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.
Rihanna to Help Sell Budweiser to Brazil as AB Inbev Aims for Margin Boost
Budweiser, which was introduced in Brazil on Aug. 31, will be promoted at the venues with displays featuring the brand’s bow-tie shaped emblem, and advertised with the slogan “Great Times Are Coming,” Chris Burggraeve, AB InBev’s chief marketing officer, said in an interview in New York. He declined to comment on the amount spent introducing the brand.
AB InBev is aiming to increase its dominance in a country where it already controls about 70 percent of the market with the cheaper Skol and Brahma brands. So-called premium beers represent only 5 percent of the Brazilian market, according to AB InBev, compared with an average of 13 percent globally. Budweiser will appeal to consumers who are prepared to pay more to try beers from different countries, Burggraeve said.
“Many Brazilians have never been abroad,” he said. “We’re bringing abroad to them. They’re hungry for the world.”
AB InBev will also promote Budweiser through sponsorship of music events including concerts by singer Rihanna, and will work with so-called “Buddies,” well-known Brazilians, to help raise awareness of the brand, according to Burggraeve.
Budweiser is priced about 15 percent higher than Skol and Brahma and may appeal to drinkers who have higher disposable incomes as the local economy grows. Brazil’s gross domestic product is forecast to expand 3.8 percent in 2012 compared with 2.2 percent in the U.S., according to Bloomberg data.
Burggraeve said there’s “no crisis” in the country, where AB InBev sold 2.6 percent less beer in the second quarter because of weaker growth in disposable incomes and the strength of a comparable period that included the soccer World Cup.
Planned minimum wage increases will lead to faster growth in consumer confidence, while the 2014 World Cup, which is being played in Brazil and will count Budweiser among its sponsors, should provide a further boost to the economy, he said.
A booming population and relatively low consumption rates may also spur beer sales in the Latin American country. The quantity of beer consumed in Brazil was about 65 liters per unit of population in 2010, AB InBev said, citing data from research company Plato Logic, compared with about 146 liters in the Czech Republic, the highest beer consumption in the world.
Growth in more-profitable premium beers won’t come at the expense of brands such as Skol and Brahma, said Burggraeve, though he expects Skol drinkers in particular -- and customers of its competitors -- to “trade up” and try Budweiser.
“The premium market is one that we can, and will, shape,” he said, declining to comment on the company’s targets for volume growth or market share growth.
AB InBev, which will open a new brewery in Pernambuco, northeast Brazil, in the fourth quarter of this year, plans to spend about $3.1 billion this year on expansion in “key growth markets” including Brazil and China, the company said in August. It started selling Budweiser in Russia last year, and the brand now has about 1 percent of the local market.
AB InBev aims to make Budweiser the “first and only true global beer brand,” Burggraeve said.
23 Sep. 2011