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.
The Czechs and their beer
What is the connection between this huge beer consumption and the national identity of Czechs?
First of all, it has to do with tradition. In the Czech Republic, beer is even cheaper than water because it is taxed at a low rate.
Journalist Evan Rail has lived for more than 10 years in Prague and wrote the 2007 book called “Good Beer Guide – Prague and the Czech Republic.”
For research, he tasted 20 to 30 types of beer per day and said: “The best Czech beer is Kotska de Sitka, which is brewed at Kotnashymavia. It tastes really hoppy, aromatic and fresh – and it is malty, sweet and filling. Just a wonderful beer!”
Rail meets friends at pub Pivovarsky Klub in Prague for draught beer, including Pilsener Urquell, a blonde lager that most Czechs favor. One recent trend is microbreweries.
The Czech Republic has more than 100 microbreweries, many of them were established only in last few years. Some even brew in pubs.
The reason for the increase, said Marek Kozvera of the microbrewery near the Strahov Monastery, is the desire for quality: “I think a reason for the success of microbreweries is the recollection of quality. Not quantity, but decisive quality. Now the Czechs care more about original products.”
One of the oldest breweries in Czech Republic is U Fleku, founded in 1499 and the only one to work during the communist era. Guided tours are still given there several times a day in English, Czech or German.
Jan Schmidt, one of the brewers, said: “Everything we brew we drink here at the restaurant. We produce about 2,500 hectoliters per year. And we brew only one sort of beer: dark lager. It takes almost three months to get the beer ready for drinking.”
In 1762, Jakub Flekovski took over the brewery and because his name was too long, he got the nickname Flek.
Every year in Prague a beer festival takes place that was established in 2007 by Jan H?bner: “Beer is the most popular product of the Czech Republic and at our beer festival we use these popularity.”
In the Czech Republic there are a lot of small festivals in small villages.
At the main beer festival in Prague, there is a huge variety of different sorts of beer and also a large music and entertainment program.
The three best-known Czech beer sorts are Pilsener Urquell, Staropramen and Budweiser.
But if you want to test something new you have to visit Pivovarsky dum in Prague.
It is popular with many tourists, because you get really unusual beer here: banana beer, coffee beer, cherry beer and even stinging nettle beer.
Owner Jan Suran said: “For marketing reasons it is better to make something special.”
In analyzing Czech beer dominance, journalist Rail explained: “The most expensive and most aromatic hops are Czech Saaz hops. Besides they have really soft water, so-called ‘baby water.’ That makes the difference. When you drink a pint you drink more than half a liter of liquid.”
Czech beer is popular in Ukraine, too.
In the mind of many Ukrainians, the number one brand is Staropramen, brewed in Kharkiv and Chernihiv by Sun InBev Ukraine.
According to Journal.Beer, a Kharkiv-based publication covering Ukrainian and Russian beer markets, Staropramen became the most accessible licensed brand in Ukraine, mainly due to its reasonable pricing and successful advertising campaign, promoting its softness in a series of videos set in picturesque old Prague settings.
Another licensed Czech beer brand is Velkopopovicky Kozel produced in Donetsk by Miller Brands Ukraine, a subsidiary of SABMiller, which occupies the premium segment, and, according Journal.Beer experts, is the only brand to threaten the Staropramen monopoly for Ukraine-produced, licensed Czech beer.
According to Valentin Boinitsky, Corporate Affairs Manager of Miller Brands Ukraine, the niche for Czech beer in Ukraine is not huge – up to about 3 percent of the total volume of the beer market, valued by Journal.Beer at nearly $3 billion annually.
He adds, however, that it is one of the most prominent “national niches” in terms of positioning beer brands.
“Some brewers even produce pseudo-Czech brands, that mimic the Czech beer in label design and naming, but apart from that have hardly any relation to any real Czech brand,” Boinitsky said.
When it comes to the imported beer that Ukrainians drink on tap at the restaurants, arguably number one choice for those who want their draft Czech is Krusovice.
Even though the exact volume of this brand that Ukrainians consume seems to be a closely guarded secret, its brand manager Pavlo Maximov said that the Czech beer school, with its accent on softness and exceptional quality of water, often appeals to Ukrainian bar-goers even more than German beers, with their accented beer taste.
12 Jul. 2011