Hi Deane, thanks for taking the time to speak with us today. First tell us a bit about yourself and how you came to be in Shanghai?
It’s my pleasure to meet you. Shanghai is my home. I grew up here and have seen many changes over the years. I spent some time overseas for my higher education and have worked for large multinational companies internationally as well as in China for more than 25 years. It had always been my dream to open a business in my home city and bring my international experiences to China, in a small/medium size business environment.
You’ve worked for a number of multinationals including Coca-Cola, Fosters and Pepsi before taking the plunge to start your own company. Tell us about that journey.
I have been very fortunate in that I was able to be among the first group of pioneers who were able to take a scholarship to study internationally in the 1980’s. I received my MBA in International Marketing at Stern University New York. I was one of the very few pioneers of Coca-Cola in China when it began business back in the 1980’s. Since then I have held senior positions such as the Asia Director for Fosters before returning to China as a General Manager for Pepsi. One thing that this journey has taught me was that being one of the first to try something new is both rewarding and challenging. I was very lucky to have seen how the International beverage business had taken off during the late 1980’s to early 2000’s in China. I decided to use these experiences and when I saw an opportunity, I “took the plunge” at that point, again to bring something new to the market. My idea was that craft beer could be the next big opportunity for the market.
What made you decide to launch Tap House? Who and what inspired you to start?
Our company’s main business is importing, marketing and distributing beverage brands. Tap House is one our company’s business areas which helps to support getting new and interesting beers to consumers in the way that they are supposed to be, by being enjoyed as fresh as possible. As an importer, we started with craft beers in mid-2000’s and were the very first company to introduce American craft beers into China in a serious way. In order to promote our craft beers, we needed to provide the opportunity for Chinese consumers to experience craft beer. Tap House was born to showcase the breweries that we represent in the market: It is used as a brand building platform through promotions and most importantly for consumers’ product education. China is the largest beer producing country in the world but unfortunately in general Chinese consumers’ beer knowledge is not at the same level as North America or Europe, for example. Having said that, there is a small passionate craft beer community that has started to develop here and I believe China is the next potential huge market for craft beer. We believe Tap House could be a window for Chinese consumers to experience some world’s best beers that are now available in China.
With increasing interest in craft beer and so many bars competing in the sector, how do you differentiate Tap House from the others?
I am very happy to see more bars entering the craft beer sector. One of the reasons we set up Tap House was to demonstrate that it was possible to have a large variety of 18+ craft beers on tap and be attractive to consumers at the same time. We were happy to see some customers start liking a particular craft beer, which then became three and then ten craft beers as a result of Tap House. I don’t view the number of bars carrying craft beer as competition but as a massively positive step forward in general for the whole sector. Tap House and other bars are in the business of promoting craft beer in China market which I see as a very good sign for whole craft beer industry.
How do you decide on which beers to offer? Do you make adjustments to adapt to local tastes?
Chinese consumers are getting used to lager and wheat beers. Firstly, we are very cautious when it comes to selecting beers which will be more appealing to Chinese consumers’ tastes. Craft lager, wheat beers are our first choice. “IPA” is what many new consumers have come to categorize or view as craft beer. However we focus our attention on what consumers would like to drink. We do not simply just put the beers on the tap, we need to have a clear beer portfolio management which make business sense for Chinese consumers. Beer education and the launching and introduction of beer to consumers should be thoughtfully and meticulously planned out, step by step.
What are your future plans for the brand? I hear you’re planning to franchise?
We definitely will have more and more Tap Houses in China in the near future. In terms of franchising, I don’t think we are ready to explore this business model just yet, as we still need to fine-tune our Tap House operations before we roll out a franchise system. Flawless operations and execution are always the main challenge for every business.
Any advice for would-be beer entrepreneurs in Shanghai?
The craft beer business is not easy and it requires strong commitment. It could be a long and a quite painful journey before you see success. My advice is to have three things in abundance: passion, focus and patience.
What’s your favourite beer bar in Shanghai that’s not your own?
Beer Lady is one of my favorite venue as this is the first retailer which has such a big selection of craft bottle beers for consumers.