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Beer - China - December 2017

“Lack of an official definition will not prevent craft beer from further proliferating in the market. Instead, this will allow market players – both small and large – to be creative crafting the product and marketing the concept.”

– Laurel Gu, Research Director, Food and Drink

This report looks at the following areas:

  • What's driving popularity of craft beer?
  • On-trade beer market needs infusion of new blood
  • Mass market brands can focus on young males

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Excluded
          • Definition
            • Figure 1: Definition of low/mid/high MHI groups, by city tier
        • Executive Summary

            • The market
              • Volume consumption will stay flat
                • Figure 2: Retail volume sales of beer in China, 2012-22
              • Value growth is robust
                • Figure 3: Retail value sales of beer in China, 2012-22
              • Wheat beer/white beer and craft beer sees potential
                • Figure 4: Penetration and acceptance rate of niche beer types, China, September 2017
              • Companies and brands
                • Market leaders adopting different growth strategies
                  • Figure 5: Company share of the retail value market, China, 2015-16
                • The battle field of high-end beer market becoming crowded
                  • Figure 6: Beer brand penetration, China, 2015 vs 2017
                • The consumer
                  • Drinking occasions expand
                    • Figure 7: Beer drinking occasion, China, 2014 and 2017
                  • Increasing brand loyalty suggests consumers moving towards maturity
                    • Figure 8: Beer drinking preference, by occasion, China, 2014 and 2017
                  • Key quality indicator: sensorial stimuli speaks louder than ingredients
                    • Figure 9: Factors defining beer quality, China, September 2017
                  • What we think
                  • Issues and Insights

                    • What’s driving popularity of craft beer?
                      • The facts
                        • The implications
                          • Figure 10: Factors defining beer quality (product level), China, by consumer segment, September 2017
                          • Figure 11: Examples of craft beer with sophisticated flavour descriptions, China, 2017
                        • On-trade beer market needs infusion of new blood
                          • The facts
                            • The implications
                              • Mass market brands can focus on young males
                                • The facts
                                  • The implications
                                    • Figure 12: Example of flavoured beer targeting young consumers, China, 2017
                                    • Figure 13: Beer with emotional expressions written on packaging, China, 2017
                                • The Market – What You Need to Know

                                  • A flat market, with retail growing ahead of on-trade
                                    • Premium beer with standard alcoholic content gaining momentum
                                    • Market Size and Forecast

                                      • Total volume will stay flat
                                        • Figure 14: Total (retail and on-trade) volume sales of beer in China, 2012-22
                                      • Retail market develops faster than on-trade
                                        • Figure 15: Retail volume sales of beer in China, 2012-22
                                        • Figure 16: On-trade (non-retail) volume sales of beer in China, 2012-22
                                      • Premiumisation drives retail value
                                        • Figure 17: Retail value sales of beer in China, 2012-22
                                    • Market Factors

                                      • Healthy drinking momentum: volume control and quality upgrade
                                        • Food service market expansion
                                          • Figure 18: Tsingtao Brewery’s marketing education about food pairing with beer, China, 2017
                                        • Exoticism vs. localisation
                                          • Figure 19: Imported beer volume and growth rate, China, 2013-17
                                        • Threats from adjacent categories
                                          • Figure 20: Typical beer shelf in a convenience store, China, 2017
                                      • Market Segmentation

                                        • ‘Light’ and ‘Strong’ meet half-way
                                          • Figure 21: Proportion of new beer product launches, by segment, China, 2012-17 (Nov)
                                          • Figure 22: Retail value sales of strong beer in China, 2012-22
                                          • Figure 23: Examples of new light beer product launches, China, 2017
                                          • Figure 24: Retail value sales of light beer in China, 2012-22
                                          • Figure 25: Examples of light flavoured and craft beer product launches, China and Global, 2016-17
                                        • Premiumisation of standard beer speeds up
                                          • Figure 26: Retail value sales of standard beer in China, 2012-22
                                      • Key Players – What You Need to Know

                                        • Competition intensifies
                                          • Premium cues revolve around brand heritage, styles and craftsmanship
                                            • Innovation trends
                                            • Market Share

                                              • Intensifying competition between the two market leaders
                                                • Figure 27: Company share of the retail value market, China, 2015-16
                                              • International players aim higher
                                                • Figure 28: Carlsberg’s Master’s Choice series of imported beer, China, 2017
                                              • Rise of microbreweries
                                                • Figure 29: Typical examples of local craft beer products, China, 2016-17
                                            • Competitive Strategies

                                              • Premium cues evolving
                                                • Capitalising upon brand heritage
                                                  • Figure 30: Examples of Carlsberg’s retro-style premium beer, China, 2017
                                                • Playing up exoticism
                                                  • Figure 31: Examples of white beer, China, 2015-17
                                                • Highlighting craftsmanship
                                                  • Figure 32: Examples of Tsingtao’s craft-style premium beer, China, 2017
                                                • Targeting specific hobby segments
                                                  • Connecting with sports lovers
                                                    • Figure 33: Carlsberg and Tsingtao’s products made for football fans, China, 2017
                                                  • Connecting with online gamers
                                                    • Figure 34: Harbin beer sponsored LGD-Gaming, China, 2017
                                                  • Beer made for active consumers with strong fitness consciousness
                                                    • Figure 35: Michlob Ultra superior light beer, China, 2017
                                                  • Extending into ciders
                                                    • Figure 36: Ciders launched by international beer companies, China, 2016-17
                                                    • Figure 37: Strongbow cider, China, 2017
                                                • Who’s Innovating?

                                                  • Product innovation trends
                                                    • Figure 38: Top ten new product claims, China, 2015-17 (Dec)
                                                  • Limited-edition beer closely associated with pop culture
                                                    • Figure 39: Limited-edition new beer products, China, 2016-17
                                                  • Seasonal products going creative
                                                    • Figure 40: Seasonal new beer products, China, 2016-17
                                                  • Scope to emphasise ‘whole wheat’
                                                    • Figure 41: new beer products with a “whole wheat” claim, China, 2016-17
                                                  • Flavours rise with craft beer
                                                    • Figure 42: Share of new beer product launches, flavoured vs unflavoured, Global, 2016 and 2017
                                                    • Figure 43: Top ten new beer product flavours, China, 2015-17 (Dec)
                                                    • Figure 44: Online retailers offering assorted packs of craft beer, China, 2017
                                                  • Global innovation highlights
                                                    • Cross-over alcohol flavours
                                                      • Figure 45: New beer products with cross-over alcohol flavours, Global, 2016-17
                                                    • Beer capsules moving from the home to small restaurants
                                                      • Figure 46: Heineken’s draft beer capsules, China and global, 2015-17
                                                  • The Consumer – What You Need to Know

                                                    • Consumption occasion expanding
                                                      • Becoming more selective of brands
                                                        • Quality defined by ‘mouth feel’
                                                          • Craft beer and white beer sees greatest future potential
                                                          • Penetration of Different Alcoholic Drinks

                                                            • Reduced consumption of alcoholic drinks overall has smaller impact on beer
                                                              • Figure 47: Penetration of different alcoholic drinks, by occasion, China, 2015 and 2017
                                                              • Figure 48: Beer penetration (in-home), by age and gender, China, 2015 and 2017
                                                              • Figure 49: Beer penetration (out of home), by age and gender, China, 2015 and 2017
                                                            • Consumers in the South don’t limit beer consumption at home
                                                              • Figure 50: Penetration of beer, by occasion, China, September 2017
                                                          • Brand Penetration

                                                            • Smaller brands losing fans
                                                              • Figure 51: Beer brand penetration, China, 2015 vs 2017
                                                              • Figure 52: Heineken’s TV commercial featuring actor Chang Chen, China, 2017
                                                            • International brands have managed to penetrate into lower-tier cities
                                                              • Figure 53: Beer brand penetration, by region, China, September 2017
                                                          • Drinking Occasion

                                                            • Food pairing help boost meal occasions
                                                              • Figure 54: Beer drinking occasion, China, 2014 and 2017
                                                            • Sophisticated consumers embracing beer on more occasions
                                                              • Figure 55: Beer drinking occasion, by income, China, 2017
                                                            • Different preference by occasion by region
                                                              • Figure 56: Beer drinking occasion, by region, China, September 2017
                                                          • Beer Drinking Preference

                                                            • Brand loyalty sees significant increase
                                                              • Figure 57: Beer drinking preference, by occasion, China, 2014 and 2017
                                                            • Age is an indicator in new brand and niche type choices out of home
                                                              • Figure 58: Beer drinking preference, by gender and age, China, September 2017
                                                              • Figure 59: Beer drinking preference, by gender and age, China, September 2017
                                                          • Quality Definition

                                                            • Mouth feel is largely defined by flavour
                                                              • Figure 60: Factors defining beer quality, China, September 2017
                                                            • Different focus on quality among tier one consumers
                                                              • Figure 61: Factors defining beer quality, by city, China, September 2017
                                                          • Interest in Niche Beer

                                                            • White beer and craft beer have potential to grow
                                                              • Figure 62: Penetration and acceptance rate of niche beer types, China, September 2017
                                                            • Low-alcohol, flavoured beer and cider appeals to females
                                                              • Figure 63: Penetration and acceptance rate of niche beer types, by gender, China, September 2017
                                                          • Meet the Mintropolitans

                                                            • Strong cross-category competition
                                                              • Figure 64: Penetration of different types of alcoholic drinks – out of home, by consumer segmentation, September 2017
                                                            • A preference for international brands
                                                              • Figure 65: Brand penetration, by consumer segmentation, September 2017
                                                            • Interest in exploring and sharing
                                                              • Figure 66: Purchasing and drinking habits (at home)*, by consumer segmentation, September 2017
                                                            • Flavour and brewing method are more important quality indicators
                                                              • Figure 67: Factors influencing quality perception, by consumer segmentation, September 2017
                                                            • High acceptance of stout and white beer
                                                              • Figure 68: Proportion of niche beer triers who claim to like the type, by consumer segmentation, September 2017
                                                          • Appendix – Market Size and Forecast

                                                              • Figure 69: Total (retail and on-trade) volume sales of beer in China, 2012-22
                                                              • Figure 70: Retail volume sales of beer in China, 2012-22
                                                              • Figure 71: Retail value sales of beer in China, 2012-22
                                                          • Appendix – Market Segmentation

                                                              • Figure 72: Retail volume sales of beer in China, by segment, 2012-22
                                                              • Figure 73: Retail value sales of beer in China, by segment, 2012-22
                                                          • Appendix – Import Data

                                                              • Figure 74: Total (retail and on-trade) imported beer volume in China (million litres), by country, 2015-16
                                                          • Appendix – Methodology and Abbreviations

                                                            • Methodology
                                                              • Fan chart forecast
                                                                • Abbreviations

                                                                Beer - China - December 2017

                                                                US $4,460.00 (Excl.Tax)