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.
Lion Brewery adds 70 employees while undergoing $15M expansion
The Lion Brewery, one of the oldest breweries in Pennsylvania, has undergone a $15 million expansion and now has a new can production line and an automated racking system, which cleans and fills half-kegs of beer.
Cliff Risell, president and CEO of the Lion Brewery, Brewmaster Leo Orlandini and Tom Farina, senior vice president of sales and marketing, recently led a tour of the new equipment at the 106-year-old brewery on North Pennsylvania Avenue. The state, Luzerne County and the City of Wilkes-Barre assisted with funding the $15 million expansion, Risell said.
The state-of-the-art racking system cleans and fills 40 to 60 half-kegs of beer an hour. The new line produces about 800 16-ounce cans a minute and about 1,100 12-ounce cans a minute and packages them.
"We felt there was a large opportunity to get into the can business," Risell said. "A lot of our customers were asking for cans. We also needed to upgrade our racking system."
Risell and a group of investors purchased the Lion Brewery in November 2007. Together, they have facilitated the brewery's growth without sacrificing any of its work force, which consists of about 175 people. They have focused on restoring the roar of Lionshead and Stegmaier beer brands. They also pack for a number of customers, including other beer brands and soda.
"We thought it was a great opportunity for this area of the country, Northeastern Pennsylvania, to expand and to run a business and obviously, make a decent business return," Risell said. "That was the worst of times when the economy went south, but we stuck it out and we weathered the storm for the last couple years and we made a strategic decision that we were going to invest in our business."
When Risell and investors purchased the Lion Brewery in 2007, it had two bottle lines. Since then, the investment in new equipment has grown business by about 20 percent, Risell said.
"We've added a significant number of large customers on a national basis. Our business has grown quite well," Risell said. "At the same time, we've been able to maintain our profitability and we've also added jobs."
The 70 to 75 jobs added thanks to the investments have included supervisors, managers, brewers, bottlers, mechanics, forklift operators and quality control staff.
"Since Cliff took over, it has been magnificent what they're doing," said union President Clarence Gallagher. "They're hiring people. Before, they were laying off people."
The Lion Brewery is the only remaining brewery in Luzerne County and the second largest in the state after Yuengling.
Farina has assisted in the growth by expanding territory where brewery sells its products to 17 states. In 2007, its brands were sold only in Pennsylvania and parts of New Jersey and New York. Working with Scranton-based distributor LT Verrastro President Pat Verrastro, Farina also has assisted in expanding the Lion Brewery's brands to more bars and restaurants throughout Northeastern Pennsylvania as well.
The Lion Brewery got into the craft brewing business about a year ago and decided to revamp its Stegmaier brand, keeping the traditional Gold Medal label that has been around since 1857.
"We're going to continue focusing on the craft side because the craft side of this industry is where it's at today," Farina said.
The Lion Brewery bought the Stegmaier name in 1974. About a year ago, Risell said he and other officials at the Lion Brewery decided "we're going to make Stegmaier work or we won't have Stegmaier."
"Since that time, with Leo's help and Tom's help, we have fixed that brand from a quality standpoint and a recipe standpoint," Risell said. "With Tom's selling and marketing, we have had tremendous growth."
Among the other growth at the Lion Brewery, its offices have moved to Laird Street in Wilkes-Barre.
"We continue to invest every year in our business," Risell said. "We're investing in our brewhouse to make us more efficient and capable. We buy new cleaning equipment every year, including trucks and forklifts. We're spending a significant amount of money every year to make our business better. Our business is growing. Our customers are demanding more and we're spending more."
7 Feb. 2011