Shifting craft beer market frontiers: opportunities in emerging Asia and Africa

Despite rising debt risks and uncertain recovery paths in craft beer, emerging economies will remain the principal drivers of global economic growth in the long term. This continues to present strong growth opportunities for companies and brands looking to expand their customer base in less saturated markets.

Given its sheer size and positive economic outlook, Asia Pacific remains the most attractive market for craft beer businesses. For example, in a bid for global domination of the world’s streaming markets, Rogue and Stone breweries from the USA are increasingly tapping into emerging Asian markets such as Indonesia and the Philippines, driven by the region’s young demographic, digital savviness and burgeoning middle-class.

African economies and consumers will also play a bigger role in the global economy. The number of middle-class households in Nigeria, for instance, will double between 2020 and 2040, to reach 17.4 million by the end of the period. Global businesses in various sectors, from digital finance to education and healthcare, are increasingly targeting African consumers.

While global economic rebound is underway, the path of craft beer recovery remains uneven for countries across the globe, due to differences in infection control, vaccination speed and stimulus scale.

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The world’s two largest economies – China and the US – are expected to recover quickly in 2021, on the back of huge stimulus spending in the US and a strong manufacturing rebound in China. However, many smaller, more vulnerable economies are being left behind. The Brazilian economy, for example, is expected to see only a sluggish craft beer recovery in the coming years, as the country is still facing severe infection rates, while inflationary and debt risks are rising.

Even within nations, the speed of craft beer (on premise and off premise) recovery differs between generations and income groups. Women, young people, low-skilled workers and the poor are often hit harder by job and income losses. Income inequality has been rising as more people fall into the lower income segments.

As a result of the uneven recovery, the polarisation of consumption between countries, as well as between higher and lower income cohorts, may increase. Mid- and high-income groups will see their spending power bounce back in the short term, but spending by low-income cohorts could drop once stimulus measures expire. Businesses will need to carefully evaluate the income and spending dynamics of their targeted consumer groups in order to come up with appropriate pricing and value strategies for their products and services like craft beer.