What is the biggest bug of
In the past two or three years, due to the impact of the epidemic, employment and other factors, the popularity of topics such as consumption degradation and price sensitivity has been rising. However, in a slightly longer time frame, the trend of consumption upgrading cannot be ignored.
Beer is one of the industries with the most obvious upgrading characteristics. According to the data, from 2011 to 2018, the proportion of low-end beer sales decreased from 89.1% to 76.5%, while the growth rate of high-end beer sales fluctuated between 20% and 35%.
As the beer industry moves towards high-end, craft beer with its main flavor and taste is also favored by consumers. According to the estimation of guanyan.com, the compound annual growth rate of China’s craft beer consumption from 2013 to 2020 was as high as 35.38%, far higher than the overall beer industry (- 5.27%).
It seems that craft beer is developing rapidly under the promotion of consumers, but for brands and businesses, it is not easy to eat “cake”. If you are not careful, it will become “cannon fodder”.
According to media reports, from January 5, 2016 to January 5, 2022, among the 5385 enterprises related to craft beer, 1061 enterprises have been cancelled, revoked or closed. According to other data, in 2021, the annual opening rate of domestic craft terminals was 38%, and the annual closing rate reached 35%.
From these data, it is not difficult to find that craft beer brands are undergoing the tempering of “ice” and “fire”, and the fate of many brands may be “death after addiction”.
Quick birth and quick death
“The difference between craft beer and industrial beer is like hand rolling noodles and instant noodles.” This is the evaluation of Li Wei, founder of a craft beer brand.
In Li Wei’s view, craft beer is like “rolling noodles”, which satisfies consumers’ pursuit of classics and individuality. In essence, it is consumption upgrading.
This view can be recognized by a large number of craft beer fans. The experience of some consumers drinking craft beer is more different than that of “instant noodles” and “hand rolling noodles”.
For example, in 2008, Lin Lin drank a bottle of fine brewed beer produced by a Belgian monastery in a Shanghai pub. The media said that the moment it entered the throat, “it was like opening the door of the new world.”.
Consumers have different experiences, and the definition of craft beer is different.
For example, in the United States, the birthplace of modern craft beer, the brewers association has a strict definition of craft breweries, including that the annual output is not more than 6 million barrels, the brewery is not controlled by or less than 25% of the shares of non craft breweries, and there is at least one major product. In more than 50% of the sales volume, no auxiliary materials are used for brewing, or the auxiliary materials are used to increase the flavor rather than reduce the flavor.
There is no need to expand the production and shares. Just increasing the flavor will bring about various changes. This is what makes craft beer most attractive to consumers.
According to media reports, craft beer has a market share of less than 3% in China. It is appropriate for the media to describe it as “extremely low”. 97% of the beer in the market is industrial beer, and its dominant position is self-evident.
On the one hand, the market share is “extremely low”, and on the other hand, the giant monopolizes. If other craft beer brands want to live long and well, they have to do everything they can to be more powerful in this super internal competition.
First, of course, there must be capital support.
According to incomplete statistics, in 2021, the financing of the craft beer brand exceeded 1 billion yuan. Red shirt capital, angel Bay venture capital and Challenger venture capital are the three most frequent “gold owners”.
Even so, a rough calculation of an account shows that the total financing of more than 1 billion yuan a year is not much, and the investment in the construction of a factory is often more than 100 million yuan, not to mention the high cost of 20-30 million yuan of canned equipment and the construction of a channel network.
Second, to get limited investment, we need to make efforts in production and flavor.
In terms of output, the annual sales volume of some domestic craft beer brands with national potential is mostly below 50000 tons. Moreover, some of the sales volume comes from non private brand OEM, and the annual sales volume of more regional independent brands is unable to break the “barrier” of 1000 tons. It is impossible to expand the market. It may be more appropriate to say “generate power for love”.
Flavor is the focus of brands and merchants. In order to reflect the personality of their own beer, the brand strives to carry out differentiated competition in flavor, or adds honey, ginger, honeysuckle and even pepper, “or modulates the fruit flavor craft beer that women prefer.”.
In addition, after launching several craft beers with different flavors, we still need to face the “price war”.
A relatively strong phenomenon is that under the epidemic, the cost of raw materials such as malt and hops, which are highly dependent on foreign supply, soared, but the price of craft beer did not rise by a corresponding margin.
This is because the industry competition is fierce and consumers at all levels are beginning to be price sensitive. Unless there is a strong brand premium, it is difficult to get rid of the “price war”.
Only by overcoming the above obstacles in the competition can the craft beer brand truly stand firm and lay a solid foundation for its long-term development. From this perspective, it is easy to understand that the consumption demand of craft beer continues to grow, while many brands are rapidly growing and dying.
Competing in the existing “extremely low” market, brands and businesses are inevitably caught up in super internal competition. Under this background, it is quite urgent to attract more consumers and open up more market space.
In fact, many brands are trying to make breakthroughs, such as attracting female consumers with flavor, appearance and appropriate price.
According to the media, the background data of a domestic craft beer brand shows that not only male consumers, but also a large number of women who love drinking, “each accounting for half of the sales”.
However, in China, craft beer
2. Inner brewing: more than 5000 enterprises share less than 3% of the market, and Haidilao, honey snow ice city and Yuanqi forest are also included in the market, consumer report
3. In order to break the curse of the minority, craft beer began to “please” women, wired insight
4. “Nanjing Jianghu” of craft beer, Modern Express
5. Craft beer midfield battle: some people can’t support it, the forefront of entrepreneurship
Author: Xiangma; Source: new retail business review (ID: xinlingshou1001), reprinted with authorization.
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