RichKat Craft Brewing, a Shenzhen-based beer brand, has opened two pubs in Hong Kong, a move that could benefit the company as the beverage is tipped to become one of the fastest-growing alcoholic drink segments in the city, according to one forecast.
The outlets are located on Pottinger Street in Central and on Hollywood Road in Sheung Wan, areas that are known to attract locals and expatriates after office hours. The outlets, which opened in July and early this month, currently only offer canned beer.
“The diverse market environment and customer base can provide us with cutting-edge feedback, which in turn drives us to develop products and brand strategies with a more international perspective,” a RichKat spokeswoman said.
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Consumers in Hong Kong have a deeper understanding of craft beer and are more attuned to quality, she added.
Hong Kong’s retail industry is witnessing an upheaval as some of the city’s mainstay concepts and brands have had to adjust their strategy, as residents increasingly cross the border to mainland China to shop and dine where the prices are lower and splurge on overseas travel.
Outback Steakhouse, an American restaurant chain serving Australian-style food that has been operating in the city since 1999, recently closed nine of its 19 branches, citing poor market conditions.
On the other hand, mainland brands have become more aggressive in their expansion in Hong Kong. New leases by mainland Chinese brands surged 215 per cent year on year in the first seven months of the year, according to JLL.
RichKat’s expansion can prove to be a winning move if Euromonitor International’s forecast proves accurate. The city’s beer drinking segment is tipped to grow by 15.7 per cent between 2023 and 2026 to 183 million litres, second only to the 18.5 per cent increase predicted for the wine segment, according to the market research provider. The sparkling wine and champagne category is tipped to grow by 12. 9 per cent and whiskey by 12 per cent.
On the mainland, beer consumption is seen growing 1.1 per cent to 43.3 billion litres in the same period, Euromonitor said.
“Craft beer continues to gain popularity in Hong Kong as local consumers increasingly seek more refined and varied flavours of beer,” said Clifton Chiu, senior analyst at Euromonitor.
Hong Kong’s global events, designed to attract tourists, are also “set to play a major role in supporting beer sales as the local bar and drinking scene is revitalised”, Chiu said.
RichKat, which was founded in 2017 and currently operates more than 150 outlets on the mainland, appears to be getting a favourable response from Hongkongers.
“The products are good when considering the cheaper price,” said Porter Li, a university student who has been frequenting the Sheung Wan outlet since its opening.
A can of beer is available for as low as HK$28 (US$3.6) during happy hours, according to a menu posted on the online restaurant guide OpenRice. A special deal for a 12-inch pizza and two drinks is also available for HK$99 before 8pm.
“RichKat is positioned as a brand for mass consumption and we strive to offer high-quality products at affordable prices,” the spokeswoman said. A decline in rental costs opened up an opportunity to enter the market, she added.
High-street rents in Hong Kong have fallen by about 30 per cent from a peak in 2019, according to CBRE. S&P Global Rating, meanwhile, expects retail landlords to sign new leases at up to 5 per cent lower than current ones.
“The retailing sector in Hong Kong is worse than expected,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis. Foreign brands that brave the market could be doing so as “a branding strategy” to showcase their products, she added.
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