China, known as the world’s largest producer and consumer of beer, is anticipated to witness a significant recovery in beer consumption during the second half of this year. This recovery is forecasted to be especially favorable for premium offerings. CGS International analysts foresee a rebound in beer consumption levels in the latter part of the year following an estimated decline in volumes during the first half compared to the previous year.
Several factors are expected to drive up the demand for beer in China. Sporting events like the ongoing Euro 2024, the upcoming Copa Americana, and the Paris Olympics are anticipated to play a significant role in boosting beer consumption. Additionally, the warmer weather conditions in the region are likely to contribute to the increased demand for this popular beverage.
According to analysts Lei Yang and Sun Feifei from CGS International, the sales of premium beer products in catering and entertainment channels are expected to experience growth. This trend towards higher-end offerings is projected to have a positive impact on the margins for breweries in China. Furthermore, cheaper barley prices are driving down costs, further benefiting beer manufacturers in the country.
The beer industry in China continues to show signs of growth and expansion. Data from Chinese online database QiChaCha indicates that the number of beer-related enterprises in China has increased by more than 7,000 in the previous year. With a clear trend towards high-end offerings, the beer market in China appears to be on an upward trajectory.
The recovery in beer consumption is not unique to China alone. Global brewers are also expected to benefit from increased sales this year after experiencing declines in previous quarters. Major players in the industry such as Heineken and Carlsberg have reported volume growth in recent periods, with expectations of positive growth going forward.
Analysts Lei and Sun have identified Tsingtao Brewery and China Resources Beer as major beneficiaries of the expected rise in beer consumption in China. These breweries have been given an “overweight” rating, indicating a positive outlook for their performance. However, it is important to note that intensified price competition among breweries may put pressure on margins in the sector.
The beer industry in China and globally is poised for a period of recovery and growth in the coming months. Factors such as sporting events, warmer weather conditions, and the trend towards premium offerings are expected to drive the increased demand for beer. While challenges such as price competition may pose risks to margins, the overall outlook for the industry remains positive.
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