China, known as the world’s largest producer and consumer of beer, is projected to experience a surge in beer consumption in the latter part of 2024. CGS International foresees a rebound in beer consumption following a decline in volumes during the first half of the year. This resurgence is expected to be driven by various sporting events such as Euro 2024, Copa Americana, and the Paris Olympics, along with warmer weather conditions. Analysts Lei Yang and Sun Feifei predict that premium beer products will gain traction in the catering and entertainment sectors, contributing to the growth of the industry.
The beer market in China is witnessing a clear growth trend, with major brands striving to introduce new products and services tailored to meet the demands of scenario-based consumption. Chinese online database QiChaCha reported a significant increase in beer-related enterprises in China, indicating a shift towards high-end offerings. The ongoing Euro 2024 has sparked a surge in demand for beer, as bars and stores adorn themselves with European Cup merchandise and offer sports-themed meals to capitalize on the excitement surrounding the event.
The trend towards premium beer is expected to enhance profit margins for breweries, with the assistance of lower barley prices driving production costs down. Data from China’s customs agency revealed a 30% decrease in the average imported barley price from January to April. The analysts at CGS expect this trend to persist throughout the year, benefiting the beer industry. Additionally, an upgrade in product mix, coupled with reduced prices of packaging materials, is anticipated to contribute to the growth of China’s beer sector in 2024.
China is not the only country witnessing a beer consumption recovery. Reports suggest that global brewers are poised to sell more beer this year after experiencing consecutive quarters of decline. Heineken and Carlsberg, two major players in the industry, are already showing signs of volume growth. Carlsberg’s CEO, Jacob Aarup-Andersen, expressed optimism regarding a positive growth trajectory, especially with upcoming events like the Paris Olympics and Euro 2024. The Asian market, in particular, is expected to drive sales for these global breweries.
CGS analysts Lei and Sun have identified Tsingtao Brewery and China Resources Beer as key beneficiaries of the anticipated consumption surge in China. They have assigned an “overweight” rating to the beer sector, indicating a favorable outlook. However, the analysts caution that heightened price competition among breweries may exert pressure on profit margins in the industry.
The beer industry in China is poised for growth in the latter half of 2024, fueled by sporting events, changing consumer preferences, and a favorable economic outlook. With strategic market positioning and a focus on premium offerings, breweries in China can capitalize on this trend and drive the industry towards a prosperous future.
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