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.
SABMiller summarized the first six months of the current fiscal year. Miller Brands Ukraine has been demonstrating considerable production growth while the market collapses
During the first six months of the current fiscal year, SABMiller world production volume increased by 3% compared with the same period last year. At the same time, sales growth in the second quarter (July-September) has somehow slowed down, not reaching the figures of the same period of last year. In part this is due to colder weather in Europe and China this summer. World-wide sales volume for SABMiller non-alcoholic beverages has increased by 6%. Due to larger sales volumes and rising prices in some markets, during the reporting period SABMiller has increased profits by 6% and income per hectolitre has increased by 3%. Overall, financial and operational results achieved by SABMiller in the first fiscal semester meet the planned criteria.
Here are SABMiller sales dynamics in the regions: Latin America - 8%, Africa - 15%, Asia - 4%. In Europe, beer sales remain at last year's level due to continuing economic instability, which led to further lowering of the economic sentiment index and consumer expenses.
The biggest contribution to the overall sales volume in European markets was made by the British branch of SABMiller - Miller Brands UK, and also by the Ukrainian branch, Miller Brands Ukraine, demonstrating considerable production growth amidst the beer market collapse in the country.
According to production volume data (source: "Ukrpivo"), between January and September 2011 Miller Brands Ukraine production volumes grew from 8.15 mln decalitres to 13.23 mln decalitres of beer (by 62.4%)compared to the same period of last year. At the same time, the total production volume in the Ukrainian market for the same time period dropped by 1.6%.
According to Igor Tikhonov, general manager of Miller Brands Ukraine, "The results achieved during the new reporting period confirm the efficiency of our chosen marketing strategy. Its key principles are as follows: introduction of the most promising brands from SABMiller global portfolio to the local market and development of niche offers, fully satisfying the demand of Ukrainian consumers. It primarily concerns the premium segment and such brands as Miller Genuine Draft, Zolotaya Bochka and Velkopopovicky Kozel. At the same time, I am pleased to report our success in the mainstream segment: the recently launched licensed brand Amsterdam Mariner continues to demonstrate an excellent growth index."
*The fiscal year in Great Britain starts on April 1 and ends on March 31 of the following year.
2 Nov. 2011