---
title: "How Long Can Domestic Craft Beer Stay Hot?"
description: "As work drains energy, young people turn to coffee in the morning and bars after work, seeking a pleasant buzz. Just as they've moved from instant to specialty coffee, they're now exploring craft beers for a better drinking experience. With unique flavors and higher prices, craft beer is gaining popularity, but how long will this trend last?"
author: "公开课白小哲"
publisher: "New Distribution"
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published: "2022-11-22"
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---

# How Long Can Domestic Craft Beer Stay Hot?

> As work drains energy, young people turn to coffee in the morning and bars after work, seeking a pleasant buzz. Just as they've moved from instant to specialty coffee, they're now exploring craft beers for a better drinking experience. With unique flavors and higher prices, craft beer is gaining popularity, but how long will this trend last?

Work makes people drowsy, so young people have a cup of coffee in the morning to wake up, and after work they slip into a bar to get slightly tipsy. Half-awake and half-drunk, they can regain some of the spirit that work has taken away. Just as more and more young people are abandoning instant coffee for specialty pour-over coffee, people are also starting to explore what kind of alcohol can make that tipsy feeling more delightful. Besides the ubiquitous "big green bottle" beer, colorful craft beers with novel flavors are quietly appearing on supermarket shelves and bar counters. Caramel, smoky, raspberry, creamy... anything can be made into craft beer, and these novel flavors drive up prices. What exactly is the difference between craft beer and regular beer? Why has craft beer become so popular? And how long can its popularity last?

**01**
**What is craft beer?** The English term is "craft beer," literally translated as "handmade beer," originating in the United States. According to the consensus of the American Brewers Association, craft beer must meet three conditions. First, it must be brewed using traditional handmade methods, not industrial brewing. Second, the enterprise scale must be small, with annual production no more than 6 million barrels, which is almost only one-tenth of industrial beer production. Finally, large enterprises cannot invest more than 25%, a rule mainly to protect the creativity of small businesses. Craft beer is currently quite popular in the U.S., with its market size exceeding $20 billion in 2021, accounting for 22% of total beer industry revenue. However, in its early days, craft beer struggled. In the 1960s, there were over 40 beer producers in the U.S., but they were all large factories that almost monopolized the beer market. Craft beer was a niche concept, making it very difficult to break through. In the first 20 years of development, craft beer made little progress, and almost all entrepreneurial ventures failed. It wasn't until the late 1990s, with improvements in living standards and evolving consumption concepts, that craft beer began to achieve breakthroughs. Entering the 21st century, public life and consumption concepts were refreshed again. Craft beer, full of personality, attracted a large number of beer enthusiasts who pursued quality of life and independent individuality. With deepening exchanges between countries, craft beer spread worldwide. At the end of 2007, China's first craft beer bar opened on Zhaozhou Road in Shanghai, named "Jack's Dimple." This 22-square-meter shop became a landmark for China's craft beer industry.

"Jack's Dimple"/Source: into app

At that time, China's craft beer welcomed its first wave of development. Nanjing Master Gao Beer is recognized as the first professional craft beer factory in the industry, followed by enterprises such as Chengdu Harvest and NBeer Pub, but they were only popular among niche circles with higher consumption levels.

Master Gao's Baby Fat series is very famous in China's craft beer industry/Source: Master Gao commercial

After 2015, more world-renowned craft beers entered China, and a large number of local craft beers were born, giving young people more choices in bars. Craft beer prices range from over ten yuan to over a hundred yuan, with the most common price in bars being 20-30 yuan. The most attractive aspect of craft beer is its "flavor" and "uniqueness." Without the strong irritation of alcohol or the heavy sweetness of soft drinks, craft beer achieves a subtle balance in taste through rich ingredients. It surpasses industrial beer, which has uniform processes and monotonous flavors, and its flavor varies greatly depending on brewing methods, techniques, and seasonings, meeting the needs of the public in different scenarios. On a hot summer afternoon, you can enjoy a refreshing malt beer with floral and fruity notes; on a snowy winter night, you can choose a rich dark beer with chocolate and milk flavors.

Just by looking at the name, you can't tell it's craft beer/Source: Xiaohongshu, with authorization

Craft beer has a huge space for originality, and outstanding original products are also a differentiating advantage to retain loyal consumers. Ingenious craft beers have thus attracted a large number of alcohol enthusiasts.

**02**
**Who drinks craft beer?** The rise of craft beer is actually a microcosm of the consumption upgrade in China's beer market. From 2011 to 2018, the sales share of low-end beer dropped from 89.1% to 76.5%, while the sales growth rate of high-end beer fluctuated between 20% and 35%. Craft beer, as a high-end beer focusing on taste and flavor, is favored by consumers. Data shows that from 2013 to 2020, the compound annual growth rate of craft beer consumption in China was as high as 35.38%. In contrast, the overall beer industry experienced negative growth for eight consecutive years starting in 2013, only recovering in 2021. Meanwhile, the annual number of newly registered craft beer-related enterprises in China also rose from 140 in 2016 to 1,378 in 2021. So, who exactly is drinking craft beer? According to relevant data, current craft beer consumption in China is mainly in first- and second-tier cities, with a clear trend of younger consumers, mostly post-90s and post-00s. In terms of gender, Tmall data shows that the ratio of male to female consumers buying craft beer online is 4:1, but female consumption is also growing year by year at a considerable rate. Besides pursuing diverse tastes, social needs are also an important factor in people's love for craft beer. Craft beer is more "high-end" than regular beer, yet its price is much friendlier than cocktails that cost dozens or even hundreds of yuan, making it suitable for various social occasions. "After work, chatting with three or five friends or colleagues at a bar, craft beer is the most suitable choice." Many craft beer bars have also started to recreate the butterbeer from Harry Potter. With its unique taste and friendly price, craft beer has thus become the "all-purpose drink" for young people's socializing. But despite craft beer's strong momentum, its current market share is only about 2%—compared to the 12.3% market share of craft beer in the U.S. in 2021, China's craft beer development prospects remain quite broad. The rapidly growing consumer demand and vast market prospects have attracted more and more players to enter the craft beer track. In addition to independent craft beer producers like Master Gao, traditional beer giants such as Tsingtao Beer and China Resources have also adjusted their product structures, launching higher-priced mid-to-high-end products like Snow Black Lion White Beer and Tsingtao Beer IPA.

Snow Black Lion White Beer/Source: Snow Beer official website

Even e-commerce retail enterprises and restaurant chains are participating in the competition for the craft beer market: Hema has launched the niche flavor "Gose Acid," and pale ale has become the main product of its own craft beer; Dingdong Maicai has launched its own craft beer "1972 Farm" for sale on its app; Starbucks, Haidilao, and other catering brands also want a piece of the pie, launching their own craft beer brands.

Starbucks' whiskey barrel-aged coffee/Source: Starbucks official website

Craft beer flavors are becoming more diverse, and its popularity only continues to grow.

So the question arises: will craft beer, developing so rapidly, "kill off" regular beer?

**03**
**Where is craft beer heading?**
"Once you enter craft beer, it's a deep sea; from then on, industrial beer is a passerby."

Although craft beer products are becoming more abundant and attracting many craft beer enthusiasts, in reality, craft beer is still far from being comparable to industrial beer.

Besides the significant difference in market share, the craft beer industry has also seen waves of internal turnover.

In the past five years, nearly 4,000 enterprises have rushed into the craft beer industry, but in just the last year, over 300 enterprises have successively collapsed. Since 2016, more than 1,000 craft beer bar-related enterprises have been deregistered, revoked, or closed. Industry insiders even say that the craft beer industry is actually very cruel, with over 80% of craft beer entrepreneurs losing money. In fact, one of the difficulties for craft beer is that some consumers don't have a deep understanding of it and "don't feel it." Compared to the deeply ingrained "big green bottle" industrial beer, craft beer faces a more niche market. After ten years of development, craft beer has absorbed huge investments from brands and has only just formed a preliminary awareness among consumers in first- and second-tier cities. But outside the main consumption areas of first- and second-tier cities, in third- and fourth-tier cities and below with lower penetration rates, even if the public knows about craft beer, they may be deterred by the price—industrial beer can be enjoyed for just a few yuan, but craft beer costs several times more.

Hema Fresh's own craft beer, priced at over 10 yuan per bottle/Source: Xiaohongshu, with authorization

In small cities, most beer-drinking occasions are at roadside barbecue stalls, where craft beer clearly has no advantage. One important reason craft beer can hold a stable share in European and American markets is that craft beer has become part of their dining culture. Under the pincer attack of various industrial beer brands, the challenge for craft beer in China remains how to get onto the daily dining tables of Chinese consumers.

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[5] Imported Beer Seizes Chinese Market https://baijiahao.baidu.com/s?id=1642369027804947826&wfr=spider&for=pc
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[7] Consumers Increasingly Favor, New Players Continuously Enter: Craft Beer "Freshly" Rises as a New Industry Trend https://baijiahao.baidu.com/s?id=1740667574308578161&wfr=spider&for=pc
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