Craft Beer Is About to Take Off!

When it comes to beer, people often think of green-bottled Tsingtao or Yanjing. However, with consumption upgrading, beer is gradually becoming a social drink like coffee, a vehicle for self-expression and social acceptance. A type of beer with high hop content, high alcohol, and high bitterness is increasingly being promoted—this is craft beer, which originated in the US.

Currently, craft beer is not only fiercely competing in traditional beer countries like the US, UK, and Germany, but is also heating up in Asian countries such as China and Japan. Brands like Panda Brew have been reported to have received tens of millions of yuan in investment.

So, how has craft beer heated up?

You might not be familiar with craft beer. In fact, as early as 1976, after the US opened its beer market, more than 3,100 craft breweries have developed, making it a mass consumer product.

Capital Favor

Tens of millions in financing poured into the craft beer circle

At the beginning of this year, when Beijing Panda Brew raised 20 million yuan, it went viral on social media. In this capital winter, this investment in craft beer was interpreted as a new era for Chinese craft beer.

In craft beer circles across the country, discussions among friends were like rapid-fire bullets, and it was hard to keep up with what everyone was saying. Even craft beer enthusiasts were overjoyed.

In the following days, the 20 million yuan financing was like a fermenting alcohol, and the craft beer circle seemed to hold a feast, with the effects of alcohol lingering for a long time.

▲ Panda Brew founder Pan Ding

Pan Ding told Kamen that after the news broke, besides congratulations from industry insiders, it also attracted many outsiders, with many people coming to him, including those wanting to learn the craft.

With 20 million yuan pouring into the craft beer circle, craft beer brands in major cities across the country were stirred up by this "deep-water bomb."

According to Kamen, before Panda successfully raised 20 million yuan, a Shanghai craft brewery had received angel and Series A investments, and other craft brands in various places also had investors knocking on their doors. It seems investors had already set their sights on this industry.

As Tang Binsen, one of Panda Brew's investors, said, the gap between Chinese and American people's lives is not due to high technology but consumer goods. What improves people's lives is products like craft beer, which are of higher quality than ordinary industrial beer. The US already has many excellent craft beer companies, while China lacks local brands.

Panda just fit the investors' choice. After receiving investment, it could get help from investors with FMCG experience, focus on branding, and use the 20 million yuan to build its own fermentation and bottling production lines.

Changes

2015: "Seemingly Blowout"

When it comes to beer, people still first think of green-bottled Tsingtao or Yanjing.

In fact, as early as six or seven years ago, a wave of craft beer swept the country, and even some well-known brands emerged.

Xiaobian'er from Beijing New Beer Hall said that in 2010, the imported term "Craft beer" (as opposed to "Industry beer") was called various names: self-brewed beer, handmade beer, etc., until later a few people in their circle unified it as "精酿啤酒" (craft beer).

At that time, even the founders of these brands, who had already formed their own styles, were still in the learning stage.

Wang Rui from Chengdu Harvest Craft Brewery, who got involved in craft beer in 2008, had to go through many twists and turns to learn. He paid high fees to have raw materials shipped from the US, studied with an American brewer who was about to return home for two days, and then figured things out on his own.

But just a few years later, enthusiasts not only consulted them and studied the industry leader Gao Yan's book "Brew Your Own Beer," but also often had a team or nationwide forces to promote them. Moreover, it was much easier for them to source materials and get information.

What impressed Wang Rui most was that when he first entered the market, merchants would calculate a cost-benefit:

At that time, there were industry hidden rules that excluded craft beer from the market. Now, craft beer, representing individuality and diversity, has broken this monopoly and even become a selling point for some stores to attract customers.

For Wang Rui, the most obvious industry warming was in 2015, "Suddenly, many small shops selling imported beer appeared on the streets."

Data shows that China's imported beer in 2014 increased by 85.59% year-on-year, and from 2012 to 2014, imported beer cumulatively grew by 426.81%. The seller's market and sustained demand growth show the industry is heating up.

Peers are also increasing. In 2008, Wang Rui was exploring alone. When the Chengdu Craft Beer Association was established in November 2014, it had only 7 members, but after a year of expansion in 2015, it reached over 130 people.

Harvest brand beer sales also increased from 1 ton in 2010 to 20 tons now. The domestic industry leader Nanjing Master Gao's "Baby Fat 3.0" sold 150 tons in just a few months.

Shanghai Laibo Craft Beer

During that year, craft beer associations across the country gradually developed and improved. Lin Lin from Shanghai Laibo Craft Beer, from an enthusiast to a participant, also witnessed and participated in the establishment of craft beer associations in Hebei and Inner Mongolia last year.

Like Wang Rui, Lin Lin can deeply feel that more and more enthusiasts around him are learning and sharing their understanding with others, "I feel that making craft beer is no longer so lonely."

Current Status

Craft beer is also sold in Tibet and Ningxia

Wuhan No. 18 Pub's business improved almost in sync with the warming of the domestic craft beer industry. From a loss-making bar that almost closed down to becoming a leader in Central China, the owner "Guangtou" is sure that this miracle was created by craft beer.

Now, No. 18 Pub is not only in the first tier of the domestic industry but has also cultivated a group of local customers, 90% of whom are young women. It has also formed an integrated operation system of self-production (brewery), sales (consignment), and consumption (bar).

Wuhan No. 18 Pub

Their beer is gradually going nationwide. Interestingly, it has also attracted a group of people who like to open restaurants and love craft beer, becoming a distribution and promotion channel.

Shanghai Laibo Craft Beer, founded in 2008, was the first to obtain QS certification. Now, their sales cover 2,500 channels including restaurants, bars, KTVs, star hotels, major supermarkets, and various online e-commerce platforms.

Many people have also found that business has become easier in recent years. According to You Lin Kao from Beijing Slow Boat Brewery, their bar sales increased by 350% in 2014. Now, Slow Boat Brewery is developing smoothly in China, giving them a sense of home.

Now when it comes to craft beer, Beijing has Great Leap, Slow Boat, Panda, New Beer Hall; Shanghai has Boxing Cat, Laibo Fresh Beer, Tap House; Wuhan has No. 18 Pub; Chengdu has Harvest; Nanjing has Master Gao. In addition, various new small craft beer houses are springing up like mushrooms, including in Tibet and Ningxia.

Looking at the whole country, except for a few provinces, local craft beer associations have been established in most regions. These non-profit organizations have driven the growth of the enthusiast community and promoted industry exchange and development.

It is also worth mentioning that the national and local beer exhibitions and competitions organized annually by the craft beer circle have greatly promoted the development of the craft beer industry in recent years.

Observation

The warming craft beer is a concentrated reflection of consumption upgrading

Lin Lin, who is devoted to the craft beer industry, drank his first craft beer 8 years ago, "I never thought beer could taste so good."

After that, as a person who loves this taste, when there was no craft beer to drink, he would rather drink plain water than settle for industrial beer.

When arriving in a city, Lin Lin would always explore local craft beer houses. To this day, he maintains the habit of drinking one or two craft beers a day.

Craft beer

As the industry warms up, Lin Lin finds that more and more post-80s and post-90s middle-class people are becoming craft beer consumers like him. The industry's warming provides convenience and possibilities for this group to consume, as they have the awareness and ability to consume new things that meet diversified and high-quality needs.

An industry analyst pointed out that the differentiation of beer categories is itself a typical example of consumption upgrading. The warming of the craft beer industry and the manifestation of consumption upgrading are complementary.

Based on its characteristics, craft beer can meet consumers' higher-level needs in terms of selection, quality, and production process:

Diversification: consumers have many choices

The taste difference from 0.1% to 67.5% ABV provides consumers with the possibility to experience more subtle differences in each beer under a single category.

Fast product iteration: a boon for novelty seekers

Individual, small, and convenient, brewers can release a new product every day, with fast iteration, meeting the needs of consumers who like to try new things and follow trends.

Craftsman spirit: meticulous raw materials and refined production

Craft beer masters with a craftsman spirit are willing to use good ingredients, using 3 to 5 times more raw materials than industrial beer to polish a good product. This care makes consumers associate it with high-end.

The importance of glassware

Different beer styles have different colors, aromas, flavors, alcohol content, foam, temperature, and mouthfeel. To maintain and convey these elements, different glass shapes are often needed, and the glass temperature must also be controlled.

The extra meaning of the bar

Craft beer houses can almost overturn the traditional understanding of the bar section. Moreover, it has become a window and channel for carrying craft beer culture, and even a lifestyle.

Source: Wine Industry

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