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April 25, 2019

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Raising a glass to the rise of craft microbreweries

Nicky Zheng, manager at Daga Brewpub, prepares to host an unveiling of a new craft beer to be served at the pub on a Wednesday afternoon.

“We will have five new beers on tap,” said Zheng, in between giving other employees directions. “We change out our taps to introduce new beers every few days.”

Daga is just one of several pubs that has cropped up in the city to serve Shanghai’s growing appetite for more flavorful beers. Craft beer can be a tricky term to define. But it typically refers to small-scale brewing operations and is characterized by beer with more complex and richer flavors.

The beer flows freely in China. By sheer volume, China produces more beer than any country in the world and, according to the Deutche Bank estimates, accounts for one quarter of the world’s total beer consumption. The majority of this consumption consists of the big beer players with popular brands like Snow Beer, Tsingtao and Budweiser. But for years now, a growing segment of beer enthusiasts have turned to craft beers made by smaller microbreweries and cities like Shanghai are at the heart of this renaissance.

Over the last 10 years microbrewers, such as Master Gao based in Nanjing and Wild West Beers in Chengdu, have been popping up to serve suds for China’s young and growing, affluent middle-class. But a pint of craft beer comes at a cost. Most pubs serving craft beer in Shanghai average between 30 yuan (US$4.46) and 50 yuan a glass.

“The flavors are more rich and complex,” said Li Chen, a patron at the Liquid Laundry pub. “It’s nice to try something new and worth spending a little extra money.”

The big players in the beer world have taken notice too. AB InBev, producers of Budweiser and domestic beer brands like Snow and Tsingtao, is eager to get in on the trend. Ab InBev, in particular, has been actively promoting its own exotic brews such as Goose Island, a Chicago-based brand it acquired in 2011. InBev missed out on the craft revolution in the US a few years ago and does not want to miss out on the one in China.

Promoting unique brands such as Goose Island is central to InBev’s strategy to cash in on the “premiumization” of beer in big cities across China. Focusing on high-end beers, which appeal to those willing to spend extra cash, seems to be where both craft breweries are headed.

This has also led to InBev buying up local breweries in China in an attempt to capitalize on the market. The most famous of these acquisitions is Shanghai’s Boxing Cat Brewery, which InBev bought in 2017. Acquisitions and blanketing the market with its products has been the strategy for InBev but even local brewers are benefitting too.

“They [InBev] are building up demand for craft beer and it ultimately helps me too,” said Scott Hunt, co-founder of Wild West Beers. “When people see Goose Island they will also want to try other, better beers like mine.”

China has certainly become an experimental ground for new beers, in cities like Beijing, Shanghai and Chengdu. Craft breweries are popping up everywhere and adding local flair to the beverage. Breweries like Wild West Beers are adding Sichuan peppercorns to their beer, while others like Master Gao have experimented with tea-infused IPAs.

Many brewers see China as the next big market for craft beer and are excited to open up shop here. Others however, are more skeptical. Flex Wendlandt, owner of Brander Urstoff Brewery, started operations in China in 2016.

Brander Urstoff is excited to share their German beers in China. The brewers coming to China take their trade very seriously and are happy to find a home in China.

“We opened our brewery in Anhui Province because of the excellent water quality. Our product maintains high quality standards and we found Anhui to be the best place to make our beer,” said Wendlandt. “However, we see the market in China moving more toward fruit-flavored beers, known as a shandy.

“Your typical consumer in China, when given the choice between a classic IPA or a fruit-infused beer, will select the fruit beer nine times out of 10.”

Fruit-flavored beers are already popular on the island of Taiwan. In cities like Taipei it is common to see pineapple- or lychee-flavored beers.

Whether China’s appetite for American or European-style craft beers reaches the level of popularity it has in the US remains to be seen, but that has not stopped brewers from coming to China to give Chinese people a taste of their wares. Brewpubs like Daga are springing up all over the city, giving Chinese people the opportunity to try not only imported craft beer but local creations as well.

“We like to give local brewers the opportunity to share their products with local and domestic craft beers,” said Zheng of Daga. “We are a place for people to try new beers made in China and learn that there are many exciting possibilities with beer.”


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