The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
The Brewing Organic Beer Market
After growing 7.2% in 2009, the craft brewing industry expanded by 11% in 2010, bringing its share of the U.S. beer market to 4.9%. However, given craft brewers’ generally higher price points than those of macro brewers like Anheuser-Busch Inbev and MillerCoors, this accounted for 7.6% of all sales in dollars. This reflects a growth in retail value of $600 million over the previous year, despite a 1% drop in volume of the entire industry. The number of breweries in the U.S. jumped concurrently to 1,759, the highest such total since the late 1800s. Of these, 1,716 were identified as craft brewers by the Brewers Association.
This dramatic increase in craft beer sales during the recession indicates that consumers’ tastes are evolving so much that they have become willing to accept the higher costs of a premium good like craft beer over cheaper, macro-brewed substitutes, even when their wallets are pinched, leading some analysts to project that craft beer’s share of the domestic market could even climb from 5% to 20% over the next ten years.
While organic beer still makes up only a fraction of the craft beer market, it is gaining ground very quickly. Between 2003 and 2009, U.S. organic beer sales spiked from $9 million to $41 million. However, with the correspondingly low supply of organic ingredients currently available on the market, organic brewers are subject to higher costs for their inputs than ordinary craft brewers. Suppliers are aware that organic brewers are willing to absorb these higher costs in order to make their beer organic, but these costs are subject to a low ceiling because organic brewers generally refuse to offset their variable costs with higher price points. Instead, they sell their products at prices comparable to the craft beer industry average. While these practices serve to minimize organic brewers’ bottom lines, it simultaneously limits suppliers’ ability to further manipulate prices.
In accordance with the industry’s reputation for innovation, many craft brewers have discovered unique ways to overcome these hurdles. For instance, Bison Brewing Company, a contract brewer located in Berkeley, California, sources all of its ingredients from the American northwest. As their business has grown, they have enacted vertical impacts on their supply chain by driving the conversion from conventional to organic farming practices in that region. Additionally, companies like Sierra Nevada have begun brewing small batches of organic beer using ingredients exclusively grown on their properties.
Because organic farmlands require 50% less energy to maintain than conventional farms, it is likely that if demand for organic beers continues to increase at a similar rate, or even one comparable to the craft beer industry as a whole, then organic brewers will soon benefit from increased profit margins as their average variable costs decline.
23 May. 2011