(Yicai) June 11 -- China has been swept by a new craft beer boom driven by several popular new localized products, including beers flavored with tea, mushrooms, and chili peppers that strongly resonate with customers.

Fewer mainstream beers were available at a 7-Eleven store in Beijing, while the variety and quantity of craft brands have increased, Yicai found. Shelves previously stocked with Budweiser now have multiple new craft selections infused with tea ingredients.

On major Chinese e-commerce platforms, flavored craft beers have become a sensation, with tea-infused, chili-spiked, fruit-blended, and Sichuan pepper varieties rising in popularity. More than 570,000 units of one tea-infused craft beer have been sold on Douyin, the sister app of TikTok in China, while a viral mushroom-infused beer has also sold well.

The latest trend could mark the beginning of a new wave of premiumization in China’s beer industry, industry insiders told Yicai.

Demand for craft beer has rebounded since last year, especially as Chinese-style products break into the mainstream and draw attention to this niche segment, sources from several breweries said to Yicai. Despite an overall downturn in the industry, craft beer sales continue to grow, they pointed out.

Wang Wei, a Beijing-based beer distributor, told Yicai that two craft beers he supplies have seen sales rebound markedly since late last year after stagnation.

China’s craft beer market is in a growth dividend period, with the sales of leading brewery Urbrew jumping this year from the previous one, founder and President Li Qing said to Yicai.

China has 7,267 craft breweries, with 1,009 newly registered in the first five months of this year and 1,749 last year, according to data from corporate information site Qichacha. Investors include brewers, enthusiasts, distributors, restaurants, and tea makers, boosting the market penetration of craft beers.

Although many unconventional-flavored beers indeed do not meet traditional craft definitions, industry experts pointed out. Instead, the distinctiveness of these products aligning well with young consumers’ novelty-seeking and individualistic tendencies, they noted.

Young Chinese consumers broadly label non-traditional beers as craft, beer expert Fang Gang told Yicai. Driven by personalized and diversified demand, the market features various bizarre and unconventional products, Fang noted.

This phenomenon is reshaping the premiumization upgrade pathway in China’s beer industry, shifting from better quality and reasonable price to a model emphasizing quality improvement along with bigger product diversity, Fang pointed out.

Editor: Martin Kadiev