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.
Russian beer: crying in their cups
While beer has escaped authorities’ attention until now, a bill signed into law by Medvedev on Wednesday will curb beer sales between 11pm and 8am, and ban it at drinkers’ favourite points of purchase: kiosks, airports and train stations.
The new law will classify beer as alchohol for the first time and pertain to all beverages with an alchohol level above 0.5 per cent.
Though the law won’t take effect until 1 January 2013, it will mark a big change for Russia’s beer market. Currently, about a quarter of Russia’s beer sales take place at kiosks, transport hubs and petrol stations – the soon-to-be-banned points of sale.
The news is a big concern for Carlsberg, which relies on Russia as its biggest single market. Shares in the Danish brewer have fallen 8 per cent since the start of the month when it was announced that parliament was expected to pass the bill.
While the year-and-a-half delay until the law’s implementation will give brewers like Carlsberg and SAB Miller a grace period, it remains to be seen if consumers will be as happy to buy beers from shops as they were to buy them from kiosks, and how producers will make up the 10 per cent of beer sales that currently happen in the wee hours.
Kirill Bolmatov, director for the government relations of SABMiller Russia, told Reuters that he believed the ban would have a “short-lasting effect” before the market evolved to accommodate it.
“The volume sold through kiosks will be redistributed and sold in supermarkets, restaurants, bars and cafes.”
He added: “We understand how drinking beer in the streets irritates people, therefore we do not complain.”
The law marks a 12-year effort by the government to crack down on alcohol, with the strictest measures being enforced in Moscow. Since 1998, the sale of alcoholic beverages has been gradually banned at public spots, like markets and beaches, while last year, the government put a 10pm curfew on the sale of spirits.
The crackdown is not over yet with a planned bill to quadruple the fine for illegal alcohol sales.
But Muscovites can rest easy about one thing. While reports initially said that the 2013 law would pertain to Russians’ beloved kvas - a national soft drink made out of rye, yeast, beet sugar and stale bread, and containing 1.2 percent alcohol – government agencies have since assured consumers that the drink will enjoy exemption.
Good news for Coca Cola at least, which not long ago began producing its own kvas: Krushka & Bochka, which as its tagline notes, is enjoyed by tsars and peasants alike.
21 Jul. 2011