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Global hop market

A 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 Russia

Germany 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.

South Africa. Brandhouse beats its chest on gains as the battle for premium beer market hots up

The battle for the local premium beer market seems to be hotting up, with Brandhouse, the second largest brewer in the country, gloating about its increasing penetration.

Brandhouse said yesterday it was continuing to gain market share across beer and spirits categories.

“Brandhouse’s beer performance has shown phenomenal growth of over 18% for the period September to February, as compared to the same period in 2009/2010,” said MD Gerald Mahinda. He was speaking to reporters at the company’s newly constructed Sedibeng Brewery yesterday.

About €300m (about R3bn) was invested to construct Sedibeng Brewery, which was officially opened in March last year.

Brandhouse is a three-way joint venture between global beer companies Diageo, Heineken International and Namibia Breweries.

Market analyst Chris Gilmour received Brandhouse’s message with caution.

Comparisons between brandhouse and SAB that include items other than beer are irrelevant. SAB is a brewer while Brandhouse is also a manufacturer and distributor of beer, wines and spirits.

Thus the only meaningful comparative statistic in the Brandhouse press release is the statement that the group’s collective beer market share for the five month period has moved from 12% to 14%. But it should be noted that this only takes Brandhouse’s collective beer market share, Amstel, Heineken and Windhoek, back to where it was four years ago after Heineken took back the rights from SAB to brew and distribute Amstel locally. It is clear that Amstel’s market share has declined from 9% to 10% in 2007 to just over 6% now. Amstel is now the second-largest premium beer in the country after SAB’s Castle Lite.

Mahinda said premium beer brands Amstel, Heineken and Windhoek were growing at almost triple the rate of total beer, at around 19%, reaching slightly over 23% share of the segment.

He said Brandhouse’s share of the spirits market also showed remarkable growth. According to Nielsen data as of the end of February, market share increased from 27.7% to 30%.

Brandhouse’s whisky brands that have gained share include Johnnie Walker Black Label, Bell’s, Johnnie Walker Red Label, Black & White and White Horse.

“We believe the key to our success is offering consumers greater choice and access to quality brands, as well as offering retailers more attractive margins.

“Our fantastic portfolio of beer, spirits, RDTs (ready to drinks), and cider brand allow consumers to access choice in a growing market like South Africa,” Mahinda said.

“That differentiates us from other players in the market. The reason we are investing further, particularly on modern brewing equipment, is because we are growing and we have realised that potential,” he said.

Mahinda said the group would continue developing its model and grow its market share profitably in the coming years.

Since it was opened last year, the Sedibeng Brewery has employed more than 1 000 people, mostly graduates without work-related experience. The company was providing technical training to most of its workforce.

21 Apr. 2011



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