Image source @ Visual China
Text | Fast Knife Finance, author | Gawaine, Editor | Huang Xiaojun
Once into the craft brew deep like the sea, since then the beer is a passerby.
Even if you are not a fan of the craft beer circle, you have basically heard this joke. Indeed, in recent years, the wind of craft beer has not blown too much, in addition to the blossoming craft brewing stores, restaurants, bars, taverns and even dessert shops in the wine cabinet, the number of craft beer is far more than the usual Qingdao snowflakes.
For a time, it seemed that the best home for the big green sticks was only convenience stores and food stalls.
Since 2013, the growth rate of the entire domestic beer industry has been in a sideways stage, and within four years when the overall sales tend to decline, the domestic craft beer companies have grown from 17 to 293; by 2021, all individual workshops or enterprises related to craft beer have reached more than 5,000.
But such momentum does not represent a good ending. According to the relevant data provided by Aiqicha, since 2016, more than 1,000 related enterprises have been deregistered, revoked and suspended, and the brands that have fallen in the craft beer industry are rising year by year, of which 506 craft brewing companies have closed down in 2021 alone.
Although it is one of the six bottles of God's drink with coffee and tea, the craft brewing route of beer is more like a siege than the other two super categories with unlimited scenery.
01 Craft beer that was drunk on the capital outlet
Craft beer is an imported word, English craft beer, meaning craft beer, which was first popular among returnee consumers.
The Brewers Association of America defines craft beer as—
Non-industrial production: i.e. less than 6 million barrels (953,880 tons) per year. To give you a visual comparison, the annual output of Yanjing Beer is about several million tons.
Craft breweries have a higher voice: in terms of equity, non-craft brewers or corporate institutions cannot hold more than 25% of the shares.
The addition of excipients is more stringent: the vast majority of brewed wine beer flavor is only made of malt raw materials or fermentation processes, and other excipients that reduce costs cannot be added.
From the wine can be drunk to the wine is better, and then from the difference in degree and color to the various flavors and tastes, beer is also upgrading in consumption.
Abandoning grains and corn for cost pursuit, replacing them with better malt and yeast, using more complex fermentation processes and lengthening the fermentation time of beer in order to pursue a better drinking feeling are the highlights of craft beer that distinguish it from industrial beer with weak taste.
If the taste of drinking ordinary industrial beer is like eating canned fruit, then craft beer is more like holding a fruit tree in an orchard and nibbling directly.
And the fruit of this fruit tree not only sells well at a good price, but also the profit is much higher than that of canned fruit.
In the "Starbucks at night" Helens Bistro, which is drunk by young consumers who love to buy and drink one by one, its own craft brewing products contribute nearly 70% of the performance and nearly 80% of the gross profit.
Although Helens drinks are all low-priced routes, in the ordinary retail market, the price of craft beer is generally about 20 yuan a bottle, which is several times higher than traditional industrial beer.
And according to the relevant research reports of heavy beer, the gross profit margin of Chongqing Beer's low-priced beer is only 37.93%, and the gross profit margin of medium-priced beer is 46.57%, and the higher the positioning and price, the higher the gross profit margin.
The profits of craft beer are considerable, and the five major domestic beer companies will naturally not let go of this good fruit tree. Tsingtao Beer, Chongqing Beer, Yanjing Beer, Pearl River Beer and other liquor companies have invariably increased their craft brewing products, and launched the Qingdao IPA craft beer, Yanjing craft beer, Pearl River Snow Castle craft beer and other craft beer series.
Not only traditional liquor companies, but also Wang Laoji, who sells herbal tea, and Haidilao, a cross-border demon, also sit on the craft wine table.
Wang Laoji's "Beep Hi Beer" craft brew, launched in July last year, sold 16.28 million cans on the first day of sale, with a total retail sales of 147 million yuan. According to the Haidilao research report released by CITIC Construction Investment Securities, Haidilao, with its own beer brand Haidilao craft brewing, has an annual total sales volume of more than 432 million yuan, which is comparable to that of a small beer company. After all, the beer listed company Lanzhou Huanghe (000929. SZ) revenue in the same year was only 455 million yuan.
▲Haidilao's own craft beer
On the other hand, under rough statistics, 9 craft brewing brands have received ten rounds of financing of more than one billion yuan in the first three quarters of this year.
The scramble for capital and the rotation of various manufacturers have pushed craft beer into the air.
02 Craft beer trapped in the scene
In Europe and the United States, the craft brewing market can win 1/4 of the sales of the entire beer market with 15% of sales. But in China's beer market, the vast majority of consumer perception is almost limited to liquor and industrial beer, and the penetration rate of craft beer is only 2.4%.
Craft beer is hot, but it hasn't really come out of a way. The defeat and retreat of thousands of enterprises confirms that the track is hot at the same time, but also shows the pain points faced by the industry.
Although there is a good base of beer consumption groups in China, the consumer masses and consumption channels of craft beer are difficult to compete with traditional industrial beer.
The cliff-like decline in passenger flow brought by the ongoing epidemic to the catering industry is the main fuse for the failure of the first craft brewing companies.
The scene of beer product consumption is very strong, quite dependent on the offline channels of the shop, bars, night clubs and restaurants and other group gathering places to lose the flow of customers, craft beer consumption channels are equivalent to the waist cut.
According to the professional data given by Frost & Sullivan, the number of taverns in China reached 42,000 in 2019, but in 2020, the number of taverns was affected by the epidemic and fell to about 35,000. Taverns are an important offline beer consumption channel, and for the production of craft beer malt, yeast, hops and other raw materials, heavily rely on foreign imports. Under the influence of the epidemic, the raw material costs of domestic craft beer manufacturers have almost increased by more than 10% across the board.
The biggest problem facing the surviving craft brewing brands is brand recognition and sales channels.
The traditional beer sales channel has been controlled by the five major manufacturers, and more than 80% of the market share has been divided, and the craft beer that is mainly small and beautiful is difficult to be deep even if it is wine.
Craft beer is still a niche product in the end, and there is no well-known brand and lack of consumer recognition, and there is almost no benefit in traffic. Traditional distribution channels not only fail to reflect the advantages of craft brewing products, but also face the problem of price war with traditional beer.
Not only can tiny craft brewing companies not only fail to come up with funds to broaden new sales channels, but also do not have enough investment in market education to build brands and educate consumer cognition.
Although e-commerce provides a stable sales channel for craft beer, beer is the same as ready-to-drink products as tea, and the main channel must still rely on offline consumption scenarios. Craft beer without filtering and sterilization of the production process makes its shelf life short, production is small, these attributes also limit its out of the bar, catering and other channels.
According to CBCE 2020 survey statistics, nearly 70% of craft brewers account for more than 50% of sales in the food and beverage channel, and 73% of craft brewers account for less than 20% of sales in retail channels.
The move of other consumer goods online can lead to secondary growth, but beer leaving offline is equivalent to self-destruction, and the road that craft beer can take is narrower than other categories.
03 Sample reference for scene breaking circles
At present, there are two main formats of domestic craft beer.
One is the craft beer specialty store model of the former store and the back factory, that is, applying for a catering license to produce fresh beer in the store using 500 to 2000 liters of equipment for sale.
The second is "prepackaging for commissioned processing", that is, it circulates in the form of prepackaged products processed and produced by breweries with a production license (SC) in the form of retail and catering channels.
The distribution channels of these two mainstream formats are highly overlapping and the drawbacks have been revealed, and craft beer brands need to consider new scenarios to break through the bottleneck.
From the consumption scene of the tavern to the retail scene of supermarkets and community convenience stores, the occasional consumption habit of drinking usually only in the store has been transferred to the family table.
After all, compared with only 35,000 taverns, there are more than 6 million small supermarkets, convenience stores and other terminal retail stores in the country, which are an important channel for family beer consumption.
However, due to the high pricing of craft beer itself, it is impossible to sink like traditional beer in the matter of entering household consumption, and the household consumption market that can be covered is basically locked in first- and second-tier cities, that is, young consumers gather and have high consumption capacity.
For lower-tier cities, the potential share of the household consumer market is much less than that of the dinner and wine market. The previous generation of consumers are accustomed to drinking lager, and it is not an overnight thing to change into an expensive and bitter al, after all, the price does not come down, and it is difficult to open the sales channel no matter how delicious the wine is.
In terms of channel coverage in the household market, craft beer with higher pricing is difficult to adapt to the retail system of small supermarkets in lower-tier cities in the short term, and it needs to break the circle through another incision.
There is a thriving craft brewing brand that does community-based store retail business, which is worth analyzing. The brand's market goal is to be the "Starbucks of the craft beer industry", covering the family beer consumption market in the community with close-range terminal stores everywhere, mainly for C-end retail, radiating consumers within 2-3 kilometers, mainly taking away or distributing.
In terms of pricing, the price starts from 8 yuan / 500 ml, even in Beijing, Shanghai and other first-tier cities that must be raised because of rising costs, they are also controlled within 15 yuan / 500 ml, suitable for family consumption.
Compared with the pre-packaged products of the mainstream format, the characteristics of the community self-brewing stores are fresh enough. Beer is brewed directly in the shop, and the liquor is taken from the fermentation tank and placed on the table at home, which will not exceed the optimal drinking period of 4 hours of fresh beer.
Community stores can not only do the business of home drink craft brewing, but also cover the surrounding restaurants. In 2018, the brand opened a takeaway direct supply business, doing B-end craft brewing direct supply for catering scenes, using mini programs and public accounts as service platforms, and cooperating with supper snack bars and chain restaurants.
In addition to selling beer directly, the brand also provides free equipment and liquor to stores, which are split with higher-priced stores.
To this day, the brand's stores have joined 220, and in the small circle of a number of craft brewing brands, it has taken a steady pace.
Although the reshuffle of craft beer in the industry is intensifying, and more and more craft brewing companies are out, the reshuffle of the integration period does not represent the decline and extinguishing of the industry.
The day when craft beer is moved from the store table to the home table in large quantities is when craft beer really ushers in the market.