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.
As new report shows value of beer to the Irish economy, Irish Brewers Association calls for 10 per cent excise cut
The Association said that despite this decline in market share, the beer sector continues to contribute significantly to the Irish economy, through the 45,000 jobs that are maintained in the brewing, distribution and sale of beer, and the over €1 billion in revenue generated for the State from beer sales.
It is also crucial to Ireland’s local manufacturing and agricultural sectors, while contributing greatly to the purchase of utilities from local authorities.
The IBA said that this contribution was highlighted in a new pan-European report by Ernst and Young/Brewers of Europe, The Contribution made by Beer to the European Economy**, which, in the section on Ireland, shows that:
· Irish breweries produced 8.249 million hectolitres of beer in 2010, slightly less than in 2008 (8.846 million hectolitres), but a marginal recovery on 2009 (8.041 million hectolitres).
· Consumption was relatively stable following a period of decline. The annual consumption per capita was approximately 90 litres in 2010.
· Beer is Ireland’s favourite alcoholic beverage. Most beer is consumed in pubs and restaurants. Around 66% of total beer sales is sold in the on-trade.
· Direct employment in the Irish brewing sector is 1,441 jobs. Employment in supplying sectors arising from beer production and sales is estimated at 5,880 jobs. The induced employment in hospitality is around 35,700 jobs while a little over 1,500 jobs in the retail sector can be attributed to beer sales. Total employment in Ireland due to beer production and sales is thus 44,540 jobs.
· Ireland has one of the highest excise duty rates on beer in Europe. Government revenues are estimated to be 1.134 million euro comprising 320 million euro excise, 524 million euro VAT and 290 million euro in income-related contributions and taxes.
Stephen Lynam, Senior Executive of the IBA, commented, “As this report shows, beer is the most important product for the Irish pub. It accounts for approximately half of all alcohol sold in Ireland. This means that the sale of beer is vital to sustaining Ireland’s pubs and wider hospitality sector which continue to be central to the economy and overall employment levels.
“In the tough economic climate, it is important to boost this sector in line with the Government’s reduction in the lower rate of VAT earlier this year.
“To support this, the Irish Brewers Association is a calling for a 10% reduction in excise duty on beer that will help boost the sector and sustain jobs at a time when the market is declining. We look forward to engaging with the Government on this in advance of the December Budget.”
17 Oct. 2011