The imported and craft beer market in China - A project financed by the European Union - Flanders Investment ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Implementing Partners
The imported and craft beer
market in China
1
A project financed by the European Union
Today’s speaker
Contact Bio
• Director of Eibens Consulting
• Living and working in China since 2005
• Strong focus on food and beverage
import and distribution processes and
trade barriers
Pablo Recio Gracia • Previously worked for public agencies
including ICEX (Spanish Institute for
Foreign Trade) and Extenda (Trade
pablo.recio@eibens.com Promotion Agency of Andalusia) as
well as private companies
• Bachelor in Business from the
Pablo Recio Gracia University and Granada and Masters in
Quality Management and Business
www.eibens.com Internationalisation
2
Agenda
• The alcoholic drinks market • Retail channels
• Market segmentation • Case studies
• Regulatory environment • Opportunities and next steps
• Market size
• Geographical distribution
• Main players
• Consumer
3
The Alcoholic Drinks Market
The alcoholic drinks market
bl litres
250
Trends Other - World
Wine Spirit
Spirits - World
• The volume of the Chinese beer
market is stagnating 200
Wine - World
• China’s consumption per capita is
comparable to the world’s average 150
BEER – Other – 76.1
• This average and China’s enormous
Beer
population makes it the largest beer 100
market in the world BEER - Germany – 8.4
BEER - Russia – 8.6
BEER - Brazil – 12.0
• It is twice the size of the US beer
50
BEER - USA – 24.1
market in volume
BEER- China – 45.7
0
Alcoholic drinks market overview
Breakdown Alcohol Market China by Volume
70000
60000
50000
Million liters
40000
30000
20000
10000
0
2010 2011 2012 2013 2014 2015 2016 2017
Cider, Perry and Rice Wine Wine Spirits Beer Source: Statista, 2018
Breakdown Alcohol Market China by Revenue
300,000
250,000
200,000
Million USD
150,000
100,000
50,000
0
2010 2011 2012 2013 2014 2015 2016 2017
Cider, Perry and Rice Wine Wine Spirits Beer Source: Statista, 2018
6
Market Segmentation
Market segmentation
Instead of the commonly used Standard, Premium
and Super-Premium segmentation for beer markets,
we have used a different one that represents in a more
accurate way the Chinese market.
We have divided the market into 3 segments:
• Mass-consumed Chinese beer
• Leisure beer
• Craft beer and foreign brands on tap
8
Some example graphics
1 Mass-consumed Chinese beer
2 Leisure beer
3 Craft beer and foreign brands on tap
1 2 3
9
Market segmentation
Mass-consumed Chinese beer
• Chinese brands domestically brewed.
• Low-priced – Beginning at circa 1.0 Euro per liter* both in
foodservice and retail.
• 600 ml returnable bottles the most common format in foodservice. 330
ml and 500 ml cans in retail.
• Consumed by people across all income levels, everywhere in China
• Homogeneous pale lagers with low
alcohol percentage (around 3%)
• Largest brands: Snow, Tsingtao,
Yanjing and Harbin
• Mature market, decreasing 3%
annually for the last 3 years
• Consumed along with meals
*EU SME Centre research
10Market segmentation
Leisure beer
• Foreign brands, domestically and internationally brewed
• High-price – Price on average 12.6 Euro per litre* in bars
• Served in 330 ml bottles, or 500 ml if produced abroad (e.g.
Franziskaner)
• Consumed by urban and high-income consumers
• Consumed mostly in T1 and T2 cities
• All sorts of beer types
• Many brands competing in this segment
• Growing market. Largest part of the import total
that grew 38% in 2017 corresponds to this segment.
• Stand-alone consumption or with finger food, at home and bars
*EU SME Centre research
11Market segmentation
Craft and foreign beer on tap
• Domestically and internationally brewed
• Very high-prices – 13.8 Euro average per litre in bars*
• Typically served in 400-500 ml glass
• Consumed by urban, young, high-income consumers
• Mostly T1, then T2
• Many different beer types, though Ales prevail
• There are few options yet, more widely available beers are acquired
and distributed by AB InBev
• Market is growing exponentially
• Consumed either with Western-style meals or stand-alone.
*EU SME Centre research
12Market segmentation
Craft Craft
~0.1% ~0.4%
Leisure Leisure
~10%
Mass
~35%
Mass
~ 90%
~65%
Volume Value
13Market size
The beer market trends in
China
Beer production and import volume in China
52000 10%
8% 8%
184 8%
50000 338
49830
5% 64 49360 6%
111 4%
48000 48350 538
47790 4%
Million liters
47160
46000 646 2%
47
0%
0%
44900 45060
44000
-1% -1% -2%
42000 41
28 -4% -4%
-4%
41570 41620
40000 -6%
2008 2009 2010 2011 2012 2013 2014 2015 2016
Domestic Production Import volume Growth YOY Production
Source: National Bureau of Statistics of China, 2016. China Customs, 2018
15Imported beer
Beer import China volume and value
800 90%
84%
750.4 80%
700 716.2
76%
665.7 70%
646.4
600 67% 59%
61% 575.1 60%
500 538.3
50%
400
407 41% 40%
300 337.8
30%
200 231.5 20%
20%
183.7 16% 13%
100 10%
11%
0 0%
2013 2014 2015 2016 2017
Volume (x1000 hl) Value (millions USD) Growth Volume YOY Growth Value YOY
Source: China-customs, 2018Imported beer by country
TOTAL 2203
Imported Beer by country in Value (million USD) in 2017
0.0 50.0 100.0 150.0 200.0 250.0
Germany 209.5
Mexico 110.7
Belgium 69.7
Netherlands 65.9
Portugal 63.4
Spain 51.7
Korea, Rep. 49.8
France 40.7
United Kingdom 25.8
More than 70% of total import comes from Europe
Russia 12.8
United States 9.2
Others 41.2
Source: China Customs, 2018Beer imports. Average CIF
prices per country
TOTAL 2203
Source: China Customs, 2018Craft beer share
Craft share of total beer market
35 0.07%
30 0.06%
25 0.05%
20 0.04%
15 0.03%
10 0.02%
5 0.01%
0 0.00%
2007 2008 2009 2010 2011 2012 2013 2014 2015
Volume Craft share (%)
Source:Rabobank Canadean, 2016
19Number of Microbreweries in China
Craft is still small Microbreweries and Brewpubs
• Number of registerd Microbreweries
and Brewpubs is circa 80 in 2017 Registered Microbreweries and Brewpubs in
China
90
• These breweries combined have a 80
beer count of circa 750 70
60
Breweries
50
Jing-A Brewing Co. 40
30
20
Arrow Factory Brewing 10
0
2010 2011 2012 2013 2014 2015 2016 2017
Great Leap Brewing Co.
Registerd Microbreweries
Boxing Cat Brewery Source: Numbers retrieved from Ratebeer, 2018Geographical distribution
Geographical distribution
Geographical distribution of beer production in 2017 by quantity
Source: National Bureau of Statistics of China, 2016Geographical distribution
Geographical distribution of imports in 2017 by quantity
Source: China Customs, 2017 data, retrieved in 2018Geographical distribution
Geographical distribution of breweries by beer count
Source: Ratebeer, 2018Main players
Main players
Source: Euromonitor, 2015Main brands
Franziskaner Corona Hoegaarden Oranjeboom Tagus Estrella damm Cass Brewdog Kronenbourg Baltika KBC
Erdinger Leffe La Trappe Superbock Lost coast Brooklyn
Wurenbacher Chimay Rogue
Oettinger La Chouffe
Heineken Tiger Paulaner Budweiser Goose Island Stella Artois Asahi
Liefmans
Kronenbourg Carlsberg
Vedett
Duvel
Available on Tap
Duvel Moortgat AB-Inbev
Heineken International Carlsberg Group
Available in Bottle/CanConsumer
Chinese consumer - Foreign or
Local brands
• Consumer trends are fast changing and worth checking in a separate event
• For beer. The percentage that prefers an imported brand over a domestic
brand is in line with the share of Leisure and Craft beer
• Chinese preference for imported beer is concentrated but expanding
Preference local or foreign brands
Wine 24% 28% 22% 26%
Beer 8% 7% 35% 50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Prefer Foreign Brands Somewhat prefer foreign brands
Somewhat prefer local brands Prefer local brands
Source: Mckinsey China 2017 consumer reportRetail Channels
Retail channels
Convenience stores
They typically cater the mass-consumed and leisure
segment. This channel is getting more popular and
complements the changing working environment.
Beers are often more expensive than in other retail
channels and there is a larger proportion of canned
beer.
Traditional convenience stores
Offering only mass-consumed beer, most
commonly in 600 ml returnable bottles. Very low
price, circa 1 EUR/litre. This channel is quickly
disappearing in T1 cities.Retail channels
Supermarkets and Hypermarkets
They all have several options in the mass-consumed segment. Variety of
their imported beer portfolio depends on their size, prices are standardised.
Local Chinese Supermarket Wal-Mart BeijingRetail channels E-commerce There are several generalist platforms (JD.com, YHD or Tmall) and some vertical platforms (jiuxian, ichinabeer.com, among others) offering a huge selection of beer, both domestic (competing in price) and imported (competing in price and variety).
Retail channels Hotels Chinese hotels tend to have mass-consumed beer since they are served with meals in a Chinese-style restaurant, normally they have no bars. Foreign chains are usually five-star hotels with several restaurants and bars, with a selection of imported beer as good as any from a bar downtown. Restaurants Traditional Chinese restaurants will only serve mass- consumed Chinese beer in bottles of 600 ml. Western- style restaurants and bars have a wider selection, since they are not as food-centered as Chinese restaurants.
Retail channels Others (Bars, clubs, KTVs) They usually have domestic produced beer and some foreign brands, almost always in bottles. Those located in T1 city will display a wider offer of foreign brands, while those in smaller cities will limit their selection mostly to domestically brewed foreign brands (Budweiser, Carlsberg, Heineken…). Bars with wide selection of beer on tap and Microbreweries Growing exponentially in the last few years, especially in T1 but also in T2. Western-style food is a central part of the offer. There is little perceived difference between bars with a lot of beers on tap and microbreweries from the consumer’s point of view.
Case Studies
Case studies – Local Craft
Pictures
Panda brew came from a tiny room in
Beijing and now owns 8 fermenters, a
terrace and food accompanying the beers.
They are even exporting their beer to the
UK.Case Studies – import craft
Pictures
Brewdog the successful craft beer
international from the UK. Sold 20.000 hl in
China in 2017. Looking for opening a craft
beer brewery in China and see it as their
most important export marketCase Studies – Import leisure Corona is owned by Ab Inbev and brewed in Mexico, from there it is shipped all over the world. Making Mexico the largest beer exporter in the world. The Corona brand is really popular in China.
Opportunities and next steps
Opportunities for EU SME’s
Narrow product offering among local players
More sophisticated consumer, higher income
Leads to a gap between the needs of a growing consumer
base and the domestic production. This gap is filled by
imports and domestically brewed craft beer, that is limited
to draft consumption due to stringent requirements to
bottle beer in China.
Unlike in mature markets such as Europe or USA, the craft
segment is still in its early stages.
Opportunity for EU SMEs
41Next steps and key takeaways
• Beer market in China is targeted worldwide
Pictures
• Exporters normally do not make enough an effort to understand
and addapt. Avoid “first doing and then evaluating”
• Getting a first sale is easier than establishing long term
agreements
• New technologies complicated multi distributor strategy
• Simple but effective marketing can make a big difference
• On the ground support can also be very relevant
• Different options to find partners in ChinaEvents
• China Food and Drinks Fair 2018 (2019)
• March 22-24th
• Chengdu
• Largest food and beverage event
• http://www.cfdf.org/
• SIAL China 2018
• May 17-19th
• Shanghai
• http://www.sialchina.com/
• Craft Beer China Conference & Exhibition 2018 (CBCE 2018)
• Shanghai
• 15-18th of May
• Most important event for craft beer
• http://www.cbcechina.com/en/
• China brew and beverage 2018
• Oct 23-26Th
• Shanghai
• Focus on Wine, Spirits and Beer
• http://www.chinabrew-beverage.com/english/44 Get Ready for China www.eusmecentre.org.cn
You can also read
