Lynk Insights: Craft Beer Q&A

At the end of 2017, there were over 6,000 craft breweries recorded across America. From humble origins in the late 90’s, craft beer has taken over the U.S. beer industry and is still growing, although at an admittedly slower pace than prior years. A similar boom appears to be now happening across Hong Kong.
We sat down with Stella Lo, a Lynk craft beer Knowledge Partner, and Sales Director at Thirsty Brothers distributors, to discuss the current state of Hong Kong’s craft beer industry, and the challenges facing the industry as a whole.
What is the current state of the craft beer industry in Hong Kong?

“Right now craft beer is in a good place. Awareness is increasing, especially among the expat community who are more receptive to craft beer, having often come from cultures where it is already very popular. Local breweries are on the rise too, and largely achieving healthy growth.”

Is the industry as a whole growing?

“Compared to western craft beer industries, Asia is beginning to look more and more positive. In the U.S. for example, the industry is beginning to plateau after years of very successful growth. However, in Hong Kong, the industry is just beginning to achieve noticeable growth. In a way, Hong Kong is in a similar place that the U.S. was around 10 years ago.”

What is life like as a small craft brewery owner in Hong Kong?

“While the industry is on the rise, it is still rather difficult for smaller breweries to standout from the crowd. At the moment there are over 20 Hong Kong brands making the marketplace extremely crowded. On top of that, over the past year, there was increased financial competition. All this has lead to a super competitive market, which doesn’t lend itself to new, smaller craft breweries.”

What are the challenges for smaller craft breweries trying to grow?

“The good news is that number of consumers are on the rise. However, although there is a growing base of craft beer fans, supply is higher than the demand, resulting in a surplus. Combined with a growing industry dominated by bigger more notorious brands, and a saturated local market, it is becoming less, and less likely for new small craft breweries to make their mark.”

Are on premises establishments such as bars and restaurants helping the craft industry grow?

“A good variety of craft beers can be easily found in popular places such as The Globe, Roundhouse, and Second Draft. These locations are primarily on Hong Kong Island, but we are seeing more and more craft beer focused places in Kowloon and The New Territories. More and more places are willing to list craft beers on their menus, offering something a little more unique and different. However, educating and training staff on craft beer knowledge is necessary to maintain a high quality of service.”

With this predicted overall growth, are Hong Kong based breweries now starting to look to the China market for potential expansion?

“Hong Kong breweries have a good reputation in terms of quality compared to breweries in China, therefore craft beer fans in China already seek this higher standard. The market is also  larger compared to Hong Kong making the idea very financially attractive, however, there are potential issues with import tax.”

Is the growing involvement from big name breweries like AB Inbev helping or hindering the craft beer industry?

“Their increased involvement is certainly detrimental to the craft industry as a whole. Not only does it reduces healthy competition thanks to their large financial backing, but it also has a negative effect on the local creative spirit.”

Is the growing involvement of foreign craft beers like Brewdog from the UK, helping or hindering the craft beer industry?

“In contrast with above, this is actually helping the industry substantially. By establishing healthy competition, they really show local breweries that they can be successful too. They represent the benchmark for marketing and beverage quality. Not only that, but brands like Brewdog help the overall popularity of craft, by appealing to the nostalgia of expats.”

Beertopia is becoming more and more popular every year. Does this show a substantial boost in craft beer interest across Hong Kong?

“Beertopia originally started as a way to show the popularity of craft beer in Hong Kong. Now it attracts over 13,000 attendees and is even known as Asia’s biggest beer festival providing clear signals that interest in craft beer is of the rise.

However, as the festival has increased in popularity so has its level of commercialism. You have big companies like Carlsberg with huge stalls, and smaller less well known breweries choosing to not even go! I would love to see more craft beer festivals and events popping up in the future. This may help preserve and enhance the craft beer culture as a whole, giving smaller breweries a platform to show off their products to the thirsty masses.”

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