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.
Fort Worth brewery finds silver lining in snowstorm cloud
For years, the artisan brewer just south of downtown depended on a volunteer bottling crew to get by, an unheard-of practice in the industry, according to the Brewers Association. It has had a revolving door for head brewers, with six holding the title over seven years.
Securing shelf space in supermarkets and taps in bars meant an exhausting daily struggle, each victory bringing more hours making deliveries and stacking coolers until distributors were found. But even that proved no panacea.
At one juncture, bar owners complained that a distributor swapped out kegs of Rahr Ugly Pug Lager for those of a national brand, claiming that Ugly Pug wasn't available when it was.
That problem was solved, but financial security seemed a distant prospect for long stretches, with founders Fritz and Erin Rahr coming perilously close to losing their fledgling venture. At one point the microbrewery was down to one paid employee.
Fritz Rahr, a former railroad marketing specialist with brewing training, took over as brewmaster in addition to his other duties. A new infusion of capital saved the business, but the couple's personal finances were drained. Fritz Rahr uprooted his family to the Virgin Islands, where he ran a petroleum coke operation for 30 months to recoup his savings while a partner ran the brewery.
Back from the Caribbean in August 2009, Fritz Rahr resumed control, and by February 2010, he said, "we were beginning to see the light at the end of the tunnel."
Sales had gained traction, soaring 29 percent in 2009 from the year before. A deal was signed to brew a super-premium ale in 22-ounce bottles for a wine company. The brewery's Saturday tastings and tours were regularly packed. And Rahr's reputation beyond Fort Worth grew through remarkable feats at respected beer competitions, including the World Beer Cup, considered the Olympics of international brewing.
It was Feb. 12, 2010. A heavy build-up of snow collapsed sections of the roof of the brewery, a former Pepsi-Cola warehouse. It destroyed the bottling line, vital pipelines, a 30-by-40-foot cooler and 80,000 bottles. A large fermentation tank was damaged but reparable.
Much of the beer was saved. That kept bars and restaurants supplied after kegs were filled and trucked off to distributors. But retail stores had no six-packs, and brewing ceased until July. No bottled beer was shipped again until mid-August.
Fortunately, the company's business-interruption insurance covered overhead expenses, so Rahr avoided layoffs. Some of his workers made tongue-in-cheek videos for YouTube about how brewers Austin Jones and Jason Lyon killed time when kept from crafting lagers and ales.
But there were also more serious endeavors. The crew made the brewing process far more efficient, cutting down transfer time between tanks by hours. This allows more beer to be made in the initial, "hot" stages of the brewing process before fermentation. Such re-engineering would have been impossible while the brewery was operating, Fritz Rahr said.
On the marketing side, "we used the downtime to strategically realign our brands," said Rahr, who holds an MBA from TCU. The redesigned labels and six-packs use art by Colorado-based illustrator Erwin Sherman, formerly of Fort Worth, to give the line a crisp, cohesive and upscale look.
Rahr's brewing heritage, traced to 1847 in the U.S., remains emphasized. A seasonal ale still bears the image of the 19th-century sailing ship Storm Cloud that brought Rahr forebears from Germany.
The blonde lager label is now graced by a pinup-style rendering of Fritz Rahr's accomplished mother, Jodell Stirmlinger Rahr, a Juilliard-trained singer who was a Miss USA semifinalist in 1952. The new Oktoberfest label will depict his father, Frederick Rahr Sr., an executive in the family's malting business, dressed as Munich's mayor tapping the ceremonial beer barrel.
The antiquated bottling line has been replaced with a faster, far more efficient one. That makes it easier to switch between runs of 12-ounce longnecks and the new, lucrative 22-ounce "bomber" bottles. In addition, twist-off caps have been replaced with the old-fashioned pry-off variety, which, Rahr says, is more attuned to the craft beer experience.
The community rallied after the roof caved in. Restaurants like Cooper's Old Time Pit Bar-B-Que in the Stockyards and venues like Thistle Hill threw Rahr tastings after the roof collapse made on-site events impossible. Fort Worth singer-songwriter Brad Thompson performed a soulful lament to the brewery roof collapse. ("One day we'll turn it all back around ...")
Still, the kegged beer eventually ran dry a few weeks before shipments resumed. Fritz Rahr worried that the initial display of consumer loyalty might evaporate a few months after the reopening. The fear proved unfounded.
If anything, the disaster helped strengthen the city's relationship with its only microbrewery. Sales remained strong this winter. Rahr & Sons, it seemed, has roared back ever since. It proves, Fritz Rahr said, that the building disaster "had a silver lining."
Even with no production for five months, 2010 sales beat the previous year's, he said. A closely held partnership, Rahr & Sons declined to divulge figures.
When it released 9,000 22-ounce bottles of whiskey barrel-aged Winter Warmer ale in December, 95 percent were sold in a week, Fritz Rahr said.
"People were going into Central Market and buying whole cases," he marveled.
Rahr's recovery might also be benefiting from a boom in craft beers. More Americans are sampling the artisanal brews, although they still represent just 6.9 percent of overall consumption. But according to the Brewers Association, the craft industry group, the market segment increased 9 percent by volume during the first half of 2010 and 12 percent by retail dollars. In the same time, overall U.S. beer sales slipped 2.7 percent by volume.
To mark the roof collapse anniversary last week, Rahr & Sons created Snowmageddon, a limited release of what will be an annual special brew. This year, it will be 800 cases -- 9,600 22-ounce bottles -- of Imperial Oatmeal Stout.
On the business end, Rahr is finalizing new tie-ups with beer distributors in Austin, Temple-Killeen and San Marcos-New Braunfels. Those are in addition to networks that now cover Fort Worth, Houston, San Antonio, Dallas, Denton and Weatherford.
Volunteers no longer staff the bottling line, although they still operate the taps during tasting events. In March, four new, 100-barrel fermentation tanks will be installed.
And Fritz Rahr feels confident enough to add a new full-time employee to the brewing department, bringing overall employment to eight.
"Before, it was, 'How do we survive till next month?'
"Now," he said, "it's, 'What do we need to do for the next five, 10 years?'"
13 Feb. 2011