reeb Beer, and Nanchang Beer in the east; Zhujiang Beer and Kingway Beer in the south; and Lanjian Beer, Dali Beer, and Lhasa Beer in the southwest... Many who experienced the 1980s likely have a favorite local beer brand.
China's beer output grew from 22.31 million kiloliters in 2000 to 49.83 million kiloliters in 2013, an increase of 123.35% over 13 years, with only one decline in 2012. Since 2014, output has been declining, from 49.83 million kiloliters in 2013 to 35.62 million kiloliters in 2021, a total drop of 28.5%. In 2021, it fell back to 35.62 million kiloliters, roughly equivalent to 2006 levels.
**Accompanying the growth in China's beer output were numerous "big fish eat small fish" mergers, acquisitions, and reorganizations, with hundreds of local beer brands disappearing from sight and life.** Today, China's beer market is dominated by a "five-power hegemony": China Resources Snow, Tsingtao, AB InBev, Yanjing, and Carlsberg. In 2020, market shares were: China Resources 31.9%, Tsingtao 22.9%, AB InBev 19.5%, Yanjing 10.3%, and Carlsberg 7.4%.
As the main beer-consuming demographic transitions to the post-90s and post-00s generations, influenced by new drinking habits, the long-stable beer landscape is beginning to shift. In recent years, drinking craft beer has become a new trendy lifestyle. This beer, with its rich taste, diverse flavors, and strong aroma, but higher price, is gradually gaining popularity domestically.
**04 Craft Beer: The Revival of Traditional Beer**
**All trends originate from retro.**
Craft beer is called "craft beer" in English, with "craft" literally meaning "handmade," referring to beer brewed by hand, extending to home brewing. In China, it's translated as "精酿," which sounds high-end, but it's essentially self-brewed beer. You likely have relatives or friends who brew sweet rice wine or bayberry wine annually, similar to foreigners brewing their own beer.
There is no unified, authoritative definition of craft beer worldwide. The common reference is the American Brewers Association's standards for craft brewer capacity and capital operations:
• Small: Annual production not exceeding 6 million barrels.
• Independence: Non-craft brewers or companies cannot hold more than 25% of the brewery.
• Traditional: Most of the beer's flavor must derive from traditional ingredients and fermentation processes.
In short, it protects small breweries that emphasize handcrafting and ingenuity but have limited output. In terms of taste, craft beer is richer, more varied, with higher malt concentration and fresher flavor compared to industrial beer.
In recent years, craft beer has become popular among young people in first- and second-tier cities who seek novelty, thanks to its fresher, more diverse flavors and richer malt taste. The circle has gradually expanded. **However, overall, China's craft beer market is still in an early, fragmented, and chaotic competitive stage, with a domestic market share of less than 3%. Whether it can move from a niche circle to mass consumption remains to be seen.**
By learning from others' strengths, we can review how craft beer rose in the United States and spread globally, uncovering the codes of its popularity.
In 1920, the United States enacted the famous Prohibition. By 1932, there were no breweries left. But the demand for alcohol could not be suppressed; many secretly brewed at home, and smuggling and illegal production flourished.
In 1978, after home brewing was legalized, the home-brew culture rose. The American hippie movement was a major driver of the craft beer trend. Hippies advocated a return to nature and a free-spirited lifestyle, growing vegetables, brewing their own alcohol, and promoting a "back-to-the-land" movement. The hippie movement brought rock music, environmentalism, liberalism, specialty coffee, and craft beer to America.
**Culturally, craft beer has always been diverse, individualistic, and niche, pursuing natural, traditional brewing methods, celebrating the myriad possibilities of handcrafted beer, opposing single industrial flavors and over-commercialization, and advocating a return to slow living. Craft beer embodies these values.**
Due to cultural differences, the domestic understanding of craft beer's return to handcrafting and opposition to industrialization may not be widespread, but cities with purchasing power are clearly more suitable soil for craft beer, as it is significantly more expensive than industrial beer.
According to a study by China Agricultural University on "Consumer Preference Analysis for Craft Beer," there is a positive correlation between craft beer consumption and personal spending levels. Consumers with a monthly average expenditure above 4,000 yuan are the main craft beer consumers; those spending below 2,000 yuan monthly rarely purchase craft beer.
The definition of craft beer is not static; it cannot be directly copied from foreign standards and applied to China's unique market. It need not be rigid about output volume. Brands that balance large-scale production with the authentic taste of full malt and real hops may forge a unique path for Chinese craft beer brands.
**05 Capital Enters, Storms Rise Again**
Although consumer volume is still small, the trend is clear. Where young consumers gather, capital follows. According to a report by Zheshang Securities, China's craft beer consumption in 2020 was 960,000 kiloliters, with a market share of less than 3%, but many players and capital have already entered.
According to Qichacha data, new craft beer brand registrations in 2019, 2020, and 2021 were 1,258, 1,683, and 2,668 respectively. By the end of 2021, there were over 5,000 existing craft beer-related enterprises. Incomplete statistics show that from 2021 to now, there have been 20 financing events in the craft beer track. In 2021 alone, craft beer brand financing exceeded 1 billion yuan.
In addition to numerous niche craft brands, beer giants are also entering the craft beer track to seek new growth points. Budweiser acquired craft brands Boxing Cat and Goose Island in 2017; Carlsberg invested in craft brewery Jing-A; in 2019, China Resources Beer acquired Heineken's China business, gaining several high-end beer brands; Tsingtao launched IPA, Classic 1903, and other craft categories; Zhujiang Beer launched Pilsner, Red Ale, and other craft beers; Yanjing Beer launched the "Yanjing Eight Scenes" and "Lion Stout" series.
Beyond beer-focused competitors, catering and retail platforms like Haidilao, Mixue Ice City, Genki Forest, Starbucks, Wanglaoji, Hema, and Meituan have also entered the fray. Public data shows that in 2020, Haidilao's own-brand craft beer sales reached 250 million yuan; Hema's 28-day fresh craft beer launched in 2021 became the top beer category across Hema channels.
**Currently, there are four main types of players in the craft beer track: independent craft brands, traditional beer giants, restaurant chains, and retail platforms.** As a result, competition in the craft beer track is intensifying. On one hand, it is a golden track for rapid growth; on the other, it faces numerous difficulties. Every year, many small craft breweries go bankrupt. The main challenges include:
**1. High capital investment and production costs.**
According to industry insiders, besides fixed asset investment, a qualified brewery needs filling equipment costing 20-30 million yuan and brewing equipment costing nearly 30 million yuan. Adding working capital, entrepreneurs need at least 100 million yuan in reserves to build a brewery.
**2. OEM models lead to product homogeneity and lack of unique flavors.**
Large, formal breweries require a series of licenses, which are time-consuming and costly. To save on production equipment and technical costs, most small and micro craft brands choose OEM production. However, OEM models are easily overwhelmed by homogeneous products, and with insufficient R&D capabilities, they cannot create unique, differentiated flavors, making it hard to build a loyal customer base.
**3. Independent craft beer brands find it difficult to enter offline dining channels.**
Offline dining outlets and other on-premise channels are the main consumption scenarios for craft beer. But the brands that survived the brutal "beer wars" of previous decades fought tooth and nail to "monopolize" catering and retail channels. It is nearly impossible to snatch channels from them.
Therefore, many independent craft beer brands have to build their own channels, such as self-operated bars, pubs, and specialty stores, which also helps create a better drinking environment and spread craft beer culture. This increases investment costs and operational pressure, and small and medium craft brands with limited funds are easily eliminated.
Craft beer brands place more emphasis on "space" and "social interaction." For example, Vanbeer has laid out both online and offline channels, including offline "craft beer experiment stations" and smart vending machines; Steam Bear is expanding its community stores; Jingdu Fresh Brew emphasizes a combination of new retail and community scenarios; Shíqīmén, with Chongqing characteristics, combines an online mall with offline experience stores.
**4. Insufficient consumer education and low category awareness.**
For the general public, beer has long played a supporting role as a "meal accompaniment and thirst quencher," with its refreshing taste and low price, making consumption effortless for both wallet and mind.
Craft beer, however, wants to take the lead. It is suitable for small sips, like wine tasting, allowing the mouth to fully contact the beer and appreciate its layers and complex flavors. The idea of "tasting" beer may be hard for Chinese people, whose culture is steeped in baijiu, to understand.
The domestic craft beer market is a mix of good and bad, lacking industry standards. Faced with a dazzling array of products, consumers find it hard to distinguish quality. As long as a product is labeled "craft," the price can triple or quintuple, leaving ordinary consumers unable to judge.
However, the decline in domestic industrial beer sales is an indisputable fact. In the craft beer market, a promising incremental market, entrants are gearing up, and a battle is about to begin.
Each side has its advantages. Independent craft brands have core circle recognition, more independent and varied flavors, and more flexible market responses. **Traditional beer giants, restaurant chains, and internet retail platforms have advantages in proprietary channels and consumption scenarios.** But for craft beer to transition from a niche hobbyist circle to a commercially and brand-operated mass consumer category, there is still a long way to go.
**06 Epilogue**
In 2011, Gao Yan, the pioneer of Chinese craft beer, published the book "Drink the Beer You Brew," spreading home-brewing culture in China. In the book, he described his first taste of craft beer:
"The first sip felt like a grand celebration in my mouth, awakening taste buds I didn't know existed: a hint of sweetness on the cool tip of my tongue, a burst of indescribable fullness in my cheeks; then, bubbles popping on the roof of my mouth, and the bitterness on the sides of my tongue invigorating my spirit; after swallowing, a lingering aroma and long aftertaste." Such descriptions inevitably make one eager to try craft beer, imagining how it might overturn taste sensations, with alcohol and soul dancing together.
**In the future, I believe China's beer market will be a hundred flowers blooming, with diverse coexistence, and it will be difficult to unify under a single standard.** Just like the widely discussed consumption upgrading and downgrading, China's market is large enough that at the same time, in different regions, demographics, and scenarios, so-called upgrading and downgrading may occur simultaneously.
On hot summer nights at night markets, people eating barbecue and crayfish need a few bottles of refreshing, greasy-cutting "big green bottles" to drink heartily; in bars, urban beauties with delicate makeup sip craft beer with varied flavors, savoring it slowly.
Beer also accompanies the passionate memories of youth: graduation farewell dinners, late-night chats on the playground lawn, celebration banquets after winning competitions... As glasses clink, foam spills, and memories and familiar tastes surge together.
**It is human nature to love the new and hate the old, but when it comes to taste, we are especially nostalgic. Perhaps for craft beer to truly reach the masses, it needs to steep in the memories of a generation.**
Source: Jinjibo Finance and Economics
(ID: jinbubo)
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