CHINA – China, the world’s largest producer and consumer of beer, is set to see a recovery in beer consumption in the second half of this year, particularly favoring premium offerings, driven by major sporting events.
According to a report by CGS International, beer consumption is expected to recover following an estimated decline in volumes during the first half of the year compared to 2023. The ongoing Euro 2024, the upcoming Copa Americana, and the Paris Olympics, along with hotter weather, are anticipated to boost demand for the beverage.
CGS analysts Lei Yang and Sun Feifei noted that higher-than-expected sales of premium beer products in the catering and entertainment sectors are expected to lift the industry. Highlighting the Euro 2024, the Chinese online database QiChaCha reported that bars and stores have been adorned with European Cup merchandise and are offering sports-themed meals to capitalize on the excitement.
“The beer market has shown a clear growth trend, with major beer brands launching products and services that align with scenario-based consumption,” according to a note by QiChaCha.
The database revealed that beer-related enterprises in China grew by more than 7,000 last year, emphasizing the trend toward high-end offerings in the industry.
This shift towards premium beer is expected to enhance margins for breweries, further supported by declining barley prices. Sun and Lei cited data from the China customs agency and their own research, indicating that the average imported barley price fell by 30percent year-on-year from January to April, reaching US$273 per ton. They expect this trend to continue throughout 2024.
The analysts also anticipate that China’s beer industry will benefit from a product mix upgrade, in addition to lower prices for barley and packaging materials in 2024.
A May Reuters report highlighted that global brewers are poised to sell more beer this year after several quarters of decline. Heineken, the second-largest brewer in the world, reported its first quarterly volume growth in over a year during the first quarter of 2024. Rival Carlsberg also reported higher volumes in the same period after several quarters of decline.
Carlsberg chief executive Jacob Aarup-Andersen mentioned that brewers will benefit from events such as the Paris Olympics and Euro 2024.
“We do expect positive volume growth going forward,” Aarup-Andersen said, adding that the brand will particularly benefit from rising sales in Asia.
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