Oktoberfest in China

Beijing Goes Bavarian

October 1, 2013 By Nick Yates

Published in the November issue of All About Beer Magazine

It was with the master of ceremonies’ final costume change that the revelers were at their most enraptured. Those gathered at Beijing’s Paulaner Bräuhaus—whether German veterans of Oktoberfest or Chinese new to the world’s biggest booze-up—had never seen anything quite like it.

The aging entertainer had donned a Dickensian nightgown and cap, lighting his way through the gloaming in the giant marquee with a candleholder in hand. He stomped along the banquet table through diners’ sausage and sauerkraut remains, belting out a raucous Bavarian drinking song backed by the oompah band. His hairy, stout calves were bared to the world, and Chinese ladies blushed at the occasional glimpse of his oversized bloomers.

With busty lederhosen-clad dancers on the stage barely challenging for anyone’s attention, our main act neared the end of his song. And then came the party trick. He opened his mouth wide enough to swallow a whole pork knuckle and in went the candle, extinguishing the flame. The crowd went wild, and the large sums most had paid to be at the opening of this venue’s 2010 Oktoberfest seemed more than worth it.

Similar scenes play out every fall at the Paulaner Bräuhaus in Beijing, where Oktoberfest is big business. But it is far from alone in selling the beer, food and drinking culture of Germany to the Chinese. While the capital’s outpost of Paulaner can be credited with starting the popularization of German brewpubs in mainland China after opening in 1992, a swath of such places has followed, in Beijing and most first- and second-tier cities.

Cultural Phenomenon

Premium-priced helles and weissbier have huge appeal in China. A one-liter stein sells for about 60 yuan (about 9.80 U.S. dollars) in most brauhauses in Beijing, which has China’s highest minimum hourly wage of 15.2 yuan. For the country’s growing number of nouveau riche, clinking and downing steins of this stuff with their guests holds just as significant a role as it would have for the hosts of a beer hall-set putsch in Germany. Look at me, most Chinese drinkers are saying, I have cosmopolitan tastes and money to indulge them, and inviting my tablemates to join me at this lavish party shows my respect for them‚ tremendously important in a country obsessed with establishing and maintaining “face.”

Fast-forward to the 2012 Paulaner Oktoberfest in Beijing, and this dynamic seemed to have been diluted, however. The launch night was noticeably less bombastic. There was the customary tapping of the festival’s first keg. The sponsors spoke a few words. Guests enjoyed their food and several beers brewed onsite. But it was hard to deny that the knees-up was muted compared with previous outings.

Not only was the financial crisis to blame, but the continued quietening of Beijing brauhauses since then also comes against the backdrop of a major campaign by the Chinese government against “extravagance.” The tit-for-tat banquets and gift giving that have greased the wheels of China for dynasties have come to be considered profligate. Yes, new President Xi Jinping is targeting exactly the kind of ostentatious Chinese souls, whether local officials or deal-clinching businessmen, who love German-style restaurants. With the campaign still dominating the front pages of Communist mouthpieces, it seems highly likely that 2013 Oktoberfest parties will be blown by these sociopolitical winds. While none of the big venues are set to cancel their fall events, they are sure to be slightly more restrained than usual.

There are also signs that German beer is losing its voguish popularity among Chinese, who are instead developing more of a taste for American imports. Importers and specialist bottle shops point to Chinese looking for something new. After a period when German and domestic beer was all that was available, punters are expanding their horizons to the more diverse styles offered by the New World. Germany may have superior prestige, but it faces challenges from new pretenders.

So how did we get to this stage? And what are brauhauses here doing to keep their place?

Tapping the Market

To answer those questions, we must first go back three and a half decades. Since China’s “opening-up and reform” pushed ajar the doors to capitalism and foreign cultural influences in 1978, enterprises from abroad have steadily filtered in, hungry for a slice of this massive market.

The Chinese aren’t exactly huge per-capita consumers of beer (the average Chinese drinks 32 liters of beer per year, 100 liters less than the average Czech, according to 2010 Kirin data), but consider the combined thirst of the country’s population of 1.2 billion and it will be obvious why China is a very attractive market for brewers with capacity to expand.

The Germans had something of a head start. In the early 1900s, German settlers began installing breweries in China and introducing the locals to a strange, exotic liquid called beer. Tsingtao, today one of the best-known Chinese brands in any sector, was founded by Germans about 375 miles down the coast from Beijing.

Sure enough, German-style lager became mainstream in China (as in much of the world). To a greater extent than the generic beer styles of any of the other brewing world superpowers, it was a good fit—refreshing in China’s hot, hot summers and not too challenging in its taste (see box, “Bitter-sweet: Brewing for Chinese palates”). English bitters, especially the super-hopped export IPAs, would never have appealed outside of expats.

Germans, then, were well set to dominate the modern era of pricey hotel bar-restaurants and toasting hosts.

Wolfgang Sesser, the Austrian brewmaster in charge at the Beijing Paulaner Bräuhaus, points to the importance of being first to market. “If there were other people here before us like Great Leap, maybe Chinese would be drinking more of that kind of beer,” he says, referring to the expanding Beijing-based U.S. microbrewer. “That could be one reason. The other is that breweries like Tsingtao are brewing beer in a similar way to us. Germans started this way of brewing, and the Chinese took it over. So they are used to this way of down-to-earth beer.”

In this context, Paulaner had the power to shape Chinese perceptions of what a brauhaus should involve, according to Sesser. “For example,” he explains, “if you brewed dark beer for an opening party and said, ‘This is the real German beer. Bavarian people drink this,’ the local people would follow you. We have seen more and more customers choosing dark beer over light here, but it’s especially the case where there have been no other German bars and hence no preconceptions and it’s pushed from the start.”

A Hoppy Marriage of Convenience

As to the practicalities of how these businesses operate, most are German-Chinese joint ventures—German brewing credentials and expertise allied with Chinese understanding of the challenging administrative conditions for businesses.

Paulaner has 18 brauhauses in China, with more on their way. They are all in Kempinski hotels, another German brand. Kempinski Beijing was the first such arrangement, with management “looking for an interesting gastro concept which would appeal to Chinese people,” as hotel PR executive Jina Zhai tells it. While a team of Chinese staff manages the day-to-day operations in the 550-seat venue, Paulaner provides its own brewmaster and assists with funding, marketing and strategy. Under the licensing conditions, the Munich parent company dictates that all the brewing kit is sourced from Germany, rather than using inferior Chinese models.

Another German brewery that has a plethora of brewpubs around China is Drei Kronen. It signed a contract for its flagship Beijing bar, Drei Kronen 1308, in December 2007. The family firm has a Chinese partner for every site, but German-trained brewmasters control the brewing.

Drei Kronen director Hans Gerner stresses the importance of experienced Germans overseeing the beer. While praising the theory with which graduates leave Chinese brewing schools, he says that practical know-how and diligence are often lacking. One horror story about local assistants left to their own devices involves their complete failure to sanitize some vessels. “Oh, it works without cleaning them!” they apparently replied when challenged.

The third significant brauhaus in Beijing is Villa Castanea. It opened in a scenic suburb in September 2010 as part of local authorities’ plans to develop the area of one-time farmland as a day-trip destination. The vast Fragrant Hills Park and the Summer Palace, once a warm-weather retreat for the imperial court, are both nearby.

Juan Chen, who owns Villa Castanea with her husband, studied in Germany and wound up working for an events agency near Frankfurt. The native of Xinjiang Province in the northwest corner of China came to Beijing with the support of the German Chamber of Commerce and successfully found a business partner there.

Juan named the brauhaus after the trees under which German brewers found shade for their barrels before the advent of refrigeration, and her own name is common for her Manchu ethnicity. But the Spanish-sounding monikers are not altogether misleading, for Villa Castanea’s grounds are styled broadly around European influences. Work has started on a second phase of the project, which will include a French fine-dining restaurant and a hotel.

Paulaner established the model that all brauhauses in China seem to follow, offering a large menu of hearty, traditional German food and three core beers—a lager, a “dark beer” and a weissbier. A look around any of them will tell you that it’s a popular format with Chinese and foreign visitors alike.

Adapting to the Times

Nevertheless, they’ve all been affected by the anti-extravagance campaign, to varying extents. While Gerner says business at Drei Kronen 1308 continues to increase by 20 percent a year, the company’s brauhauses in the cities of Changchun and Tianjin have “faded.” This could be because of a greater reliance in Changchun and Tianjin on big functions and government. Given the number of bureaucrats sacked this year over their excessive banqueting, others are understandably eschewing the ostentatious wining and dining that used to be so normal.

Villa Castanea has reduced its prices and simplified the menu in response to the campaign. “We change our menu once or twice a year, but this time we paid more attention to pricing, according to the political situation,” Juan explains. She says the venue still hosts a lot of government banquets, but they are now more discreet.

The restaurateur goes so far as to welcome the new conditions. “We like these politics,” she insists. “The old culture of meeting with a lot of [Chinese liqueur] and a lot of food was difficult for everybody, because you waste time and money. But it was impossible to avoid because it was part of the culture. Now, customers no longer say, as they used to, ‘It’s expensive, it must be good.’”

Looking around any Beijing restaurant, you will see President Xi Jinping certainly has a point in trying to combat a culture of wastefulness. Gerner observes of an average scene at Drei Kronen 1308: “You will notice groups of Chinese customers with tables full of food, plates they could never, ever eat. And none of them order small beers; they all have one-liter mugs. Usually, the Chinese drink very fast, so that means many of them are completely drunk within two hours!

“But the important thing is they have showed they can afford to pay. Our beer here is 58 yuan [about $9.50], not cheap. If you go to our competition, it’s even more expensive. But these locations are occupied every day,” Gerner says.

Brewing for the Future

The Chinese brauhauses will be at their busiest this year, as ever, during Oktoberfest. Rather than beginning in September like the real deal, the Beijing events are generally contained in October, timed both to avoid clashing with Chinese national holidays and to allow particularly devoted partygoers to celebrate both in Germany and China.

All those interviewed for this article seemed satisfied with Oktoberfest as their most powerful marketing tool, happy to accept the continued good trading even if the drinkers are pacing themselves a bit more, partying just a little less heartily. Gerner, however, believes that German brewing as an industry needs to market itself better if its products are to retain their allure in China.

So it falls to Oktoberfest to foster the perceptions of German beer to Chinese citizens. At the time of this writing, the Paulaner Brauhaus in Beijing was promising that 2013 would see the master of ceremonies from 2010 return after a hiatus of a few years. Extravagant or not, his antics are sure to get the party started.

Related: Brewing for Chinese Palates