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.
US. Craft brewers look local for untapped demand
"The idea of leaving sales territories is not ideal, but demand locally is necessitating it," said Paul Gatza of the Brewers Association, a craft-beer trade group in Boulder, Colo.
It's a good problem for Frederick-based Flying Dog Brewery, known for highly-hopped ales with naughty names like Doggy Style and Raging Bitch. Chief Executive Jim Caruso announced in June the company was halting distribution in 13 Southern, Midwestern and Western states to bolster its position in what he called "the new world of craft beer."
The pullback leaves Flying Dog in 33 states -- but probably not for long. In a July interview at the company's brewing plant in an industrial park, Caruso said he aims to shrink distribution further, with a goal of selling 70 percent of Flying Dog's output in Maryland, the District of Columbia and northern Virginia within three years. The region currently accounts for about 50 percent of the 1 million cases Flying Dog sells annually.
"If the market in Frederick were such that we could sell a million cases in Frederick, that would be my strategy," Caruso said.
At the same time, he's considering building a new brewery, three to five times bigger than the current plant. And Caruso figures he can sell virtually all that beer within a few hundred miles of home.
Brewers like Flying Dog are betting on local growth because there are so many drinkers left to convert. Craft breweries -- those selling 6 million barrels or less a year -- accounted for just 5 percent of the 204 million barrels of beer sold in the United States last year, according to the Brewers Association. A barrel holds 13.8 cases of beer.
And craft beer's growth is heady. Sales rose 11 percent by volume in 2010, at a time when overall beer sales slipped 1 percent, the association said.
Demand is so strong that craft brewers who've spread themselves too thin must ration their beer -- supply some distributors and leave others short.
That can get annoying for tavern owners like Kathy Reeder. Her Hempen Hill BBQ in Hagerstown, Md., has a Starr Hill Brewery sign in its front window, but she had none of the Virginia-made beer on tap one recent July night.
She said occasional shortages are acceptable; they can even heighten a brand's mystique. And she wants to support regional craft brewers. But she can't let a tap sit idle too long.
"Sometimes we need to move on to other products," she said.
And there are plenty available. The number of craft brewers has mushroomed from eight in 1980 to more than 1,600 last year. Starr Hill, founded in 1999 in Charlottesville, has at least three newer competitors in northern Virginia alone.
Starr Hill founder Mark Thompson said he'd like to expand production but there's a long waiting list for necessary equipment, such as brewing kettles and fermenting tanks.
"We only have a certain amount of brewing capacity," he said. "We are all evaluating reducing the footprint we have and selling more in our local market. And that's considered a strength, not a weakness."
Pulling back also saves on shipping costs. Brewers and distributors sometimes swallow part of the transportation costs, but the brewers say they mostly suffer because shipping to far-flung states increases the price of the beer to consumers, making their beer less competitive in distant markets.
Eighteen-year-old New Glarus Brewing Co. of New Glarus, Wis., has thrived by selling beer only in its home state since the late 1990s. The company's slogan: "Drink indigenous."
"The idea of continually expanding your footprint and then pretending you're growing your business, I just don't see it," said Deb Carey, the company's president. "How can you say you're growing your business if all you're doing is expanding your territory?"
With annual production exceeding 100,000 barrels and sales running 20 percent above last year, Carey said she's more interested in making good beer and improving the lives of her 60 workers than in shipping beer cross-country.
"As a craft brewer, my goal is to be part of the fabric of Wisconsin, which is my home state and a place I love," she said.
Benj Stein, editor of brewing industry trade journal Beer Marketers' Insights, said craft brewing kingpin Boston Beer Co., maker of Samuel Adams, doesn't need to pull back because it's so well-established nationally. And Stein said big international brewers like Anheuser-Busch InBev NV and SABMiller PLC, aren't losing much to craft brewers because they're a relatively tiny part of the overall industry.
He said the fight among small craft brewers for local sales will produce some winners and losers, with the victors eventually expanding their reach once again.
"Wide distribution -- ultimately, I think that would be the preference over time," Stein said.
And even as they strive to become known as your friendly or funky or edgy local brewery, craft brewers know that selling into their backyard is just good business, said Starr Hill's Thompson.
"At the end of the day, we all like to sell beer and make money," he said. "This is not a hobby for me."
3 Aug. 2011