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. Small Brewers Seek to Modernize Archaic Laws to Reflect Changes in the Beer Industry
“After decades of the same regulations, today’s marketplace has made Massachusetts state law damaging for small brewers in our state, jeopardizing both consumer choice and the hundreds of jobs in our industry”
While the industry has changed dramatically, the laws that regulate brewers and their distributors (also called wholesalers) have not. Laws passed in 1971 were written to protect small, local wholesalers from the powerful and dominant national brewers. Specifically, Massachusetts passed laws making it difficult, if not impossible, for a brewery to ever switch distributors. Distributors in those days represented very few brands, and the loss of any one of them was potentially catastrophic.
Today, thanks to the American Craft Beer Revolution, there are more than 1,200 small breweries nationwide, including almost forty brewers here in Massachusetts. The archaic laws of the 1970s need to be modernized to reflect the new marketplace, and State Representative Alice Peisch (D- Wellesley) filed legislation, HD 2759, to bring the law in sync with the American beer business in the 21st century. The legislation is lauded by the Brewers Association, who represents all craft brewers nationwide.
“Modernizing the current law to allow for more flexibility for small brewers and more choice for consumers is what today’s marketplace needs. This bill will allow small brewers to make their product more widely available, while also giving adequate protections to wholesalers,” said Representative Peisch. “I look forward to working with all interested parties to make this bill a reality.”
The legislation that Representative Peisch filed is carefully worded so that it will continue to protect wholesalers from the big, national brewers, but it will create opportunity for small brewers to switch distributors if the brewer feels they would be better served moving to a different distributor who would help make their beer more widely available at retail. Substantial compensation would be offered to the existing distributor by the small brewer.
Increasingly, the smallest craft brewers are reporting that some wholesalers focus on big brands while neglecting to deliver their craft beer brands to stores and restaurants, allowing them instead to collect dust and go stale in warehouses. Brewers have little recourse even when a wholesaler fails to perform. This is occurring at a time when consumers are clamoring for high quality, innovative craft beers. The Massachusetts Brewers’ Guild wants to support every brewery’s opportunity to succeed. This legislation is critical for the job security of the hundreds of workers employed at breweries in Massachusetts.
“After decades of the same regulations, today’s marketplace has made Massachusetts state law damaging for small brewers in our state, jeopardizing both consumer choice and the hundreds of jobs in our industry,” said Rob Martin, president of the Massachusetts Brewers Guild.
The Guild appreciates that brewers and wholesalers forge essential partnerships, and one cannot survive in business without the other. So, by working through the legislative process, it hopes to reach an agreement that protects both brewer and wholesaler and enhances their common opportunities for success.
In July 2010, the legislature did not act on a proposal made by wholesalers that would impose even stricter state laws. The wholesalers refiled that same legislation this year. The Guild feels strongly that now is the time to loosen, rather than tighten restrictions imposed on small brewers to allow small brewers to continue to grow and create jobs in the Commonwealth.
9 Feb. 2011