Among the misconceptions about China is that the people don't like beer.
They do, said Mark Lyons, and increasingly they like Alltech's Kentucky Bourbon Barrel Ale.
"In terms of value, China will become the biggest beer market in just two years time," he said. "This is a beer story 5,000 years in the making."
Lyons, global vice president and head of greater China for Alltech, would know. Although he moved to China a few years ago to facilitate sales of the company's animal nutrition products in the booming Asian economy, he found that meals and drinking were such a big part of the business culture that his work effectively doubled — animal nutrition sales by day, craft beer by night.
"We started selling beer so that we had something to drink," Lyons said Tuesday at the Alltech symposium session on brewing and distilling. "There is nothing you do, there is no meeting you have that doesn't somehow come back to food. And what goes with food but drink. Drinking is very important to establish relationships. It's a critical thing."
So Lyons brought in Kentucky Bourbon Barrel Ale to make the crucial connection. As a consequence, he's learned to drink baijiu, a fiery traditional Chinese spirit, as customers often said to him, "You drink my baijiu and I drink your beer."
Compared to Americans, the Chinese don't drink as much beer per person, but China is the biggest beer market in the world by volume — drinking about one-fourth of all beer worldwide.
"Snow is actually the biggest beer brand in the world, and most of us have never ever heard of it," Lyons said of the Chinese mass-market brew.
Sales of wine and premium spirits in China have suffered in recent years from a government ban on conspicuous consumption, but beer, "the people's drink," Lyons said, has benefitted.
"Who's drinking all this beer? It's not everyone and it's not the whole country," he said. Young people, the eastern part of the country where the economic growth is occurring and cities with loads of "ex-pats," or foreigners, are big craft beer markets, but even smaller cities are seeing an increase in availability, he said.
Imports are popular, but not all of them: Belgian and Australian brands have done well while Germans have not, he said, due to different pricing and branding strategies. Germans went for volume rather than high-end pricing, and Chinese consumers don't want to buy cheap.
Younger Chinese in particular like craft beer.
"They want the story, the authenticity," Lyons said.
Brooklyn, Rogue and many other craft beer brands have made big leaps into the market, with exports climbing to almost $10 million last year, Lyons said.
Nicholasville-based Alltech has capitalized on the Chinese appetite for whiskey and bourbon, particularly with women who don't like to drink cold beer because it's seen as unhealthy.
Lyons said bars often will make mixed drinks using both Alltech's Town Branch Bourbon or Rye and Kentucky ales.
Last year Alltech sold about $2 million of spirits and beer combined, he said, with spirits making up the larger share. But with his craft beer evangelism, that's shifting.
"It helps that we have the other stuff," he said of Alltech's animal nutrition products. Often farm industry groups will hold conferences to talk about feed, and Alltech's beer goes along for the ride.
"They'll have a big banquet and they serve our beer," Lyons said. "My goal is for our beer to be the beer of the agriculture industry in China."