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.
Carlsberg Quarterly Profit Misses Estimates on Costs, Russian Sales Drop
Net income fell 21 percent to 301 million kroner ($55 million), Copenhagen-based Carlsberg said today in a statement. Profit was less than the 424 million-krone average estimate of 18 analysts surveyed by Bloomberg News. Full-year earnings before income and tax, excluding some items, rose 9 percent to 10.3 billion kroner. Carlsberg said it aims for earnings on that basis to increase by a “high single-digit” percentage in 2011.
“We are very pleased with the strong 2010 performance,” even as it was “an extraordinary year for the group due to the substantial excise duty increase in our largest market,” Chief Executive Officer Joergen Buhl Rasmussen said in the statement. “For 2011 we believe market dynamics will improve slightly, not least in eastern Europe where we anticipate the Russian market to return to growth.”
Carlsberg is facing challenges in 2011 from steep increases in the price of commodities used to make and package its beer after record droughts cut the amount of grain harvested in Russia and eastern Europe last year. The company gets 52 percent of its profit from the region. Sales in Russia fell last year following a 200 percent increase in tax on beer.
The company is among brewers seeking growth in regions outside western Europe and the U.S., where sluggish consumer spending is restricting sales. Carlsberg reiterated today a statement in November that increasing costs will force the company to raise prices.
“Investors are likely to focus on full-year guidance, particularly regarding growth expectations for Russia,” Trevor Stirling, an analyst at Sanford C. Bernstein in London, wrote in a note published before the results.
Carlsberg said it expects the Russian beer market to expand 2 percent to 4 percent this year, compared with a decline of a “low single-digit” percentage in northern and western Europe. Operating profit in eastern Europe this year will be “impacted negatively” by input cost increases that are higher than in the rest of the world, Carlsberg said.
21 Feb. 2011