What’s brewin’? An insight into Vietnam’s booming craft beer culture

Oliver Woods, founder of
Beer Asia and marketing strategist, is also a craft beer enthusiast. He lives and works in Ho Chi Minh City, Vietnam

BRIEF INTRODUCTION

Founder of Beer Asia, Oliver Woods is a New Zealander who moved to Southeast Asia in 2009 and has since called some of the region’s best watering holes including Singapore, Ho Chi Minh City and Kuala Lumpur, home. Born and raised in New Zealand, Oliver had the luxury of growing up during the advent of beer culture (30 to 40 years ago) in New Zealand which led to an explosion in micro-breweries (produce less than 15,000 barrels of beer per year) and nano-breweries (produce beer in batches of three barrels or less) which were geared more towards the community, town and neighbourhood.

In 2009, Oliver moved to Southeast Asia and found the beer selection and variety much smaller than what he was used to in New Zealand. Inspired by this scarcity back then, Oliver began to hone his knowledge in craft beer, attend conferences and webinars as well as brew his own beer at home. 8 years later, this led to the birth of Beer Asia in 2017, an online community and resource for beer lovers to find the best breweries and craft beers in Southeast Asia.

UNDERSTANDING CRAFT BEER

What is craft beer and what makes it so unique from the ordinary beer? 

This is a difficult question to answer, because it is a political question especially to those who take the subject extremely seriously! Luckily, I’ve got the US Brewers Association, which is pretty well-regarded brewing body in the United States and their definition is very simple and that is “a craft brewer is a small and independent brewer that brews 6 million barrels or less a year”. Now a barrel equals about 159 litres so basically a smaller production. Secondly, there’s also the part about ownership which entails less than 25% of the brewer being owned by a bigger alcohol company. This means even if I’m producing beer using traditional methods and in smaller batches but 50% owned by Budweiser for example, I’m not considered a craft brewer according to the US Brewers Association.

I would take a broader view here and say that craft brew is generally a smaller brewer focused on innovation and producing high quality beer. One thing I really feel is unique to craft beer is innovation and how they tend to look back to history and find inspiration from traditional local beers. Last but not least, I would say, craft beer really should be rooted in the community and not this faceless corporate conglomerate. It should be using local or imported high quality ingredients.

Is there anything unique about the process of craft beer? Is it different from the industrialised beer, like Heineken?

• Production volume: Basically macro-breweries (produce beer in more than 6 million barrels per year) since they operate on such large industrial scale, they tend to brew very large amounts as well as more lager styles such as Pilsners. Again this isn’t a universal comment as there are a lot of people in big beer companies making amazing beer and I’m not criticising them.

• Adjuncts: Ingredients that you add into the brewing process that don’t necessarily contribute to the core ingredients (water, malts, barley, yeast, hops). What big brewers do is they add things like rice thus changing the body of the beer and they do such things to minimise costs to save money, because again, they’re brewing at much larger scales as well. However when it comes to the production process between macro and micro breweries, it’s still fundamentally the same process irrespective of the brewing size

• Purity: Since craft brewers tend to brew smaller batches and focus on using good quality ingredients, they treat their beer as a symbol of beer craftsmanship and hence there’s typically a lot more care involved resulting in a more purist beer type.

• Experimental and innovative: Brewing in smaller batches also allows craft brewers to be more experimental and innovative with their products. For example, there’s a big trend right now of adding and what I’m referring to is the addition of ingredients such as oysters, pork, chicken and even donuts! This has given birth to a whole bag of jokes claiming beer is becoming increasingly like carbonated juice.

What is the origin of craft beer?

I'll give you two answers to this question. First, the popularised origin of craft beer which was the prohibition in the early part of the 20th century and this was apparent in many countries, not just the United States. For example, in New Zealand, all the bars had to close at 6pm and this led to all sorts of consequences including people not being able to drink into the night. In the United States, you could not brew beer over a certain percentage and what this did was destroy all the regional brewers and served as a big commercial exercise that meant only the big boys could survive. For decades afterwards, people drank the same beer and it became very homogenized. From this, people got frustrated and decided to start brewing beer from home and giving it to their friends and neighbours. So this is the most popularised and modern story however if you look back into history, people have been fermenting alcoholic beverages since time immemorial. In China, fermented beverages trace back to more than 3000 BC and they just found this industrial brewery in Egypt from the time as the Pharaohs.

Another notable origin story is Ninkasi, the goddess of alcohol from Suma and this is interesting because back in the day, women were the ones who traditionally brewed and made beer in their own homes but if you look at the craft beer industry today, it’s mostly dominated by men where in fact it used to be seen as a household domestic chore. There was even a poem by Ninkasi in Sumarian that teaches you how to brew and make beer. So yes, I think it's easy to look at craft beer and think of it as a relatively new concept but in fact it’s been around for a very long time.

However I would point out that the appreciation of what craft beer is alongside its flavours and the innovation behind it is a relatively new phenomenon. What I see now is consumers appreciating beer like they do with wine. Compared to the Sumerian times when beer was used as a hydration replacement for slaves as the water quality was so poor.

CRAFT BEER IN SOUTHEAST ASIA 

Can you give us a brief history into Southeast Asia’s craft beer scene?

People have been making traditional alcohol in the region for centuries and you see this in the likes of Vietnamese fermented rice wine and many other fermented beverages. However I would say that modern craft beer is a relatively new phenomenon that took off in the last couple of decades in the region and in Vietnam…. I would say the 90’s when waves of returning overseas Vietnamese returned and set up breweries with a more traditional European style. Another thing I would say is that it’s not just the breweries that have created the craft beer culture in the region but also the importers and beer distributors.

You see a lot of Vietnamese breweries here and do you see that because of the Vietnam’s history and its close affinity to Germany and the ex Soviet region that the beer profiles are similar?

Hoa Vien in District 1 doubles as the Czech consulate as well as a brew pub so they actually brew Czech-style Pilsners, which is very unique. To your point, I believe craft beer culture in Vietnam is largely influenced by returning Vietnamese from ex-Soviet Union countries and this has naturally resulted inthe consumer palate and taste buds of locals here leaning more towards beer styles such as German lagers and darker beers like Vàng beer.

So you mentioned that Vietnam was possibly one of the first countries in Southeast Asia to experience this advent of craft beer. Are there any countries in the region that’s leading the way in the craft beer scene and what are the reasons for this?

Let's start off by talking about the numbers. Cambodia is going bonkers in terms of how much they produce and a lot of that is export and just a fair amount of it is for domestic consumption. So Cambodia, I would say, is one of the quiet regional leaders in terms of craft beer production and one of the key drivers of this is the rise of contract brewing, where you use another person's facility to brew your beer and many regional craft beer brands have been contract brewing in Cambodia and importing it to their country for a myriad of reasons.

Another obvious one I would say from a cultural perspective is Indonesia, especially Bali, which saw an explosion in both consumption and production. The irony is Indonesia, being a predominantly Muslim country, has very complex rules around licensing and it varies by regency and province. However Bali, due to tourism and the foreigners and expats who reside there alongside comparatively more liberal regulation, experienced a boom in its craft beer industry. Overall, I feel the region is showing positive signs.

In Malaysia, as you mentioned you can’t brew domestically unless you have a license, which is practically impossible to get so basically you can’t brew. So now that we have clarified this - what is the craft beer scene in countries that are predominantly Muslim such as Malaysia and Indonesia?

So the roles in Malaysia and Indonesia are broadly similar. In Malaysia, there are 3 active brewing licenses that are being used: one by Heineken, one by Carlsberg and one by a third brewery which names evades me. They make legend beer that tends to be distributed in smaller towns in Southern Malaysia, etc. Malaysia has got extremely high alcohol taxes. In fact, the highest in the world if you look at proportion of tax to income. It is very expensive to brew alcohol which means most of the beer consumed in the country is imported, controlled and largely homogenised. Similar to the mentality during the prohibition, this lack of variety has evolved into a movement cum culture of avid beer lovers chasing new styles of beer, carrying unique beer brands from abroad as well as home brewing.

So you said they import only beer into Malaysia, how does that impact the culture or the consumption?

In Malaysia, it is expensive to drink beer hence it’s really reserved for the urban middle class. However, it is still very popular despite the high prices because I feel alcohol is generally expensive so the argument is “It's so expensive anyway so I might as well pay for something better.” Additionally, in both Indonesia and Malaysia, I feel the popularity of cocktail, mixology and bar culture has also inadvertently raised the profile of craft beers as mixologists want a more niche and premium product to not only match their bar menu but also appeal to a more discerning group of customers. As for Indonesia, I would say tourism played a big part especially in Bali.

CRAFT BEER INDUSTRY IN VIETNAM

When did craft beer become a thing in Vietnam and why?

There’s a lot of argument about who came first. I got here in 2016 and at the time you could find Pasteur Street, the Tap Room, Heart of Darkness and East West around that time so I would say these guys were the originals. At the same time, there were other players in construction mode including Fuzzy Logic.

What's interesting is that in the beginning there was a perception that Vietnamese people wouldn't drink craft beer and the belief at the time was that craft beer is too bitter, complex and different to what they’re used to. This is in comparison to household beer brands in Saigon that people grew up with like Beer Saigon and Beer 33 (they are very old brands, and Beer 33 is more than a hundred years old) and for the Vietnamese, the affinity for beer back then was deeply rooted in their culture. However I do see a change in the upper middle urban class today and this is evident in Beer Saigon’s recent marketing campaign which is a lot more crafty and including images of hops whereas it used to just be images of people gathering and ‘cheers-ing’. Additionally, Beer Saigon recently launched Beer Saigon Gold which symbolises the democratisation and mainstream-ification of craft beers and varied beer types in Vietnam. Furthermore, what I also notice is a lot more Vietnamese, not just foreigners, are drinking beer on a much more regular basis.

What do you think is fuelling the Vietnamese consumers to be a lot more aware about craft beer, you know, back in the day you said that they drank it because of heritage, tradition and identity? Who is educating the Vietnamese about craft beer?

I think beer is something that you have to learn by yourselves and while I passionately believe marketing plays a huge role but I think it’s also a shift in the consumer mindset where they’re open to learning about craft beer in the same way as wine where you might not enjoy it but you’d be open to being educated about it.

Secondly, I believe tourism has also helped the craft beer industry a lot. Originally before COVID, a lot of tourists would come from the States and be like ‘Oh, wow, I never know there is this kind of beer here and it’s great’ . A good example of this is Andrew Childs, the head of Behemoth Brewing Company, one of the most successful craft breweries in New Zealand. He came to visit Vietnam a few years ago and was so impressed by the local market and this international recognition and exposure fuels local Vietnamese interest and pride.

Last but not least, I would say Vietnam has got comparatively liberal immigration policies and what I mean is it’s easy to move here and set up a business. Prior to COVID, many talented brewers (overseas Vietnamese and foreigners) were coming over to set up breweries and I believe this infusion of foreign talent really helped grow the scale and quality within the beer industry here.

THE GROWTH OF CONTRACT BREWING IN VIETNAM

I recently read an article published in 2020 about Thai and Cambodian micro-brewers moving their production to Vietnam as a result of strict regulations imposed in their own countries. Can you share more about the impact of this phenomenon on the local craft beer industry in Vietnam?

Long story short, licenses everywhere in the world is complicated, right? The United States is a really complicated system involving sales, distribution production and in Thailand, well it’s no different and very expensive as well. Not to mention, there is usually a bout of corruption involved and even if you attain the license, there are many complexities.

Even at Asian brewers network conference, SEA Brew, which is a regional conference, you’ll notice that many brewers in Thailand are ex-military and experts in the regulation. So you ask yourself, "do I really want to up against these complicated restrictions around the production size, about what you can and cannot do as well as sales and distribution or do I just go elsewhere where there is no drama, produce and import it?” This brings me back to the my above-mentioned point about why Cambodia is currently leading in production volume within the region and it’s simply because of how convenient and liberal it is. If you brew in Cambodia or Vietnam, you can just ship it across but this can be more expensive if you fail to negotiate favourable terms for yourself but if you’re able to do this well, you' essentially cut out all the risks and all you need to do is import and distribute. It’s a model that people use very often.

Overall, as regulations around the world for brewing become more stringent and cumbersome and outsource contract brewing contracts to Vietnam, I believe it’s definitely a win-win situation for Vietnamese breweries to showcase their capabilities as brewers but also drive more revenue for their businesses. Some brewers also see this as an opportunity to access market potential for possible future expansion.

HEALTHIER TRENDS IN CRAFT BEERS

In the food and beverage industry, we’re currently seeing trends such as zero-sugar and healthier options, is this something we can or are already seeing in the craft beer industry?

You can already see Hoprizon, which is a Vietnamese non-alcoholic craft beer just launched into the market and what I’m seeing now is a lot more breweries moving into seltzers. In a way, it’s a great way to diversify their portfolio which is a great strategy considering today’s food and beverage climate where consumers are generally more aware of what they’re eating and drinking. I also see a big trend in zero sugar beverages around the world and a myriad of innovative beverages including hard seltzers beer but I think it’ll still take some time for these products to arrive in Southeast Asia. It’s almost like everyone’s looking at America and waiting to see “does it work?”

The advent of healthier options within the food and beverage industry has accelerated tremendously because of COVID and needless to say due to nationwide lockdowns, people are living very sedentary lifestyles. On the other hand, people are also increasingly stressed and indulging in guilty pleasure foods. Is this something you also see in the craft beer industry or are there any emerging trends that you’d like to highlight as a result of this Black Swan event?

At the beginning of COVID, predictions were very grim and I believe the Brewers Association even predicted that 30% of breweries were going to shut down because of the pandemic. There has been a lot of economic damage and relies heavily on restaurants and bars. For many craft brewers, you can say the damage was even more prominent seeing they have less emphasis on things like supermarkets, especially in Southeast Asia. So I would say as a result of COVID, many brewers are becoming a lot more aware of the need to diversify their sales channels. Simply, you can’t just sell to bars, restaurants and specialists anymore because then you become a lot more susceptible and vulnerable to COVID.

Needless to say during this time, we saw a lot of home drinking and delivery which sparked more packaged products, in this case cans and bottles direct to consumer. This is definitely also fuelled by the rise of e-commerce. Last but not least I would say COVID definitely posed many challenges and disruptions to supply chain operations due to a global shortage of shipping containers which has made things overall very difficult. For instance a brewery that I know and previously worked with could not get some ingredients nor did they know when the ingredients for a particular beer they were making were coming.

Nonetheless, I believe the craft beer industry has proven itself to be really resilient and it has come out super strong. Anecdotally, in Singapore and in Vietnam, I'm hearing in bars, people quietly telling me they've had some of their best months since COVID started. But the important takeaway from this is that people are drinking more at home so brewers need to change their mentality in order to reach more drinkers.

One of the things that you also highlighted was, craft beer is still very nascent. With the new normal and people shopping online a lot more, how is craft beer going to really be able to carry on that position and marketing while just being online?

My one perspective on this would be that, breweries need to start thinking more about beer less as a niche product and more as a product that anyone who can legally drink and should try. I am a big fan of Byron Sharp's work and his book ‘How Brands Grow’. Essentially, what he says is that to your customer, your brand and brewery is generally less different than competing breweries around you. So if you say,”Okay, my customers just like this dress like that”, perhaps it is true to a degree, but if you are selling beer, you are selling beer.

On the e-commerce front, I think a lot of breweries think “we can't do e-commerce because it's not for our category.” but I think that’s already been busted open category by category - what can you not find on online anymore? Imagine a 30 year old guy on the street who has only drunk Beer Saigon in his life. He is a potential customer, but you need to change how you market and sell to reach him. You cannot do what you have been doing in the past such as sampling and beer festivals to pull people in, you've got to do a big digital push. I would say that change of thinking is that is the most difficult part.

To grow this industry, we need people who are savvy and I believe back in the day it was perceived a tad like a beef boys club. Now, we need people who are able to identify this need to appeal to the mass and think “How do I motivate Jovel or inspire her to try and order online and get her into that habit?”. So if you don't solve that, then you won't survive the next 20, 30 years of the industry as it moves digital and DTC (direct to consumer).

I personally work with many brewers and they’re very conscious of this and I think they’re doing an amazing job in Vietnam around the region to expand their customer base and do cool stuff in the digital sphere.It's actually really positive and exciting. I'm super stoked to see how it's been changing.

PERSONAL QUESTIONS

What are some of your favourite craft beer brands in Vietnam? 

The beer that I get most excited when I see is “Bia hơi”, which is a fresh beer in Hanoi. It was quite difficult to find when I first came here but now I’ve been seeing them pop up a lot more in bars and restaurants the past couple of years. I wouldn't say it's necessarily the best beer in the world, but it's fun and social and there’s nothing like having that little metal container of beer, rallying up some friends around a table and eating some Vietnamese food or what they call it ‘NHAU’. Another beer that gets me really excited is Bookbinder, a New Zealand pale ale by Emersons. I have brought it to Vietnam and given it to people from different countries and they’ve all really enjoyed it. It's a delicious New Zealand craft beer. If you're in New Zealand, Emerson's book binder, check it out.

What advice would you give to someone looking to enter into the craft beer industry in Vietnam?

I'm a great believer in working with an existing established organisation and learning on the job. I think you can learn things in a university and that's great but for me, I think learning by doing is a much more powerful way to enter an industry like beer. So if you’re interested to get into the industry and passionate about it, get a frontline job in a brewery, whatever your skills deem fit be it accounting, sales or behind the bar and get your hands dirty. This also helps to build a long-term relationship and last but not least, get your Cicerone Qualification, it’s pretty good, costs only a hundred bucks and is online.

Ultimately, I believe it is not necessary to start your own brewery overnight and take it from someone who tried to do that when he was still relatively inexperienced in the beer industry. I definitely learned a lot and it was fun but also costed me a ton of money.

If like anybody wants to find out more information about beer and like Vietnam or what to do, get in touch, what should they like? Where should they go?

You can visit my website Beer Asia where I have my contact details including Facebook, Instagram and email. During the day, I focus a lot more on my consulting work and when I find the time, I write about the beer industry. Hopefully you can find something useful there!

Featured Articles

Follow me on Instagram