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. Outgrowing its Fulton Street brewery, Goose Island outsourcing two beers
Soon, all of two of the company’s most popular beers, Honker’s Ale and India Pale Ale, will be made more than 1,000 miles away from the city in Portsmouth, N.H. Doing so, the company said, will allow it to focus on its more specialized beers locally.
It’s the first time that Goose Island has produced its beer outside of Chicago since it started brewing in 1988, and its first major expansion since it opened its brewery on Fulton Street in 1995.
“We’ve continued to expand the Fulton plant, and we’ll expand it this year, but it does have its limits,” said John Hall, Goose Island’s founder and president. “We’d be in a fix without this contract.”
In order to keep up with growing demand in Chicago, as well as to continue expanding nationwide to markets like New York, the company needed to find new capacity to brew its beers. It found that in its partnership with the Craft Brewer’s Association, and its Portsmouth brewery that produces, among other beers, Redhook Ales.
“It’ll give us more capacity here to work on our specialty beers here,” Hall said. “It costs a lot of money, that’s a real big concern. But from a quality standpoint, probably not. We wouldn’t be doing it if we thought there was [a problem with the quality].”
Brett Porter, Goose Island’s head brewer, said that the company has found a fascinating and frustrating problem as demand has intensified.
“I’ve never heard a distributor threaten to remove a beer from shelves before because they couldn’t get enough,” Porter said, but it’s happening to Goose Island now, necessitating their choice to expand elsewhere. “We have to balance our desire to brew everything here with our need to satisfy demand. We want to embrace Chicago, but we can’t make enough beer to do so.”
But Porter said that in some ways, the move to New Hampshire might have a silver lining.
“Portsmouth’s better suited to making Honker’s and IPAs than our plant,” Porter said.
Nevertheless, there’s been a learning curve as they’ve tried to make the beer perfectly in another location. Every brewery is different, Porter said, and they’ve been trying to deal with that.
“We’re on our fifth iteration of IPA in New Hampshire, and the last batch fooled most people,” Porter said. “It’s a bit like a translation of a French novel to English. Even though we’ve been using the exact same malts, the beer has been coming out a little lighter — that’s the kind of thing that happens.”
But Porter said he thinks the company’s end goal is to bring production back to Chicago. After all, this is a company that’s long touted its use of Midwestern ingredients, and still runs — and innovates in — its original brewpub on Clybourn in Lincoln Park.
“At some point, maybe we’ll build another brewery in Chicago, and everything would come out of that,” Porter said. “Or maybe that becomes the 312 plant [Goose Island’s extremely popular wheat beer] and the older plant becomes the specialty beer plant.”
Building a new plant is an expensive venture, though. So in the meantime, they’re adding a few brewing tanks on the outside of the Fulton Street plant. It’s just another way they’re adding capacity.
So despite outsourcing some production, Hall said he’s committed to the city that birthed the company, and whose name graces every bottle in letters almost as big as the brand itself.
“It’s been an unbelievably good roll. We’re a Chicago company and we’re thrilled to be here and thrilled to be facing these decisions,” said Hall.
17 Feb. 2011