China: Pricier beers gaining fans in China

Pricier beers are gaining fans in China, with consumers looking for options ranging from something more than basic brews to ultra-premium bottles, the Nikkei Asia reported on September 17.

China Resources Beer and Tsingtao Brewery, the country's No. 1 and 2 brewers, respectively, enjoyed robust sales of midrange to high-end products in the first six months of this year.

One of CR Beer's new offerings features a dramatic design and similarly notable price. The beer, which debuted in June, comes in a black bottle donning the name Qin Shi Huang -- the First Emperor of Qin -- in red.

The 315-milliliter bottle sells for about 14 yuan ($1.92), considerably higher than for similar size servings of Heineken, the namesake brand of the Dutch rival, and CR Beer's other midrange brands at 5 to 9 yuan. More affordable alternatives are sold for 3 yuan.

Consumers give a thumbs-up to the taste and product design of Qin Shi Huang.

"It has a clean taste with some bitter flavors," said a 30-year-old Dalian man. "The bottle has an upscale feel, so I think it's perfect to serve to business customers."

Tsingtao is even more bullish with Luxury Legend, which launched in 2022 and sells for 1,399 yuan - $192 - in a 1.5-liter bottle. It carries a 10.5% alcohol content, far exceeding the roughly 5% for typical beer.

The ultrahigh-end product is available at limited locations, such as a restaurant that Tsingtao runs in Qingdao -- the city where the brewer is based.

"It's very rich and has a strong taste of hops," said a 41-year-old who works in Shanghai. "It almost feels like it has spirits added."

CR Beer's total beer sales increased 4% in the January-June period, with midrange to high-end products growing 26%. Tsingtao also reported a strong first half with midrange and premium brands, which posted a 15% gain in sales, while core products rose 8%. Both companies logged record January-June revenue and net profits, driven by the higher-priced products.

China's beer market, the world's biggest, is shifting to quality from quantity. Midrange and high-end offerings accounted for 35-40% of beer sales in 2022, up more than 10 percentage points on the year, the China Alcoholic Drinks Association reports.

The Chinese market shrank 5% in volume terms between 2017 and 2022, but sales in value terms jumped 21% thanks to higher unit prices, according to research firm Euromonitor.

Signs of a slowdown are emerging. Beer output fell 3.4% on the year in July, the National Bureau of Statistics reports, likely hurt by a slump in pay for lower-income workers amid the country's economic woes and surging youth unemployment.

The growing popularity of premium varieties comes as sales sag for low-end brews.

"People want better livelihoods, and we're certain the beer market will keep shifting to high-end products," Executive Director Hou Xiaohai of CR Beer said while announcing earnings in August. But he noted that the company will also focus on the low end.

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