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 will increasingly need to import hops, as the country’s domestic production is both insufficient to meet the beer producers’ needs – with a 34% decrease in hops production between 2009 and 2010 as well as a lack of investment, research and breeding programs to expand it – and is of inferior quality to American and European hops.

This creates a promising environment for hops producers in the U.S. Producers looking to enter the Chinese market do face challenges, however, as Chinese brewers are generally unfamiliar with U.S. hops, its varieties and quality, and have traditionally worked with domestically-grown hops. The lack of familiarity could turn Chinese beer producers to some of the other competitors in the global export market, such as Germany or the Czech Republic. In order to combat this, U.S. producers should engage heavily in marketing activities to educate Chinese beer producers about U.S. products and how they might fill their growing demand. The Chinese beer market is largely controlled by four breweries – Snow, Tsingtao, AB-InBev and Yanjing – and inviting key decision-makers from these companies to experience U.S. hops and the beer produced from them for themselves would be an important step to educating and growing awareness of U.S. hops.

Hops demand in China is strong and U.S. hops producers are in an ideal situation to export their product there. The future of that market depends on strategic and well-executed marketing focused on creating awareness of the superior product available in the U.S.

Comments

Post a Comment

Popular posts from this blog

Alaska’s southeast Dungeness fishery healthy, despite domoic acid fears

Image
(Original link: https://www.undercurrentnews.com/2016/09/07/data-shows-alaskas-southeast-dungeness-fishery-went-as-expected-despite-west-coast-domoic-acid/) Recently-released data on southeast Alaska’s summer Dungeness crab fishery suggests that that market was not affected by the elevated domoic acid levels that devastated the US west coast Dungeness industry. Scientists began to notice extremely high levels of domoic acid, linked to an algae bloom along the US west coast, in late spring, and in June west coast states began to close many of their shellfish fisheries — some of the largest shellfish closures ever. California’s Dungeness crab fishery was the last to open up, which crushed the state's fishermen. On the other hand Alaska, which also produces Dungeness crab, managed to avoid severe damage to its Dungeness crap industry. According to Kelli Wood of the Alaska Department of Fish and Game, Alaska’s zone A fishing industry — which is a major source of the crab — was...
Read more

Aging workforce poses challenge to Alaska fishing’s future

Image
(Original link: https://www.undercurrentnews.com/2016/12/06/aging-workforce-poses-challenge-to-alaska-fishings-future/) An ongoing Alaska study slated to be published in mid-2017 will be one of the first to offer potential solutions to a problem known as the “graying of the fleet” — the shrinking proportion of young fishermen in the state. The increasing average age of Alaska's fishermen is seen as a growing issue according to researchers behind the project, called “Alaska’s Next Generation of Fishermen.” “As many Alaska permit holders approach retirement age, the decision of the next generation about fishing will impact coastal communities,” the group wrote on its website. In 2013, the average age of Alaska fishing permit holders was just under 50 years old, up a decade from the 1980 average. The number of Alaska residents under the age of 40 who hold permits has fallen from 38% in 1980 to 17% in 2013. The study, funded by the North Pacific Research Board and the grou...
Read more