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.
Pacific Breweries – Ready, steady, go – the Bluetongue Brewery
Just 18 months have passed since the first bulldozers rolled over the 10-hectare site of the new Bluetongue Brewery.
All brands will be brewed in compliance with the brand owner specifications and filled using a multitude of packaging options to provide both customer and consumer flexibility. A key issue in the design phase was the modular format which allows future expansion of the plant to a final capacity of 1.5 million hl/a. This was definitely the right decision, bearing in mind that the total production of beer in Australia is 17 million hl/a, and in the more expensive premium segment this trend is growing steadily.
Just 18 months have passed since the first bulldozers rolled over the 10-hectare site of the new Bluetongue Brewery. Within this period a state-of-the-art turnkey plant has been erected with a high focus on quality and flexibility and a capability to brew 500,000 hectolitres annually.
The lauter tun brewhouse can produce 9 brews per day with a cold wort output of 300 hl. The packaging line has an output of 48,000 disposable bottles per hour. The principle followed by Pacific Beverages and Ziemann throughout the project was to only use the best suited technology, to strictly observe all environmental standards and to ensure process reliability.
Interview - Peter McLoughlin, CEO, Pacific Beverages and Michael Shirbin, Project Director.
What position does Pacific Beverages Bluetongue hold on the Australian beer market?
Together with Canada, Australia is one of the most profitable beer markets in the world. Whilst the total market is relatively flat, the premium beer segment is growing rapidly and presently comprises about 16 percent of beer consumed with a five year CAGR of about 10 percent. Recent trends have this growth accelerating to over 16 percent.
"Since our inception in 2006, we have grown from a start of about 3.6 percent share of the premium market to about 10 percent. In December 2007, we acquired Bluetongue Brewery and its Bluetongue brand which included a Premium Lager, Pilsener, a Light and Ginger infused variant all of which complemented our portfolio." Pacific Beverages continues to focus on delivering great tasting, high quality brands to delight our consumers. Australia is a competitive and challenging market. While it is attractive due to its economic stability and growth, it also has high barriers to entry which have ensured an element of 'status quo' for many years. Our goal is to challenge this status quo and we have taken the first few steps on that journey," said Peter McLoughlin, CEO, Pacific Beverages.
What was the idea behind the joint venture with the soft drink giant Coca Cola?
The rationale for the joint venture was simple. SABM had been looking for a way to enter the Australian beer market as part of its global expansion and CCA was keen to enhance its beverage portfolio and diversify into complimentary alcohol brands. SABM contributes its brewing and beer marketing expertise together with a range of premium brands and this combined with CCA's extensive sales and distribution network and local knowledge makes a compelling combination.
Which environmental standards does the new brewery have? Could this very efficient energy- and water saving engineering system be used for future SABMiller breweries?
Bluetongue Brewery has been designed with the environment in mind. Water is the primary raw material used to brew beer, but it is scarce and needs to be managed with the utmost care, so we are ensuring that it is channelled efficiently to avoid any wastage. We have invested around 10% of the total project cost in various elements to build our sustainability capability including a water recovery plant to provide process water. This plant will assist us in moving towards a brewing ratio of around 2.2 litres of water per litre of beer, amongst the best in the world and well below the global average of around 4.5. We are using sterile filtration and filling rather than tunnel pasteurisation for beer quality and this also helps significantly with reducing water usage. Where possible we are using plastic conveyors, which minimise the need for continuous water lubrication. Part of the water recovery process includes an anaerobic digester that generates methane which is utilised in a supplementary boiler and will offset our energy consumption by about 15 percent."
The new Bluetongue brewery is a multi brand brewery. What is the idea behind this strategy?
Innovation can be a game-changer in the beer industry, which was somewhat starved of new products up until 2008. Whilst the environment has changed significantly now and product innovation is prolific, Pacific Beverages have started building a track-record of product innovation. "We were the first to market a flavour-infused product (Miller Chill) and the first to produce a low-carb premium product, Peroni Leggera". We certainly think there are market opportunities if you are prepared to act and think differently".
What advantages does a twin-stream brewhouse have?
The Bluetongue Brewery is unique in its design because it has twin-stream breweries, which are of two different sizes - a large brewery and a small brewery under the one roof. These twin-stream brewhouses allow for flexibility in the brewing process through the smaller size of the brewing vessels. This allows the brewery to adapt to suit consumer demand meaning the brewery has the ability to be small enough to be niche and caring, but large enough to provide sufficient scale.
What was the decisive factor for building a new brewery and why did you decide to choose Warnervale as your location?
In February 2008, Pacific Beverages announced the construction of a new 120 million dollar brewery north of Sydney. The rationale for this development was understandable - to overcome the existing capacity constraint at the existing brewery in Newcastle, to reduce the complicated and long supply chain to provide fresher beer to the consumer, to provide the more brands in the popular draught format and to build a platform for future innovation and expansion. "About 40 percent of beer in Australia is consumed in what we call on-premise licensed outlets as opposed to off-premise outlets which service the take-home consumer. Of the beer consumed in on-premise, in excess of 50 percent is draught or tap beer. In addition, our experience has shown that beer brands are built on the on-premise environment and this is key for trial and adoption. To be a real player in this market you simply need to be able to offer a portfolio of brands in draught format," said Michael Shirbin, Project Director, Pacific Beverages.
Why did you decide to work together with Ziemann as a partner for building the brewery?
Traditionally SABMiller have had a long standing relationship with Ziemann and when the planning for the new brewery commenced, naturally, Ziemann were considered as a possible partner. During the tender process, Ziemann developed a strong sense of integrity and trust with the project team. The ultimate decision to proceed with Ziemann was based on two key factors: 1. Ziemann's willingness to adopt a "best of breed" approach in the packaging area 2. The competitiveness of the tender with regard to the overall engineering and last but not least an unbeatable the price. (Source: BrewingWorld - Ziemann)
31 Jan. 2011