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.
Why Asahi Isn’t Buying Foster’s
On Thursday, Asahi sealed its own biggest-ever deal to buy New Zealand’s Independent Liquor –- for little more than 1/10 of that price.
Back in the 1990s, Asahi had a stake of nearly 20% in Foster’s. With a stake that size, the Japanese company could have been kingmaker in the battle for the latest object of the global brewing business’s desire. Or even launched its own offer.
But frustrated by Foster’s inability to make its targets, not to mention a lack of dividend payments, Asahi sold out of the Australian company in 1997. And in an indirect way, it’s the hangover from that Foster’s deal, first struck in 1990, that shaped Asahi’s future: The company must keep growing overseas to compensate for Japan’s sluggish domestic market — just don’t expect it to risk any mega-deals.
Asahi’s success story with the advent of mega-hit “Super Dry” in 1987 is well-known in Japan, as are ads of international go-getters and corporate achievers downing the brew. But that came after a sales slump in the mid-1980s, when its market share fell to less than 10% at one point. It’s been a long and expensive haul for Asahi to get back into a position where it can challenge local arch-rival Kirin Holdings Inc. for the No. 1 beer-sales spot in Japan’s cut-throat market, with Suntory Holdings Inc. also breathing down its neck.
While Asahi saw the need for investment in overseas operations like Foster’s early enough, with its finances strained by the need to ramp up at home, it couldn’t afford to wait for the returns to start rolling in overseas. Ditto unsuccessful 1990s efforts to profits on China’s red-hot economy.
More than a decade later, Asahi’s position in Japan, and its financial health, is much fortified. But that focus has left it trailing rivals in international sales, something it must address as Japan’s population ages and shrinks. Back to the overseas acquisitions trail, then, but with a difference from giants like SABMiller: It’s not that Asahi doesn’t have money to burn -– it has war chest of $10 billion available for M&A in the period up to fiscal year 2015 -– it’s just that it’s not about to splurge the lot on one big-ticket deal.
Since 2009, Asahi has quietly spent about $2.5 billion buying companies, and Independent Liquor takes its spending so far this year to more than $1.8 billion. These smaller, bolt-on acquisitions are designed to catapult it into the top 10 in the global food and beverages sector by 2015. It is now ranked 13th.
Whether the low-key approach will pay off in the end remains to be seen. Asahi still has a long way to go to bring its overseas sales to 20%-30% of its targeted sales of $26 billion-$32 billion by 2015: In 2010, Asahi’s overseas sales made up a mere 6.6% of overall sales, while Kirin’s overseas sales ratio was 23%.
But Asahi needs to accelerate wherever it can. As the pace of consolidation in the industry heats up, it won’t have escaped the attention of some that at about $10 billion, Asahi’s current market value is about equal to the latest SABMiller offer for Foster’s.
19 Aug. 2011