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.
UK tax cut for low-alcohol beer will have no major impact on industry, Euromonitor
In March, the UK government made a decision to introduce a 50 per cent reduction of duty on beers at or below 2.8 per cent ABV from October 2011.
Potential new launches
Euromonitor alcoholic drinks company analyst, Zsuzsa Szilagyi told BeverageDaily.com that there might be some new products in the category to take advantage of the tax relief, with rumours that Heineken is considering the launch of a low alcohol lager.
Guinness also plans to launch a lower alcoholic beer of 2.8 per cent in the UK, the analyst told this publication.
However, as 4-5 per cent ABV lagers made up most of beer consumption, the tax cut is unlikely to have a big impact on the overall market, said Szilagyi.
The analyst said the tax reduction could help companies to increase margins if the products were sold at a significantly lower price.
Szilagyi said the main problem was that the UK beer market was a mature market where consumption was declining, with a shift from on-trade to off-trade consumption.
“Major companies are trying to change their focus from volume to value generation and focus on their core brands,” said Szilagyi.
“The tax increase obviously hit the markets hard, especially pubs, and other on-trade channels, and the market is still adjusting to the new regulations, but a significant shift to low ABV beer is not likely in the short term,” said the analyst.
However, the Beer and Pub Association (BBPA) said the changes could offer a boost for the lower alcohol sector if it was supplied with sufficient investment.
“We think this will be a useful tool in developing what is currently a very small part of the UK beer market,” Andy Tighe director of brewing at the BBPA told this publication.
“It will create more choice for consumers. It may encourage some drinkers to shift from higher strength beers on certain occasions,” he said.
To really stimulate investment and growth this category the BBPA said it is seeking an increase in the 2.8 per cent ABV threshold for reduced duty rate to 3.5 per cent ABV.
"Whilst this has the support of UK Government it requires a change in EU law," said Tighe.
The Campaign for Real Ale also welcomed the decision saying that the introduction of low strength beers in pubs could be a huge boost to the licensed trade.
CAMRA claims its new research shows that half of regular pub goers would like to see more pubs selling a low strength beer option.
This is due to factors such as the ability to help regulate drinking levels, their more refreshing taste, lower calorie content, and lower cost, said the CAMRA.
UK brewer Fullers said it was looking into the possibility of producing a 2.8 per cent beer, but only if the product's taste was not affected.
However, this is no easy feat, Fuller's Head Brewer John Keeling told BeverageDaily.com.
This is because the alcohol content comes from the malt. Therefore the more you use, the more alcohol content you have, he said.
The malt also gives the beer flavour, he explained. But the problem is, if you want to brew a lower alcohol content beer, you can't use lots of malt, he added.
Keeling said the firm's move towards a lower ABV beer was mainly down to customer feedback, people wanting different strength drinks at different times of the day.
10 Aug. 2011