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.
Heineken sees 2011 cost pressure after strong Q1
Heineken, whose chief brands are Heineken itself and Amstel, Europe's number one and three beers by sales, reported consolidated volumes on Wednesday that were higher than expectations and the first annual increase since the end of 2008.
Growth was strongest in Africa and the Middle East despite unrest in Egypt, but beer sales also rose in the mature and flat western Europe market, due to more drinking in Britain, France and the Netherlands.
Beer consumption also rebounded in Russia from a year ago, when a tripling of excise duty on beer struck.
The Dutch brewer repeated its forecast of a low single-digit increase in input costs per hectolitre.
It also said that higher planned marketing spending this year was likely to impact profits, notably in Europe, still the dominant part of Heineken's business. Almost half of the Dutch brewer's revenue last year came from western Europe.
The growth of volumes and drive to reduce costs resulted in a like-for-like rise of operating profit before one-offs of more than 20 percent in the first quarter.
Chief Financial Officer Rene Hooft Graafland told a news conference that this growth in the first quarter, a less significant period for the group, was not an indication of Heineken's full-year performance.
Heineken's shares were down 1.0 percent at 39.78 euros at 0913 GMT, while the STOXX European food and beverage index .SX3PO was 0.2 percent stronger.
Brokers generally welcomed the trading update and said the weakness of Heineken's shares was likely a reaction to their outperformance in recent weeks -- an 11 percent rise compared with a 7 percent increase of the Stoxx sector index in the past month. "These are a good set of numbers. You can't get away from that," said Trevor Stirling of Bernstein Research. "But the shares have really run up in the past weeks. I think expectations were high among some investors."
JP Morgan Cazenove, which has a 'neutral' rating on the stock said in a morning note it recommended investors take profits, with tougher volume comparisons and higher marketing costs in Europe later in the year.
Consolidated volume rose by a like-for-like 5.5 percent to 33.8 million hectolitres, more than the 32.8 million on average expected in a Reuters poll of 12 brokers.
First-quarter revenue was 3.6 percent higher at 3.59 billion euros, against the average market expectation of 3.57 billion euros.
Rival SABMiller (SAB.L) on Tuesday beat forecasts with a 3 percent rise of beer volumes in the first three months of 2011, led by emerging markets in Africa and Asia. [ID:nLDE73E0W7] (Editing by Mike Nesbit)
21 Apr. 2011