China, the largest producer and consumer of beer globally, is anticipated to experience a resurgence in beer consumption in the second half of the year. This resurgence is expected to be driven by premium beer offerings, particularly in light of sporting events such as Euro 2024, Copa Americana, and the Paris Olympics. Analysts at CGS International foresee a rebound in beer consumption following a downturn in volumes during the first half of the year compared to 2023. The combination of major sporting events and warmer weather is likely to lead to an uptick in demand for beer, with a focus on premium products.
CGS analysts Lei Yang and Sun Feifei emphasized the growing sales of premium beer products in catering and entertainment channels as a key factor in enhancing the beer sector. With bars and stores notably featuring European Cup merchandise and sports-themed meals to capitalize on the sports fervor, there is a clear indication of the industry’s growth trend. Moreover, Chinese online database QiChaCha reported a significant increase in beer-related enterprises last year, highlighting the industry’s shift towards high-end offerings. This shift towards upscale beer products is expected to bolster profit margins for breweries, especially with the benefit of lower barley prices reducing production costs.
The positive trend in beer consumption is not limited to China alone. A recent Reuters report indicated that global brewers are poised to witness increased beer sales this year after facing declines in previous quarters. Heineken and Carlsberg, two prominent players in the global beer market, have already reported volume growth, with Heineken noting its first quarterly uptick in over a year. Carlsberg’s CEO, Jacob Aarup-Andersen, expressed optimism about the industry’s future growth, particularly with events like the Paris Olympics and Euro 2024 on the horizon. The rise in beer consumption is also expected to benefit from expanding sales in Asia, adding to the positive outlook for the sector.
In light of the projected increase in beer consumption, analysts Lei and Sun have identified Tsingtao Brewery and China Resources Beer as key players set to benefit from the rising demand. While the outlook for the beer industry appears promising, there are challenges ahead, including intensified price competition among breweries that could put pressure on profit margins. However, with a strategic focus on premium offerings and favorable market conditions, the beer sector in China and beyond is poised for growth and profitability in the coming months.