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.
Predator keen to revitalise premium beer market
Drawing on a successful history of boosting sales in the strong beer markets of the Czech Republic and Poland, analysts yesterday said the maker of Grolsch has plenty of scope to build premium brands in Australia.
Fosters shares gained 1.17 per cent in trading yesterday, finishing at $5.20, with investors continuing to back the the move by Foster's earlier this week to knock back a $9.5 billion takeover proposal - with many analysts saying the bid will have to grow to at least $10.5 billion to succeed.
Analysts are now predicting SABMiller will have to return with a price from $5.25 to $5.50 - rather than the $4.90 initially offered.
SABMiller was believed to be trying to meet Foster's chairman David Crawford in London for negotiations.
While SABMiller on Tuesday said any purchase would be funded from existing profits and new debt facilities, Bloomberg yesterday reported the brewer would raise $10 billion in debt.
Analysts predict the play for Fosters will be a long-haul by the cashed up Anglo-African brewer which they say is driven by a belief no other serious bidders will emerge.
Pundits yesterday drew a picture in which SABMiller could effectively stare down Foster's to extract the lowest possible price.
Two key tactics include waiting for the Aussie dollar to drop and for Foster's results to reflect the brewer's weak operating position to investors.
"SABMiller's opening proposal of $4.90 was not a knockout offer," Credit Suisse analyst Larry Gandler said.
To further complicate matters analysts yesterday said SABMiller itself could be a takeover target -- and that the move on Foster's could be a bid to pick up a strategically important asset to make themselves too expensive for a predator.
Analysts yesterday said Foster's could do more to increase its Australian market.
"Our visits to Poland and Czech several years back left us impressed with management's ability to drive per capita consumption of beer in these relatively high per capita consumption markets," Mr Gandler said.
But Merrill Lynch analyst David Errington said there was also earnings potential in replacing the Abbotsford brewery with a state of the art facility.
Mr Errington said there would also be earnings of up to $100 million in reclaiming the 5 per cent market share lost over the past half decade.
23 Jun. 2011