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.
Foster’s Rejects SABMiller Bid
Foster's Group rejected a nearly $10 billion takeover offer from global brewing giant SABMiller
Foster's beer business has long been considered a potential takeover target amid global consolidation in the brewing industry. SABMiller's bid follows the recent demerger of Foster's wine business, which had struggled in recent years.
"SABMiller can conclude a transaction quickly and will continue to seek engagement with the board of Foster's to put an agreed proposal to Foster's shareholders," SABMiller Chief Executive Graham Mackay said in a statement.
Foster's said early Tuesday that SABMiller made an unsolicited, incomplete, nonbinding and conditional offer to acquire all Foster's shares for A$4.90 a share, an 8.2% premium to Monday's closing share price.
"The board of Foster's believes that the proposal significantly undervalues the company in the context of a change of control and, as such, it doesn't intend to take any further action in relation to it," Foster's said.
Sales of beer in Australia have come under pressure in recent years as specialist boutique and low-carbohydrate beers have grown in popularity.
Foster's last month carved out its underperforming wine assets into a separate listed company, Treasury Wine Estates. The wine assets have been plagued by writedowns, with an oversupply of grapes and wines from Australia in the global marketplace. The financial crisis and a strong Australian dollar have also made it difficult for Foster's to grow sales of its premium wines in key markets like the U.S.
SABMiller's joint venture partner in Australia, Coca-Cola Amatil, said earlier Tuesday the pair were amending the terms of their JV to allow SABMiller to buy shares in Foster's. The initial arrangement surrounding the Pacific Beverages JV limited SABMiller's ability to buy shares in Foster's in its own right.
The Australian beverages market has been consolidating in recent years. Kirin Holdings Co. acquired Foster's rival Lion Nathan Ltd. for about A$3.3 billion in 2009. Japanese beverage maker Suntory Holdings Ltd. bought nonalcoholic-drinks maker Frucor in 2008, while Asahi Breweries Ltd. paid US$744 million in 2009 for the Australian unit of Schweppes from Cadbury PLC, based on exchange rates at that time.
Foster's shares were up 12.8% at A$5.11 late Tuesday morning in Sydney.
Foster's is being advised by Goldman Sachs, Gresham and Allens Arthur Robinson.
21 Jun. 2011