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.
US. Peoria’s beer scene continues to transform
Jockisch, 64, has some perspective on the subject. "I grew up in this business," he said, recalling that his father, Richard Jockisch, started the company in 1941.
"I've seen a total transition. Beer is now more diversified. You've got regular beers, light beers, imports and craft beers," said Jockisch, who acknowledges that Budweiser, Miller and Coors are the biggest selling brands - both in central Illinois and across the country.
But, increasingly, beer drinkers are choosing brands with strange beers made in small batches with names like Magic Hat and Backwoods Bastard.
"Craft beer is now a huge player and growing steadily. So many different styles of craft beer are out there. There's a little bit of romance attached to that," he said.
While RJ Distributing handles mainstream brands like Coors and Pabst, the company also offers a number of craft beers, a small but increasingly important segment of the business, said Jockisch.
Craft beers made up just 4.3 percent of U.S. beer sales volume in 2009, according to the Boulder, Colo.-based Brewers Association. While the nation's overall beer sales volume was down 2.7 percent during the first half of 2010, craft beer sales were up 9 percent during that same period, noted the association. Some of the more prominent craft beers include Fat Tire and Sierra Nevada, he said.
"I see craft beers as a lot more than transitional. People now are pickier about what they're drinking. As acceptance to craft beer grows, it grows in the marketplace," said Jockisch.
Jack and Stoney Jockisch, Bob's nephews, would say that craft beer is exploding. The two brothers run Market Place Selections, 1710 W. Detweiller Drive, a separate company that also distributes beer and wine.
"Craft beer is technically from a brewer who produces less than 6 million barrels of beer a year," said Jack Jockisch.
"It's all about encouraging better beer drinking. A beer list is becoming like a wine list. A craft beer drinker likes to bounce around and explore."
It's also about overcoming people's misconceptions, said Jack Jockisch. "If 90 percent of the people think all beer tastes like Bud, Miller and Coors, it's like thinking all food tastes like McDonald's," he said.
Stoney Jockisch brings up something else. "People are drinking better but drinking less," he said.
The craft beer trend is not going unnoticed by major breweries, said Stoney Jockisch. "The big beer companies have lined up their own craft beers. Budweiser distributes Chicago's Goose Island beer, for example," he said.
Craft beers have also sparked a movement that encourages beer fanciers to review various craft brews on the Internet and in publications like Beer Advocate.
Some of those beer fanciers don't hold back. "By the time Prohibition was enacted, American brewers were already on the road to ruin. Their beers were the first step toward the bland, lifeless, factory-made lagers that we loathe today," noted the Beer Advocate's Don Russell in a recent issue.
Beer tastes have changed, said Tom Wiegand, co-owner of the UFS Downtown Outlet Center, 1800 SW Adams St. "Our fathers used to drink just one brand of beer. That's not true anymore," he said.
Beer produced at regional breweries is further evidence of another production method now in vogue, said Chicago's Randy Mosher, author of "Radical Brewing." "In the past 100 years, we've seen the pendulum swing from locally produced items to modern industrial products. Now it may be swinging back," he said.
"We even have the expression, 'greatest thing since sliced bread,' but now we're thinking that sliced Wonder Bread isn't so great, after all," said Mosher.
"Craft beer is just another example of the move towards more local food. Restaurants now focus on regional items from lettuce to livestock. If a Chicago restaurant can offer something from a community brewery in Madison, Wis., there's a return," he said.
"It's an amazing time. The best time for drinking beer," said Mosher, referring to the wide variety of brewing choices now available.
Along with teaching brewers how to brew at Chicago's Siebold Institute, Mosher also helps small breweries with branding and packaging. "The branding for craft beers is pretty unlimited. What I suggest to people is to try and find your story," he said.
In the case of the Three Floyds Brewing Co. in Munster, Ind., that story involves a passion for comic book art. "The father and two sons who own the brewery love comic art," said Mosher, noting that marketing for the brewery's products such as Alpha King and Robert the Bruce reflect a comic flair. That's also in evidence in the name given to one of the brewery's wheat ales: Gumball Head, named after the underground comic book cat.
Steve King, owner of Specialty Imports in Peoria, can recall when specialty beers were considered part of the underground bar scene. "The big boys thought it was a trend that would die away," he said.
King started his company in 1990. "Back then, the specialty beers at your neighborhood bar were St. Pauli, Moosehead and Molson with an emphasis on Canadian beers. Now that craft beers have taken off, it's a matter of getting different brands in here," he said.
The smaller breweries are often limited in their ability to serve markets outside their home base, said King, who handles about 50 different craft brews. "Take Boulevard, out of Kansas City, for example. You can buy it here but not in Chicago," he said.
The next wave of change for the craft brewing industry involves cans, said King. "Brown bottles have always been the standard but cans have gotten so sophisticated in recent years plus they're recyclable. The Great River Brewing Co. in Davenport, Iowa, is one small brewer who only does cans," he said.
The rise of the craft beer operator is a case of history repeating itself, said King, organizer of the Peoria Jaycees International Beer Festival that celebrates its 19th year in Peoria this spring. "You probably had 250 breweries in Illinois in the 1950s. That number went down to zero. Now it's risen back to about 10," he said.
Peoria played a big role in that brewing history, of course. Along with major area distillers that pumped out whiskey and rye, breweries were part of the business scene for over a century in Peoria.
In "A Brief History of Peoria," published in 1896, C.A. Cockle noted that the town's principal brewers were the Gipps Brewing Co., the Leisy Brewing Co. and the Union Brewing Co. All three produced beer for widespread distribution.
"It was only a comparatively few years ago that the process of brewing was quite crude and the art was handed down from one generation to another; the beer being made by 'rule of thumb;' but of late years rapid advancement has been made in what is now the 'science of brewing,'" noted Cockle.
"All first-class breweries now either employ a chemist or else belong to what is called a 'scientific station' by which they are enabled to have all the materials used, analyzed, and the best grades of materials are thus determined with certainty and not by guess," he cited in the history.
In the case of the Leisy operation that operated where the PMP Fermentation Co. 900 NE Adams St., stands today, the company employed state-of-the-art equipment that, in 1910, allowed Leisy to fill, cork and label 90 bottles a minute, according to Bruce Leisy's "A History of the Leisy Brewing Companies."
Peoria's last major brewery, the Pabst Brewing Co., that built a new plant in Peoria Heights after Prohibition ended in 1933, closed in 1982.
At Kelleher's Irish Pub, 619 SW Water St., the past is on display along with the present. A sign for Gipp's Amberlin Beer graces the wall while 22 draft beers are on tap, many of them craft brews.
"We have an ever changing menu of beers. We try to keep it fresh," said general manager Billy Blasek.
"We have about 100 beers here. Sometimes it takes longer to decide what to drink than what to eat," he said.
Co-owner Pat Sullivan said he's wanted to add beer made at Rhodell's Brewery, the microbrewery next door, but that getting enough - beyond what Rhodell's sells itself - is a problem.
Among the exotic offerings that Kelleher's does stock is World Wide Stout from the Dogfish Head Brewery in Delaware that sells for $20 a bottle. "It's 18 percent alcohol so we only sell one to a customer," said Sullivan.
As for the most expensive bottle of beer in the house, Blasek said it was the Sam Adams Infinium brew. It comes in a wine bottle for $30. It's supposed to be like champagne. We only have nine bottles left," he said.
7 Feb. 2011