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.
Commencement of Discussions for Operational Integration with Pokka Corporation through Reorganization in the Group
1. Commencement of Discussions with Pokka
The alcoholic beverage, beverage and food industries in Japan experienced a decline in consumer confidence due to delayed economic recovery and deflation, and a decline in the size of markets due to population decrease, the declining birthrate and aging population. Companies within the above industries are confronted with circumstances under which they are required to swiftly develop strategies to expand access to customers, to promote differentiation and enhance competitiveness utilizing their own strengths, and to actively develop their businesses in foreign markets. Within these circumstances, the Company and Pokka executed a capital and business alliance agreement in September 2009, and the Company and Pokka have made efforts to enhance the vending machines business, reduce costs through joint procurement, optimize production systems, develop business jointly in foreign markets, etc., and have achieved certain outcomes, in addition, the mutual relationship of trust between the Company and Pokka was further strengthened through collaboration after the alliance.
However, the Company and Pokka jointly reached a decision that the best measure for the two companies would be to develop their current capital and business alliance together, not independently, and to form an integrated corporate group to accelerate their collaboration, so that they are able to further improve their position within the current severe market climate.
Therefore, as the first step towards formation of a new corporate group, as stated in the “Notice of Acquisition of Shares (Subsidiarisation) of Pokka Corporation,” which was separately published by the Company today, the Company will acquire the additional shares of Pokka in late March of 2011, thereby causing Pokka to become a consolidated subsidiary of the Company.
In addition, in order to form a “corporate group creating value in food,” that has enhanced competitiveness in the domestic and foreign alcoholic beverage, beverage, food and restaurant industries, as stated in the exhibit “Commencement of Discussions for Operational Integration of Sapporo Holdings Limited and Pokka Corporation,” the Company has agreed to commence discussions with Pokka for the operational integration of the two companies through reorganization in groups, today.
The Company and Pokka will begin discussions regarding reorganization of the group’s business and organizational structure, and will consider the management setup and corporate name, etc. of the holding company appropriate for the newly reorganized corporate group, and move forward with discussions aiming to implement the new business structure in April 2012, when the 88th annual shareholders meeting of the Company, to be held in late March of 2012 will be finished.
2. Future Prospective
The Company and Pokka will promptly establish a committee for the operational integration, and will move forward with discussions regarding the operational integration, in addition, the Company will acquire the additional shares of Pokka in late March of 2011, as stated above. The Company and Pokka will consider reorganization of the group’s business and organizational structure, the management setup and corporate name, etc. of the holding company, and will move forward with discussions aiming to implement the new business structure in April 2012. The Company will announce its plan for the implementation of the new business structure at another time once it has been specifically determined.
10 Feb. 2011