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.
Zimbabwe’s beer market poised for growth, says Renaissance
"Zimbabwe is a beer drinking nation,” noted the investment bank in a recent report.
According to Renaissance, Zimbabweans currently consume an average of 14 litres of beer per person a year. This is more than the Sub-Saharan Africa average of 10 litres, but “well below what we view as its potential level”.
Renaissance expects that economic growth as well as improved affordability, branding, marketing and distribution will boost the demand for beverages in Zimbabwe.
Delta is benefiting from the dollarisation of the Zimbabwean economy. “In 2010, the first full year in a dollarised environment, volume growth was 100%. Dollarisation also catalysed recovery in disposable incomes and this growth sustained the upward trend in demand,” notes the report.
Delta is Zimbabwe’s largest brewer and soft drinks bottler. The company’s brands include Castle Lager, Eagle, Lion Lager, Carling Black Label, Golden Pilsener and Bohlinger’s. Its soft drinks portfolio includes a range of Coca-Cola brands and it also manufactures Chibuku, the market leader in the traditional sorghum beer category. SABMiller, the world’s second-largest brewer by volume, holds a 36% stake in the company.
Compared to many other African countries, Zimbabwe’s informal sector for alcohol is relatively small. According to the World Health Organisation, 68% of alcohol consumption in Zimbabwe is not classified as commercial beer, wine or spirits. Therefore it most likely comprises home-brewed beer. This figure is relatively low compared with other countries such as Nigeria (94%) and Tanzania (86%). Renaissance says this can be explained by the availability of low-cost brands such as Chibuku and Eagle.
“Informal markets for traditional beer used to be more sizeable in farming and mining areas (where mines operated their own beer halls), but the collapse of commercial agriculture together with the decline in mining activity saw most of this fall away. We expect that some of the informal has moved to commercial sorghum beer or cheap lagers,” explains the report.
Renaissance says it expects higher consumer spending as the country emerges from a decade of economic decline. “We have already witnessed increased spend following recovery in small-scale farming (cotton and tobacco) and some mining. We expect firm prices for cash crops and minerals will continue to encourage production, resulting in increased spend in farming and mining areas.”
Recent civil servant wage increases could also have a positive effect on consumer spending.
7 Sep. 2011