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.
The Weekly Brew: Beer of all shapes and sizes
From the brewer's perspective, the bomber is great. It's a much more efficient package from a production standpoint-it requires fewer bottles, fewer caps, fewer labels, and fewer manpower to bottle when compared to six-packs. This correlates to less labor hours required to package the beer as well as lower unit packaging cost. Most 22oz beers come 12 bottles to a case, as opposed to four six-packs per case-because of this, the bomber format results in more units of product per case, theoretically enabling the brewer to reach more potential customers with their brew. Additionally, bombers (and all larger bottle formats) tend to have longer shelf lives and aging capability due to a higher ratio of beer-to-air inside the bottle, resulting in a lower oxidation rate.
The effect on the consumer is much different, however. For the average beer-drinker, their go-to six-pack may be between $8 and $10. While most bombers are priced under $10, many specialty brands and limited offerings can reach above $20. Some brewers, like local favorite Berkshire, offer their beers in the 22oz format at $3.99 for most styles. Sure, this may seem like a bargain in comparison to the $10 bottles it sits next to on the shelf, but if you break it down and compare it to your favorite $10 six-pack, even these $4 bombers correlate to a $13 six-pack price. If this rubs you the wrong way, don't even think about those 22 oz. bottles with a $10 or $15 price tag, converting to the equivalent of buying a $32 or $49 six-pack, respectively. I think it's safe to say that these production cost savings aren't always passed onto the customer.
While local brewer Berkshire and California brewer Lagunitas keep their 22 oz. prices around $4-6, the cost is still substantial for the buyer. These single bottles have a lower "try" cost (for those just wanting to sample the beer) in comparison to the six pack, but the unit cost is still substantially higher than most six-packs. Much of the mentality behind these special single bottlings is that they are meant to be shared and are brewed (and consumed) for special occasions. But, many breweries break this mind set by bottling all of their offerings in the 22oz format.
Ultimately, the craft beer industry will always have Sierra Nevada and Sam Adams, but the next tier of microbrewers emerging may lead into some different packaging options that will have a lasting effect on the market and the customer. Is the single bottle format the next wave of the future? It's definitely more profitable for the brewers, but the impending backlash from the customer may leave them questioning their packaging decisions. There will always be room for different packaging formats, but supporting your favorite six-pack now is more important now than ever. Cheers!
7 Feb. 2011