Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
At brewery, cost-cutting was the priority
Around 50 layoffs were anticipated at the brewery as more local cuts were imposed by InBev. At one point last winter the company turned off the heat to reduce costs, relenting when the union complained.
Sources in the union said a contract good through 2014 prevents InBev from closure in all but the most extraordinary circumstance, like increased excise taxes.
An agreement in May with the Teamsters led to some 300 buyouts at all 12 U.S. breweries, including ours. AB InBev said employees "expressed an interest in this type of program" since it included a cash incentive. The company claimed "over staffing," even though the local brewery was down 200 workers from its peak years ago.
Also retiring was Dale Willetts, the last of the first-year hires when the Williamsburg brewery opened in 1971. He had his own take on the InBev takeover.
"I'm not sure this is going to be a good thing, short- or long-term," he said in a June interview. "We have lost a long heritage of American beer-making, and that's a shame. I know In-Bev still wants to make good beer, but with them the most important thing is the bottom line. Profits."
The vulnerability of the plant was reduced to a small number that loomed large. InBev produces beer at 151 breweries in 30 countries, of which James City's represents only 0.75% of capacity.
AB InBev rolled out a campaign to cut water use by 30% globally, but our brewery had already done so by 41%. The unstated question was: Is that enough?
The county was talking secretly about reducing water rates to appease the brewery, but Newport News Waterworks wasn't budging.
They also quietly mulled an idea to use the $50 million water contract with Newport News Waterworks to reprice water, selling it at a discount to the brewery.
Gov. McDonnell interceded on behalf of James City County by reaching out to AB InBev, but executives wouldn't take his phone calls.
Inexplicably but fortunately, Anheuser-Busch InBev came through for the local United Way, meeting its goals for corporate and employee giving.
From a publicity standpoint the year ended badly for AB?InBev. In early December Julie MacIntosh released "Dethroning the King," a book about InBev's hostile takeover. It painted a picture of a dysfunctional Busch family plagued by infighting and stubbornness. Then, just before Christmas, Adrienne Martin, the 27-year-old girlfriend of 46-year-old August Busch IV, was found dead in his St. Louis mansion. 911 tapes revealed that a call for help was made 40 minutes after she was found unrespensive.
After losing its contract with AB InBev, Toano glass factory Owens-Illinois bounced back with new a new agreement with arch competitor MillerCoors, including exclusive rights to a novelty bottle with interior rifling. By May, Owens-Illinois was back to 75% of operating capacity and planned a fourth production line in September.
It was at 100% capacity in the fall, having branched out into medicine and liquor bottles after assuming a closed Pennsylvania plant's business.
Owens-Illinois announced a $20 million investment, with the help of EDA grants, to diversify the plant and add 20 jobs.
26 Jan. 2011