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.
Foster’s moves to unmix its well-know lagers from unsuccessful wines
The Melbourne-based drinks group is expected to announce plans to demerge its host of well-known lagers from their unsuccessful marriage with the grape next week.
Its Treasury Wine Estates arm – maker of Penfolds, Wolf Blass, and Rosemount – is uncorking itself from Carlton United Breweries (CUB), owner of Foster’s, Victoria Bitter and Carlton Draught.
It’s a move the rapidly consolidating beer world has long awaited.
London-listed SAB Miller is mulling a ?7bn move on CUB but is likely to face stiff competition from Japan’s Asahi Breweries.
Foster’s wine business has always been the poison pill standing in the way of any sale because brewers did not want to be saddled with non-core booze assets. Back in the late 1990s it embarked on what it called a multi-beverage strategy. It bought some mass market wine brands arguing that delivering wine to the same pubs, restaurants and supermarkets that already stocked its lagers would cut costs.
All went well until it plunged into wine in a big way – splashing out a toppy ?5bn buying rival Southcorp in 2005. Foster’s quickly gained one third of the total booze market and Australia’s supermarkets sought to reduce their reliance on Foster’s cutting orders.
This happened at the same time as Chile managed to produce cheaper wines and the Australian dollar went in the wrong direction, meaning wine exports made less economic sense. It soon suffered an acquisition hang-over and a series of write downs to the tune of ?2.5bn followed.
Failing any last-minute hitches, when Foster’s releases its first-half update next Tuesday, insiders say it will issue a scheme of arrangement, firing the starting gun for a summer demerger.
Michael Ullmer, a non-executive director, effectively hoisted the ‘for sale’ sign telling the Daily Mail: ‘It’s not for the company to go and market itself – it’s up to other companies to approach us.’
American private equity firm Cerberus did stage a failed ?1.6bn bid for the wine business at the end of last year. As for the CUB, some observers have questioned the value Australia’s low growth beer market would have to SAB, which is seen as specialising in emerging markets.
One suggested any bid would be a protective move to prevent rivals from gaining scale. But sources close to SAB argued the brewer would never make an acquisition for defensive reasons.
Foster’s has been haemorrhaging market share and the source said: ‘SAB has a good track record in turning businesses around and if it were to bid it would be because it could see some value growing Foster’s stable of beers.’
The two businesses are likely to be separated in the summer but there is a case for bidders to move early. By teaming up with private equity they could pre-empt rivals and try to elicit an agreed bid, breaking up the business themselves.
8 Feb. 2011