The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
Krombacher: a brand built on purity
Felsquellwasser. It is not directly translatable but roughly speaking it means natural spring water and it is the base that Germany’s best selling lager is built upon.
Water of course is not only vital for the brewing process but in Krombacher’s case, the source also forms a major part of the brand’s marketing activity. Consumers tend to guess that the beautiful Krombacher lake is somewhere in New Zealand — but it is in fact in Germany — and the family brewer believes it perfectly displays the purity of the brand.
Krombacher is the number one Pils in Germany and the brewery, owned by the Schadeberg family, puts its success down to a “high level of consistency” and “sustainability”, which marketing director Uwe Reihs says is “deeply rooted in the German DNA of the brand”.
He says its brand leadership is “about high quality not only in pure definition of quality of product but in execution of marketing and distribution”.
Krombacher is keen to stress its heritage and the fact that it is so consistent. Reihs considers that if Krombacher was a car, it would be the reliable but high quality Volkswagon rather than something of high fashion like a Mercedes Benz.
It claims to not be influenced by other competitors. “Our brand philosophy is strictly inside, we really don’t look outside. We do not follow anyone. We are not influenced by anyone else.”
Krombacher has a strong focus on its homeland before international markets. “We are strictly focused on Germany and then we play abroad where it is a high quality niche,” says Reihs.
The German beer market is on a downward trend but is also highly regional. There are 16 regions all with their own breweries and styles with 1,344 breweries and 700 of those in Bavaria. Even in Cologne alone there are 25 different Kolsches.
Krombacher is now trying to crack Southern German market, with its own Weizen wheat beer. It is a hard ask convincing bavraians to drink a wheat beer from outside the region — and marketing will play a key role in convincing them to do so. Former German footballer Mehmet Scholl is fronting its campaign.
Krombacher has diversified from its main Pils brand to include several variants including non alcoholic beer (0.5%abv) and shandy. Its non-alcoholic beer has also been in double digit growth over the past few years. “Our source for growth is people who order soft drinks,” says Reihs. “If I can do sports I can drink this before after during. So we do huge samplings at sports events and marathons.”
The problem in bringing such a drink to the UK is that it can not be called alcohol free here because of its 0.5% abv.
But the traditionally inward looking brewery is now investigating the markets abroad and is targeting areas where Germans would traditionally go on holiday — Spain, Italy, Russia, US, Canada, and now UK.
The brand is currently stocked in around 150 outlets with Krombacher targeting the premium segment of the market for expansion. It intends to launch a support package to help licensees train their own teams in how to serve Krombacher with “flair and grace”.
As part of its marketing for the year, Krombacher will be showcasing its Pils, Weizen (wheat beer) and Dark lager products at the Publican’s Morning Advertiser Great British Pub Awards in September (Krombacher's UK strategy).
“Krombacher beer is in substantial growth, albeit from a historic low base,” says UK sales and marketing representative Julian Penny.
“Our plan is to continue a targeted growth strategy supporting the premium position that the beer has in Germany.
“As the world-beer category continues to grow, we aim to tap into the interest shown by consumers by offering our partners and stockists a truly authentic world beer that is both brewed and number one in its home market.”
The brewer is also now focusing on sustainability and has just produced its first sustainability report with a plan to reduce its carbon footprint over the next five years. The sustainability report aims to build upon the success of its Rainforest campaign launched in 2002 where for every crate of Krombacher sold one square meter of rainforest would be saved for at least 100 years.
Krombacher Radler (shandy)
Krombacher Weizen (wheat beer)
Cab (beer and cola drink)
Krombacher Alcohol Free
28 Jul. 2011