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.
China. CR Snow announces three acquisitions in Anhui, Liaoning and Zhejiang
CR Snow has agreed to acquire the respective brewing assets in ???????????? (“Anqing Tianzhu Beer Company Limited” or “Tianzhu Beer”), ???????????? (“Liaoning Songlin Brewery Group Company Limited” or “Songlin Brewery”) and ?????????? (“Zhejiang Luck Beer Company Limited” or “Luck Beer”) through three newly-formed subsidiaries in which it will own 80%, 85% and 100% equity interests respectively. All three breweries will undergo technology upgrade to their existing facilities in order to align with the production requirements for “SNOW”. Upon conclusion, they will add a total of about 468,000 kiloliters to CR Snow’s existing production capacity of about 11.7 million kiloliters.
Tianzhu Beer is situated at Anqing, a historic city at the south-western region of Anhui Province. It has an annual production capacity of about 98,000 kiloliters and a sales volume of about 40,000 kiloliters in 2007. At present, CR Snow has eight breweries in Anhui Province and is the leading brewer in the province. The acquisition will enhance the operational efficiency in southern Anhui and further consolidate the substantial share in the province.
Songlin Brewery has two plants at Chaoyang and Jianping with a total sales volume of approximately 105,000 kiloliters in 2007. Its combined annual production capacity of 208,000 kiloliters will be increased to 250,000 kiloliters upon technology upgrade after acquisition. Songlin Brewery will generate synergies with CR Snow’s existing breweries at Huludao and Panjin, cementing a strong network in western Liaoning. It will also provide a foothold for expansion into the central part of Inner Mongolia. Currently, CR Snow is the largest brewer in Liaoning Province with nine breweries.
Luck Beer is located at Yuhuan county, Taizhou, an economically prosperous coastal city in central Zhejiang. It has an annual production capacity of about 120,000 kiloliters and a sales volume of about 33,000 kiloliters in 2007. CR Snow currently has three breweries in northern Zhejiang and a fourth one under construction at Ningbo. This acquisition will support the rapid development of “SNOW” in the region, extending its presence in southern Zhejiang.
Mr. Long Chen, Managing Director of China Resources Enterprise, Limited said, “Liaoning, Anhui and Zhejiang are all our major existing markets. These acquisitions will enable us to strengthen our position with wider geographical coverage and lower cost base. It will also optimise our product structure.” Mr. Ari Mervis, Managing Director of SABMiller Asia, said, “The SNOW brand is now amongst the leading beer brands in the world and these acquisitions will further develop its national presence in mainland China.”
About China Resources Snow Breweries Limited
China Resources Snow Breweries Limited was established by the Company in 1993 and became a joint venture with SABMIller plc in 1994. It is engaged in the production, sales and marketing of beer in China. Its shareholders are China Resources Enterprise, Limited and SABMiller Asia Limited, a subsidiary of SABMiller plc. China Resources Enterprise, Limited has a 51% interest in China Resources Snow Breweries Limited while SABMiller Asia Limited holds the remaining 49% interest. It operates about 60 breweries in the Chinese Mainland with a total sales volume of about 6.9 million kiloliters in 2007.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is one of the constituent stocks of the Hang Seng Index in Hong Kong. The Group focuses on the consumer businesses in both the Chinese Mainland and Hong Kong, with core activities being retail, beverage, food processing and distribution, textile and property investment.
About SABMiller plc
SABMiller plc is one of the world’s largest brewers with brewing interests and distribution agreements across six continents. The group’s wide portfolio of brands includes premium international beers such as Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as market-leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the largest bottlers of Coca-Cola products in the world. In the year ended 31 March 2008, the group reported US$3,639 million in adjusted pre-tax profit and revenue of US$21,410 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
8 Mar. 2011