The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
India. UB plans to increase area under barley
The Vijay Mallya-owned company is in talks with the Uttar Pradesh government to secure land tracts to cultivate barley. Currently, the company cultivates barley in around 23,000 acres of land in states like Bihar and Uttar Pradesh. This area, used by the company and its associates, meets around 15 per cent of the company’s total barley requirements.
The remaining 85 per cent is sourced through open market operations. The company, in the financial year 2009-1010, sold a little more than 100 million cases of beer and aims to sell 130 million cases in the current financial year. “Presently, we are doing some trial farming in Uttar Pradesh, which is the largest producer of the commodity in the country. If this succeeds and we are able to get favourable disposition from the state government, captive sourcing will see a quantum leap,” said United Breweries Managing Director Kalyan Ganguly.
He also said that the company was hopeful of increasing its captive sourcing by around 30 per cent in the next two years. Key raw materials like barley, sugar and malt constitute 30 per cent of a beer’s total production cost. According to industry experts, captive sourcing of barley is expected to slash this cost by around 15-20 per cent, along with a possibility of a significant revenue rise in the near future. Rising commodity prices have, of late, become a matter of concern for most agri-based manufacturers in the country.
“The major concern of the company is the unabated inflation, which has its impact in increase in the price of our key ingredients — sugar, malt and barley, among others. There will be pressure on the cost side due to such price rise,” Ganguly said.
He added that such backward integration would help the company in managing cost pressures due to inflation.
However, Ganguly said that barley for Heineken beer, which UB is preparing to brew in India, would be imported from other countries. “The quality of barley required for Heineken beer is not produced in India. So, we have to import barley from European nations for maintaining the quality standards of that beer,” he added.
United Breweries had entered into a joint venture with Heineken in 2009 to launch Heineken beer in India. The company is expected to launch Heineken’s products in the country by the end of this year.
UBL had posted a 40.26 per cent rise in its net profit at Rs 29.82 crore in the third quarter ended December, owing to sound growth in sales numbers. The total income of the company rose by 38 per cent to Rs 609.62 crore, compared with Rs 442.11 crore in the same period last year.
The United Breweries scrip closed at Rs 425.15 on the Bombay Stock Exchange on Wednesday, down 1.07 per cent over its previous close.
20 Feb. 2011