Brewers Tap China’s Thirst For Craft Beer [Video]

Small-scale brewers are tapping growing demand from cosmopolitan Chinese consumers for high-end beers, a trend which could also help global brewing giants finally unlock frothier profits in the world's largest beer market. Ryan Brooks reports.

Video Transcript:

China's the world's largest beer market - but a middle class with money is getting a little tired of the same old watery and cheap lager.

More and more are starting to reach higher up the shelf.

Craving craft beer or premium imports like Carlsberg.

As Reuters Adam Jourdan reports, that means a big strategic shift for beer makers at a time when sales have gone flat around the world.

Reuters correspondent Adam Jourdan said, "The issue is that even though people like to drink beer here, making profits from this area is very difficult. China makes up 25% percent, a quarter of all the world's volumes, but only 3 percents of the profits that you can actually squeeze out. And what this means is that a lot ofbrewers are looking for ways to try and push their prices up, the growth driver going forward is going to be these more premium beers, you know, whether that's craft or whether that's something like a Budweiser which is seen as a more expensive beer here."

Big names in beer are already responding. Beverage giant SABMiller getting rid of its shares in Chinese brand Snow Beer. It may be the world's best seller, but it also retails for only fifty cents a can. And craft brews are starting to pop up in trendy bars, banking on a new crop of drinkers willing to splash out on pricier pints.

"The craft beer movement in China is still pretty small, pretty nascent," Jourdan said. "But it's picking up fast because people are looking for you know a beer that can help them stand out, it's something that's a bit different, it's more unique. You are getting something that's got goji berries in it, that's made from pomello, you know, it's got a strange flavour, it's something that you can go, this is a unique beer that I am going to taste."

But the question remains whether these high-end hopefuls will be able to really tap China's potential: selling outside of hip bars in Shanghai and Beijing to the millions of drinkers beyond.