An Analysis of China's Hop Market
(Originally written for Bryant Christie Inc.) As U.S. hops producers look to expand exports, China shows significant promise as a potential new market for U.S.-produced hops. The country’s booming beer production, as well as a combination of a lack of availability of domestically-produced, high-quality hops and an increasing demand in beer, create an economic environment that will almost certainly require importation of foreign hops. While U.S. hops producers are in good standing to fill this demand, there are important yet surmountable market challenges facing them. Between the years 2000 and 2010, Chinese beer production growth rate hit 103%, with a 6.2% increase in beer production between 2009 and 2010. While economy-priced beers make up 85% of the market, premium beers are growing in popularity, and demand for beer is expected to continue to rise for at least the next two decades as the country’s middle class expands. Given the rising demand, the Chinese beer industry wil...