Last year, I constructed a blog predicting five things that would happen in Chinese craft beer in 2018. Some didn’t happen the way I wanted them to, and some happened in a far more spectacular and horrible way than I could’ve imagined. Nevertheless, the most important thing is that things happened in 2018, and because they happened, we have proof that the market of China craft beer continues to show signs of growth. So, let’s review! Then after this little refresher, we can pull other predictions out of thin air and see what happens in 2019…Shall we?
One. “More breweries will open in 2018 that are themed after demons and Satan and whatnot.” This didn’t happen to the degree that I had thought. However, this happened and wins the eye roll of the year award:
We definitely got more sexual innuendo than I thought. There were **even** more breweries named after cats and other animals of various social standings. We got some grunge, we got some metal. But I expected more. Oh well. Half a gold star.
Two. More and more impatient money will enter the market with “ground breaking strategies”. Jesus Fucking Christ did this ever happen. The amount of pitch decks and cold calls Great Leap has gotten from people that are going to (insert one of the following) – change the game, revolutionize the market, bring China out of the dark ages of beer, Make Baijiu Great Again (by adding it to beer), more plastic bag related war crimes, and shenanigans. Oooohh the shenanigans, etc., etc. We’ve seen craft beer mortuaries open up behind walls of firecrackers, quantum mechanics related draft dispensation claims, and too many beer rating apps that all have top tier users that no physical human being has ever seen standing on terra firma, yet whose position on this world is so advanced, so heavenly, that they don’t even need oxygen in order to exist. Botnets. I’m talking about botnets. It’s been a weird year. This was also a softball prediction, but whatever. I’m the Judge Dredd of this blog and I’m going to count this as a solid gold star for me.
(For those of you who read my blog carefully last year, you’ll remember I talked extensively about equipment manufacturers, how the equipment market for brewing technology is tightening up, and because of that contraction China craft will inadvertently suffer. Sadly, I was a bit too right on that point. Two weeks ago, international craft beer equipment manufacturer Diversified Metal Engineering – who has done multiple installs in China and was once our first choice for equipment in 2012 – was put into receivership for inability to repay loans to the Royal Bank of Canada to the tune of 16.5 million USD. This will further affect the landscape of Chinese craft beer equipment providers as one of the largest stainless steel equipment fabrication companies in the south of China, Ningbo Zhongru Machinery, was their joint venture partner and provided the fabrication of equipment to supply their sales and customer support from New Zealand to New Siberia and everywhere in between. This isn’t good news. People will lose their jobs and breweries might lose their funding all because a couple of people played fast and loose with the rules.
Three. “Anheuser Busch InBev will continue to do weird and shitty things.” Yeah. Have you been to the redesigned Boxing Cat location on Yongfu Lu in Shanghai or the new one in Beijing? Notice how, um, bright they are? Despite the three “Grand Openings” that Boxing Cat has done in Beijing and the interior design “overhauls” they have gone through, they seem to continue to drift away from what made them the specific animal to chase through 2016, instead trading it for sterility and blinding, “Come to Jesus, ye sinners!” lighting. Kaiba continues to be pushed into the market as China’s “craftest” craft beer craft brand.
Their crown jewel, Goose Island, broke invisible foot traffic records using seemingly invisible people as the former HoW (head of whatever) for ZX Ventures in China claimed at this year’s CBCE that the Shanghai Goose Island location saw 500,000 people walk through its door in its first year of opening, which is roughly 1,350 people a day. That’s also a number he made up. I’ve been in there three times, and I’ve counted approximately 60 people across all three visits. AB InBev’s ZX portfolio of Chinese brands has also done really well at beer competitions in which they happen to be an investor. (See Tracy Wang’s excellent upcoming piece on what beer competitions actually mean for a brand’s future for a full explainer on this.) Let’s just say my fear that ZX was put together and poised to scare us for years to come has come out the gate a bit like the Halloween franchise. First bit of action was a heart stopper. By the third act, we were in the Season of the Witch. It’s chaos. I love you, MJ/Lee/Kelly. Gold Star.
Four. “We’re going to have too many beer festivals.” Guess what? We had too many beer festivals. There was a craft beer fest in a parking garage with no heating a couple weeks ago. In Beijing. In December. This won’t stop (why won’t this stop?!?!). However, what we’ve also seen is more and more well organized, door ticketed session style beer fests. Jing A repeated their 8×8 fest with somehow even less bathrooms, albeit more heating, so that’s cool. Great Leap sold out our fourth alphabet soup beer fest in March, and then the Craft Beer Association of China came out the gate running with their first annual fest in Beijing this past November.
More festivals have been coupled together with already high foot traffic trade shows and industry fairs. We also saw the continuation of the “take a picture of our booth, but not of the crowd” outdoor beer fests in development zones out near the “planning committee’s third choice for the new site of the second terminal of the local air freight landing strip number 7,” also known as “the middle of nowhere” for short. I hope we’ll see less of these in 2019, but I know we won’t. They’ll haunt us in our dreams, as will there “festival recap” press release where they claim 5,000 people came through and everyone sold all their beer. It’s never true. It’s why there are immediately a litany of tap takeovers for the brands that attended the festival at all the bars and taprooms in the city where the festival was held. There’s always no one there and always too much beer left over. It’s madness and it needs to stop. Parking garages, come on. Gold star.
Five. “We’re about to be drowned in shit that oversized craft breweries from other countries can’t sell so they dump it here.” You ever heard of Black Market Brewing? I hadn’t until they became a “well-known brand now available in China”. The beer is fine, but to say it’s a legitimate brand is a bit of a stretch. The top five craft breweries in America still aren’t here. Do you want to know why? Because people drink that shit in the market it’s from. Craft beer is good money if you have an established channel and a good reputation. If you are over-extended like our friends at Stone? Well, then you are still dumping Punk in Drublic on unsuspecting drinkers for no reason other than your banker told you that you didn’t have a choice. We’re actively being duped into thinking that half of this stuff is famous. It’s irritating, and in some cases fraudulent. Gold star. Fuck Fat Mike.
I’m going to call that 4.5 out of 5. Not bad. Let’s see what we can foresee for 2019 in the next installment of the “Carl makes less friends every year because of these blogs” blog series!