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.
SABMiller finds way of reducing raw material costs
The brewer currently uses approximately 42bn. crowns every year to top bottled lagers and carbonated soft drinks, with an equivalent weight of 100,000 tonnes - nearly twice the weight of the steel used in the Empire State Building.
Using conservative estimates, the new low-gauge crown could reduce the amount of steel required across SABMiller's global production platform by at least 10% a year, enough to build London another Olympic stadium.
The standard thickness of steel used to create bottle crowns across the brewing industry is between 0.22mm and 0.24mm. Backus' new, low-gauge crown uses 0.17mm steel, possible thanks to a unique design which embosses a ring around the bottle lip to prevent a 'spring back' effect that can lead to leakage and contamination.
In the 12 months to 31 March 2010, Backus used around 20m. low-gauge crowns in production at its San Juan plant in Pucallpa City. Following this successful pilot, the low-gauge crowns have been rolled out across the remaining four breweries in Peru, with approximately 80m. low-gauge crowns being used in the twelve months to 31 March 2011.
While the Peruvian low-gauge crown is forecast to be fully implemented during the second half of F12 in Peru and Ecuador, other countries and regions are working on similar low-gauge projects. Netherlands based Grolsch brewery has performed trials on a 0.18mm crown from Italian crown producer Pelliconi, and results have encouraged other European countries to follow its lead, with trials being planned for all countries in F12.
SABMiller's partially-owned South African supplier, Coleus, will implement a 0.21mm low-gauge crown, which depends on steel supplier capability constraints but will achieve the same commercial benefits as their European counterparts due to special market conditions.
If the Peruvian initiative could be rolled out across SABMiller, it could hypothetically deliver annual cost savings of $12.6m in material costs alone.
The reduced weight of the bottle crowns will also have a positive impact on the environment. Today, a standard bottle crown weighs approximately 2.38 grams. The low-gauge bottle crown will weigh around 2.14 grams, which will mean a 360 gram weight reduction in every pallet being transported to the group's breweries and from the brewery to retailers and distributors. In addition, reduced weight in transport will deliver as yet unqualified cost savings and reductions in C02 emissions through transportation.
Maurice Egan, Group Head of Manufacturing at SABMiller said: "The low-gauge crowns programme is just one example of a cumulative effort across the group to innovate in every aspect of production. Across the globe, we continue to encourage blue-sky thinking that will increase efficiency, improve costs and reduce the impact our business has on the environment."
5 Jul. 2011