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.
China. Tsingtao Brewery Fails To Acquire Xihu Beer
The parent of Xihu Beer, Asahi Breweries Itochu (Holdings), had in November last year, entrusted the management of its 55 percent stake in Xihu Beer to Tsingtao Brewery.
Following the entrustment, China Resources Breweries purchased a 45 percent stake in Xihu Beer and 16 related brands for 268 million yuan at end November last year.
In addition to gaining full control of Xihu Beer, China Resources Breweries acquired the entire equity of Huzhou Beer after purchasing a 25 percent stake in the brewer for 30 million yuan. The remaining shareholding of Huzhou Beer is held by Xihu Beer.
The acquisition will bring the total number of production bases owned by China Resources Breweries in Zhejiang province to eight.
Apart from this failure, the world's leading brewer AB Inbev had triumphed in the bidding war with Tsingtao Brewery for Henan Weixue Beer.
According to an analyst with Haitong Securities (600837), Zhao Yong, focusing on the mid to low-end beer market is crucial in the battle for market share as the room for growth in the mid to high-end beer market is limited. However, Tsingtao Brewery had been focusing its resources in the mid to high-end market.
Sales of Tsingtao Brewery’s major brands accounted for 60 percent of its total sales in the first quarter of 2011, up from 39 percent in 2008.
One of the main reasons for Tsingtao Brewery's lower than expected growth in its market share in recent years was that the sales growth of its three low-end brands were not up to expectations, added an industry analyst.
According to the company secretary of Tsingtao Brewery, Zhang Ruixiang, the company plans to increase annual sales to 10 million tons in three years, and had just obtained 200,000 tons of beer production capacities in Hangzhou, Zhejiang province, for about 100 million yuan.
Zhang said Tsingtao Brewery has seven billion yuan of cash on hand, and will not give up on its efforts to grow through acquisitions.
The cost of acquisitions had increased as there are not many brewers which meet its criteria of having 100,000 tons of production capacity, said Zhang.
4 Aug. 2011