In episode 7 of International Expansion Explained I discussed brewing craft beer around the world with Neil Playfoot, and we looked at some of the lessons that can be learnt for brands. Many of these points are equally valid for all food and beverage brands looking to expand abroad.

Beer & tea are the world’s two huge cultural drinks historically speaking so there are a number of differences across markets.

A bit about Neil

Neil Playfoot brewing consultant

Originally from the UK, Neil is a brewing consultant now based in Changsha, China. Starting out as an assistant brewer, fresh out of high school, cleaning tanks and working on the bottling line, Neil used his profession to brew and live around the world. He has worked in the likes of France, Bermuda, Portugal and Armenia.

Then people started to ask him for help with brewing projects. Realising his international experience was valuable to others, he set up the Asian Beer Network and now works on brewing projects from Sweden to Mexico.

Going International

Neil fell into brewing more because of a love of beer than any kind of calculated career move & just going with the flow led to him moving around the world.

This gave him insights into how people socialise as well as well as helping to learn about different cultures.

Why is China a great location for someone with insights about craft beer around the world?

Besides the fact that Neil has Chinese wife, China has a couple of big advantages for a brewer right now.

The craft scene is the fastest growing in the world – & when a segment grows in China that makes a huge total volume (around 650 million litres in 2020) even if the market share is still just a couple of percent.

Also, many international breweries buy equipment in China, so as a consultant, Neil is in a unique position to be able to help them set up connections and make their purchasing decisions.

The Beer Market in China

projected beer market growth in China

China is actually the world’s largest beer producer and in recent years the craft beer market has been growing at around 30% year on year, admittedly from a very low base. According to Statista, China’s middle class are increasingly ready to pay for a craft beer, and their preference is for wheat beer.

This may be because one of the largest general beer players in China (around 15% market share) is Tsingtao, based in Qingdao. This brewery was originally founded by the Germans and has a strong influence on Chinese taste.

Top beer trends in China

  1. Growth of craft beer
  2. Digitalisation of sales channels
  3. Rise of low or alcohol free beers

Beers for every season

Traditionally different beers have been brewed around the year with various characteristics. A few examples:

  • German Bock beer – this is a strong beer, rather heavy, that is brewed around religious festivals. It was often drunk due to it’s nutritional content in times of fasting
  • Oktoberfest Lagerbier – the German word for storage or warehouse is Lager, and these beers were traditionally brewed in Spring and stored until the autumn
  • French Biere de Mars – brewed in November for March/April drinking

Beer also varies considerably in the alcohol content around the world.

eg. China – Tsingtao is usually between 3-3.5%abv (alcohol by volume)
UK beers are usually 4-5%
In Russia, beer used to be 10%+ and anything with less alcohol content was seen as a foodstuff rather than an alcoholic drink. ๐Ÿ™„…B vitamins in liquid form
In Vietnam there are huge beer halls serving so call bia hanoi which is freshly brewed and fairly low alcohol. It doesn’t travel well.

Neil prefers something like a Gose beer in summer as it’s refreshing and the slight saltiness feels good (maybe feels like it’s replacing your electrolytes??).

Lesson

Different countries around the world, have different traditions around beer – this may have registration and classification consequences for you if you wish to export. The regulations in many countries are different at different levels of alcohol, and also the levels of customs or excise duty may be different.

How do consumers enjoy beer?

I don’t mean “how could anyone possibly enjoy beer?”, although that is pretty much my personal opinion on the taste ๐Ÿ˜ but when and on which occasions do consumers drink beer around the world?

Did you know that up until the 80s, many Belgian schools would serve a weak kind of beer to the pupils, called tafelbier. Some breweries even tried to persuade schools to reintroduce beer in 2001 as a healthier alternative to sugary soft drinks such as Coke.

In Bavaria, beer is often described as liquid bread and often used to even be served in factory canteens…

The UK has a fairly heavy drinking culture, where many people go out after work or at weekends with the main aim of consuming a lot of it.

Across much of the world, beer is served as an accompaniment to food or is consumed against the backdrop of meeting with friends.

In China, baijiu (literally white alcohol) is the main type of alcohol consumed. It is what lubricates networking and official banquets, where there are a great many toasts made between individuals which it can be rude to refuse. Sometimes a company will even appoint an “official drinker” for a banquet who is the one who has to sacrifice themselves and drink all the toasts…ganbei! ๐Ÿคข

Lesson

Think about how your target audience in a new market will actually consume or use your product. It may not be in the same way as in your home market.

international expansion explained - craft brewing around the world Eggenberger brewery Austria

Different tastes

As I mentioned at the beginning, beer is a drink which has been enjoyed for several thousand years and consequently it should be no surprise that craft beer around the world is brewed to reflect the variations in taste that exist.

We spoke about the Russian perception of “it’s only a beer if it’s really strong”, and this also has an impact on taste. Many breweries across the former Soviet republics have good export business selling their stronger brews into Russia.

In Armenia one beer became really popular at some time and now most breweries who came after them emulate the kind of taste that they have. It’s similar in the Philippines where many mainstream beers taste similar to San Miguel.

For Shanghai, Neil would brew a slightly sweeter beer than for consumers in Yunnan. Consumers in Shanghai also prefer their food a little sweeter, whereas Yunnan is more with herbs and spices – more strongly flavoured.

Taste might represent a memory

Sometimes products are bought because of the memory they represent, rather than because the consumer was fanatical about the taste itself per se. So for example the beer might represent the taste of home if you live abroad, or the memory of a holiday or studies abroad.

It might be the beer that you always drank with your university friends so the taste simply reminds you of those long evenings of parties or discussions.

Lesson

Consumers in different locations have different flavour profile preferences. That doesn’t mean that you have to localise the taste, but you should be aware of the differences and what that means for your marketing.

Craft Brewing around the world, but especially Asia, is growing

Generally across Asia, there is a rapidly growing number of microbreweries, even post pandemic. It’s not only craft beer around the world, imported and sold at extortionate prices, but also local brews.

Since the late 80s the craft movement has been growing. In Asia, things started with imported beers to satisfy demand amongst tourists and expats. From there, breweries run by expats such as Jing-A in Beijing sprang up (they are known for incorporating some special Chinese ingredients like Sichuan pepper). As time goes by locals are trained by the expats and go off to found their own breweries with individual characteristics. This leads to a huge diversity in the flourishing craft scene.

For example in Thailand a group of young people who had studied abroad, identified a gap in the market and developed a successful craft concept. Eventually this led to Thai laws around brewing and microbreweries to be relaxed in order to stimulate the growth as there is demand (which it’s better to cover domestically than with only imported products).

Like with any successful concept, the larger players are looking to buy out smaller successful craft brands and develop them further themselves. eg In China ABInBev bought Goose and is considering opening a chain of brew pubs. This kind of buy out results in economies of scale, which in turn has effects on the pricing.

Lesson

Think carefully about where your product should be positioned in a red ocean and how you can differentiate your offering – this needs to be reflected in your marketing messaging.

Packaging

Much of Asia, especially China, prefers bright modern packaging rather than the more traditional approach often favoured in Germany, Belgium or Austria. The products have to firstly stand out on shelves, but also appeal to consumers (& craft beer consumers tend to be younger in Asia than in Europe).

Sustainability

There are organic beers available, however due to the extremely high price of the ingredients this isn’t yet such as trend as in say wine.

Where there is a move in craft brewing around the world towards sustainability is in the process. Brewing beer uses a lot of water so any methods which can reduce that consumption are eagerly discussed and implemented.

International Expansion Explained: how could a small UK brewery go about exporting?

Obviously there’s no single correct answer for this as everyone’s circumstances are different and should be analysed prior to any expansion.

One solution which has worked well for the brand Gweilo is to search for suitable partner breweries in the country they wish to expand to. That partner brews then to the Gweilo recipes and takes care of the distribution and sales. It’s an interesting business model, which works well but obviously involves a high level of trust.

Points that you need to pay special attention to include the supply chain. Craft beer is usually not pasteurised so may need transporting in a temperature controlled container. Transporting liquids around the world is generally a fairly expensive affair as they are so heavy… You don’T want your product to arrive and not taste as it should because of a lack of care somewhere in the transportation or storage.

Whether you choose to go with a licensing or traditional export model quality control can be an issue. How can you ensure that the objective AND subjective (taste) quality are suitable for your brand?

As touched upon above, registration can be an issue – for China for example, all overseas food and beverage manufacturers have to be registered with GACC.

Of course, working with consultants such as Neil and myself is also a way of mitigating risk when embarking on such a project.

Neil’s Tips for anyone looking to start out on an international career in brewing

  1. Invest in yourself – get the official certifications (it’ll make it easier to get jobs & prove at an earlier stage in your career that you know what you’re talking about) and keep reading & furthering your education
  2. Actively network – you never know where your next job may come from
  3. Get a mentor

Full Video

You can view the full discussion with Neil here:

Reach out to Neil

If you are looking to set up your own microbrewery and need some advice about equipment, process or recipes, then reach out to see how Neil can support you. You can contact Neil here:

Reach out to me

Thinking that working with a consultant would accelerate your international expansion?

If you’d like to learn more about working with me for support on your internationalisation projects or personal export knowledge, you can book a 30 minute international clarity call here.

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4 Comments

  1. […] market in Southeast Asia for beer (& number 3 in Asia after China & Japan). This includes a boom in local craft breweries, although imported products are still at a low level due to high tax…Wine consumption is growing at 10%.With the implementation of the EVFTA import taxes will be slowly […]

  2. […] are they product specialists? eg. OTC pharmaceuticals, skin care, French foods, pet, alcohol… […]

  3. […] specifics of the transport & storage (eg do you need temperature controlled containers?) […]

  4. […] essential to grab buyers’ attention. That’s not always easy to do in countries with seemingly unending competition on the shelf. As the person responsible for sales in a market, it’s not so much your job to ensure that […]

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