Customs data shows that from January to May 2024, China's cumulative beer imports fell 32.9% year-on-year to 134,110 kiloliters, with the value dropping 27.5% to 1.35673 billion yuan. Don't assume that rising temperatures in June will ease the situation for imported beer; in fact, it remains far from optimistic. Analysts at Gangtise Research believe that domestic beer sales in June are expected to fall short of expectations. Last year's data also corroborates this. Customs data shows that from January to December 2023, China's cumulative beer imports fell 13.2% year-on-year to 418,260 kiloliters, with the value dropping 6.6% to 4.05759 billion yuan. This raises the question: Are foreign beers being abandoned by Chinese consumers? Five Years of Hard Times "Imported beer has no off-season; summer sees more retail sales. Because those who drink imported beer drink beer all year round; they don't like baijiu, so they drink beer even in winter." In August 2017, Zhang Yaxi, head of a trading company in Zhengzhou, Henan, said this in a media interview. At that time, imported beer sales were booming, "On the busiest day, wholesale revenue reached hundreds of thousands of yuan, and daily retail revenue was tens of thousands of yuan." Zhang Yaxi explained: "The most popular beer we sell is 1664, a French beer, which is very popular because of its fruity aroma... Corona is also a popular imported beer, once very popular because it appeared in the movie 'Fast & Furious'." Image source: Movie "Fast & Furious" These imported beer distributors believed that in the next three years, imported beer would definitely become widespread, and the consumer base would grow larger. "We are very optimistic about the prospects of imported beer." The confidence of imported beer distributors was, of course, backed by industry trends. In short, in the past decade of China's imported beer market, 2012 saw explosive growth, followed by several years of "crazy beer" drama. Data shows that from 2014 to 2018, the growth rates of imported beer volume were 85.4%, 59.4%, 20.1%, 10.8%, and 14.7%, respectively. These figures show that growth was gradually narrowing, but still double-digit, which is why imported beer distributors remained confident. Then, unexpectedly, 2019 marked a major turning point for imported beer, and from that year on, China's imported beer market began a "slide." Data shows that in 2019, import volume fell 10.9% year-on-year; in 2020, it fell 20.2%; in 2021, it fell 10.2%; and in 2022, it fell 8.1%. As mentioned earlier, in 2023, import volume fell 13.2% year-on-year. In other words, since 2019, imported beer has endured five years of "hard times" in China. Among these, the pandemic's impact on the imported beer supply chain was a significant factor, but on the other hand, it is closely related to the development of imported beer in China. According to industry media "Yunjiu.com," compared to domestic beer's strength in channel control and deep distribution, imported beer has weaker channel control. When the pandemic hit and dining scenarios nearly disappeared, domestic beer brands could rely on ground teams and "store buyouts" to control terminals, while in China, imported beer lacked stronger brand awareness and larger market investment, "like trees without roots in the dining channel, they withdrew one after another." Now that the pandemic is over, imported beer can finally regain momentum, but the overall weak consumer demand has become a challenge it struggles to cope with. At the "2024 China Beer T5 Summit" held on July 6, Song Shuyu, Chairman of the China Alcoholic Drinks Association, stated that current alcohol consumption has entered a "three-rational era": rational pricing, rational drinking attitudes, and rational choices about what to drink. For imported beer, even just the "rational pricing" aspect is quite impactful. Even Dragons Must Coil, Even Tigers Must Crouch Last month, a blogger with over 200,000 followers on Weibo, "Huoyue," posted: "A certain imported beer that was out of stock for over a year is finally available online again. The price is even higher than the already exorbitant price before. I silently closed the webpage and wiped away tears..." Soon, netizens commented: "I'm tightening my belt to get by, but Teacher Huo is thinking about drinking every day." A price increase for one imported beer doesn't represent the overall situation. From an industry perspective, in the aforementioned weak consumer environment, imported beer also has to compete on price. For example, in January this year, Ye Haixia, a veteran in the imported beer industry, found during his year-end review that his company's beer sales had declined in 2023. Specifically, by product structure, products with an original wholesale price of 5-6 yuan per bottle saw an average price drop of 10%-15%, making 4-5 yuan per bottle the mainstream wholesale price for imported beer. "The consumption level of imported beer has slightly declined." By country of origin, there is also a trend of competing on price. In 2023, "Ranking and unit price of China's imported beer source countries" showed that imports from Germany totaled 143,900 kiloliters, accounting for 34.42% of total imports; the value was 880 million yuan, accounting for 21.66%, with a unit price of 6.1 yuan per liter. In contrast, imported beer from Belgium and the Netherlands had unit prices of 16.78 yuan per liter and 12.43 yuan per liter, respectively, with volumes ranking second and third, but their combined volume was only about half of Germany's. After comparing these figures, netizens exclaimed: "German beer offers good value for money." Furthermore, even in the imported beer segment, seeking cost-effectiveness is the "mainstream." More critically, imported beers are not just competing with each other on value for money to win consumers; they are competing with all beer brands, including domestic ones. At a chain supermarket in Shaoxing, Zhejiang, "New Consumption 101" noticed that domestic beers like Snow and Tsingtao were placed at the entrance, with promotional signs like "Crazy Discount" and "25% Off," and some brands offered 6 cans of 330ml for only 9.9 yuan. Meanwhile, beers imported from Germany, Belgium, Ukraine, and other countries were placed on less prominent shelves at higher prices. For example, among Ukrainian beers, which rank near the bottom in unit price, a 500ml can of Berisha wheat beer sold for 6.9 yuan. However, when alcohol consumption shows price rationality, combined with the current consumer environment, the appeal of imported beer to Chinese consumers inevitably diminishes. Not to mention original imported beer; even Chongqing Brewery, which owns international brands like Carlsberg, Tuborg, 1664, Grimbergen, Brooklyn, and Somersby, is under pressure. Data shows that since 2018, Chongqing Brewery's annual revenue growth rates have been 9.19%, 194.53%, 7.14%, 19.90%, and 7.01%. In 2023, revenue growth was 5.53%, a recent low. In fact, in its financial report, Chongqing Brewery also mentioned the impact of external macroeconomic factors and increasingly competitive beer market conditions. It can be said that in the current market and consumer environment, "even dragons must coil, even tigers must crouch," and being more pragmatic and meticulous is more effective. Need to Dig Deep into the "Special Price Band" While imported beer volumes have been declining year after year, China's beer exports have grown rapidly. Customs data shows that from January to December 2023, China's cumulative beer exports increased 29.5% year-on-year to 621,030 kiloliters, with the value increasing 45.7% to 3.18544 billion yuan. From January to May this year, China's cumulative beer exports increased 16.3% year-on-year to 266,540 kiloliters, with the value increasing 16.2% to 1.29748 billion yuan. It seems that domestic beer has risen strongly, but a quick comparison reveals the gap. In 2023, China exported 620,000 kiloliters of beer with a value of less than 3.2 billion yuan, while in the same period, it imported 418,000 kiloliters with a value exceeding 4 billion yuan. A netizen pointed out: "The huge difference in import and export values shows that China's exported beer is cheaper than imported beer." In fact, not only in exports, but also in the domestic market, lower-priced products have always been the absolute "mainstream." Remember, in 2020, high-end beer accounted for only 35% of the market share, while low-end beer still held a significant share. From the perspective of major brands, according to Caitong Securities Research, in 2023, the sales share of low-end products was: China Resources 78%, Tsingtao Brewery 60%, and Yanjing Beer 34%. Looking back, at the aforementioned Shaoxing supermarket, China Resources Snow and Tsingtao Beer were placed at the entrance with discounts, indicating that these brands are pushing low-end products. It is worth noting that a high share of low-end product sales or heavy discounting does not mean domestic beer has given up on high-end pursuits. On the contrary, every domestic brand is strengthening its investment and layout in the high-end market. For example, Tsingtao Brewery has launched Crystal Pure Draft and Premium Raw Draft in the ultra-high-end segment, clarifying its product strategy of 1 (Classic) + 1 (Pure Draft) + 1 (White Beer) + 2 (Premium Raw Draft, Crystal Pure Draft) + N (Ultra-High-End). Domestic beer is firmly grasping the low-end market while accelerating high-end products, meeting "mainstream" market demand while also "intercepting" some Chinese consumers who originally bought imported beer. In this situation, how should imported beer, characterized by high-end positioning, respond? At the "2024 China Beer T5 Summit," Li Zhigang, President of Carlsberg China, stated that premiumization is not just about raising prices or increasing the share of high-end products; upgrading products within each price band is also an important path to premiumization. "For example, by launching higher-quality products in the mainstream price band to attract consumers from the economy price band, that is premiumization." The so-called "mainstream price band" refers to the price band below 10 yuan, which can also be called the mass or economy price band, i.e., 5 yuan and below. Facing this price band, imported beer must both lower existing prices and "launch higher-quality products," which is challenging but worth exploring. At the same time, there is also a "special price band." According to media observations, the premiumization of beer is showing new trends, with products in the 8-12 yuan range, spanning the sub-premium and premium price bands, becoming the industry's target. In this "special price band," products like China Resources Snow superX, Tsingtao 1903, and Yanjing U8 hold certain market positions. Media citing some securities firms' analysis suggests that "the next round of beneficiaries may be products priced at 8-12 yuan." Obviously, imported beer can also dig deep into this "special price band." Moreover, in the long run, as the share of mid-to-high-end products in China's beer market increases, imported beer will benefit more. In other words, foreign beer will not be truly "abandoned" by Chinese consumers; it just needs to understand the situation and make precise efforts. After all, high growth is no longer there; it's time for refined operations. From August 20-22, 2024, the "2024 6th China FMCG Conference" with the theme "Crossing the Shrinking Era," along with the "3rd China FMCG Hard Discount Conference" and the "3rd China FMCG Distributor Conference," will be grandly held in Shanghai. At this conference, all roles in the FMCG industry chain will gather, allowing you to grasp industry trends at a glance, understand hot track directions, penetrate industry resources, and precisely connect with leading brand owners, top retail platforms, and national excellent distributors with over 100 million in sales, providing you with precise decision-making, efficient cooperation opportunities, and on-site learning of exclusive methodologies from FMCG giants! Keynote speeches, roundtable dialogues, report interpretations, closed-door salons, and networking dinners—this thousand-person event is sure to have something for you!