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.
SABMiller May Face Coca-Cola Amatil Payout in Any Foster’s Bid
The terms of their partnership require any SABMiller alcohol expansion in Australia to be first offered to their Pacific Beverages venture, which holds rights for brands including Peroni, Miller and Grolsch, Coca-Cola Amatil Chief Executive Officer Terry Davis said in a Feb. 23 interview.
“If the joint venture says no, then they have a bit of a problem,” Davis said by telephone. “You can expect that I would want fair value for those brands.”
Pacific Beverages was formed in 2006 with an aim to create Australia’s third-largest beer business in a market where more than 90 percent of sales are controlled by Foster’s and the Lion Nathan unit of Kirin Holdings Co. SABMiller is working with JPMorgan Chase & Co. to study a bid for Foster’s once Australia’s biggest brewer completes a spinoff of its wine unit, a person with knowledge of the situation has said.
“There might be a breakup fee in the hundreds of millions,” said Theo Maas, who holds beverage stocks among the $5 billion he helps manage at Arnhem Investment Management in Sydney.
Nigel Fairbrass, a spokesman for London-based SABMiller, declined to comment on the venture with Sydney-based Coca-Cola Amatil. Troy Hey, a spokesman for Melbourne-based Foster’s, declined to comment on “market speculation” the company may be a takeover target.
Speculation increased that SABMiller may purchase Foster’s, maker of Australia’s top selling brew Victoria Bitter, after the Melbourne-based company said on Feb. 15 that it plans to spin off the world’s second-largest wine business by May to focus on boosting beer earnings. Outgoing Chief Executive Officer Ian Johnston said on a conference call that day the Foster’s board of directors would consider any bid if it came along.
“When I negotiated the contract I was mindful of this,” said Davis, 53.
Pacific Beverages, which is 50 percent owned by each company, posted its first annual profit this week, with Coca- Cola Amatil earning A$1.5 million ($1.52 million) from it in the 12 months ended Dec. 31.
The venture last year started production at a new A$120 million brewery near Newcastle north of Sydney as it seeks to win more sales of draft beer in pubs and clubs.
The venture, which also sells Jim Beam bourbon and Russian Standard vodka, sells five beers in Australia’s top 20 premium packaged labels with both Grolsch and Peroni Nastro Azzurro in the top ten.
“The pubs realize they make more margin selling a premium beer than they do selling a commercial beer,” Davis said. “The independent customers in particular want to break the stranglehold of the major brewers.”
25 Feb. 2011