Michael Sebastian
In July 2023, Qingdao, Shandong province, hosted a lively beer carnival amid a backdrop of optimism for China’s beer industry. As the world’s largest producer and consumer of beer, China anticipated a rebound in consumption, particularly in premium offerings, driven by major sporting events like Euro 2024, Copa Americana, and the upcoming Paris Olympics.
Analysts from CGS International noted a recovery in beer consumption following a dip earlier in the year, highlighting a shift towards higher-end products in catering and entertainment sectors.
QiChaCha, a Chinese database, underscored the influence of Euro 2024 on the beer market, noting increased sales of European Cup-themed merchandise and sports-related meals at bars and stores.
This trend towards premiumization in the beer sector was expected to improve profit margins for breweries, aided further by reduced barley prices, which had dropped by 30% year-on-year in early 2024.
Beyond China, global brewers also anticipated a resurgence in beer sales after a period of decline. Heineken reported its first quarterly volume growth in over a year, while Carlsberg noted increased volumes after several quarters of contraction. Both companies cited optimism surrounding upcoming global sporting events as a driver for increased consumption, particularly in Asia.
In China specifically, analysts Lei Yang and Sun Feifei identified Tsingtao Brewery and China Resources Beer as poised to benefit significantly from the anticipated consumption uptick, giving the sector an “overweight” rating despite concerns about intensified price competition squeezing profit margins.
Looking ahead, they projected continued growth supported by ongoing product mix upgrades and favorable pricing trends in raw materials for the remainder of 2024.
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