China’s beer consumption is expected to recover in the second half of the year | Wilnesh News

China is the world’s largest beer producer and consumer. Driven by sports events, consumption is expected to recover in the second half of this year, with high-end products favored.

CGS International expects beer consumption to recover in the second half of this year, following a decline in beer consumption in the first half compared with 2023.

The ongoing sporting events such as Euro 2024, upcoming America’s Cup and Paris Olympics, coupled with hot weather, are expected to drive demand for the beverage.

CGS analysts Lei Yang and Feifei Sun emphasized in a report released last month that higher-than-expected sales of premium beer products in the catering and entertainment channels are expected to boost the industry.

Speaking of Euro 2024, Chinese online database Qichacha noted that bars and shops are decorated with Euro 2024 merchandise and are offering sports-themed meals to cash in on the craze.

A report from China’s online database QiChacha shows that “the beer market is showing an obvious growth trend, and major beer brands are competing to launch products and services that are consistent with consumption scenarios.”

“The European Cup ignited the ‘beer economy,'” the company said, adding that China’s beer industry has shown a clear trend of premiumization.

Sun and Lei said the trend in favor of high-end beers is expected to boost breweries’ profit margins, and lower barley prices will further drive down costs.

They cited data from Chinese customs agencies and their own research showing that the average price of imported barley from January to April fell 30% from the same period last year to US$273 per ton. “We expect this trend to continue throughout (2024),” they said.

They also predict that in addition to falling barley prices and packaging material prices, China’s beer industry will continue to benefit from product structure upgrades in 2024.

China is not the only country seeing this resurgence. In May, Reuters reported It was highlighted that global brewers will be selling more beer this year after several quarters of decline.

The report added that Heineken, the world’s second-largest brewer, reported its first quarterly sales growth in more than a year in the first quarter of 2024. Sales growth.

Carlsberg Chief Executive Jacob Aarup-Andersen reportedly said events such as the Paris Olympics and Euro 2024 will drive growth for the brewer.

“We do expect positive sales growth going forward,” Aarup-Andersen said, adding that the brand would particularly benefit from growth in sales in Asia.

Lei and Sun singled out two Chinese breweries: Tsingtao and China Resources Beer, Become the main beneficiary of the expected growth in consumption. They give the beer industry an “overweight” rating.

However, increasing price competition among breweries will put pressure on profit margins, the pair said.