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.
Cider Seen as Next ‘Craft’ Brew as Sales Climb 25% This Year
Cider is still a tiny fraction of the alcohol category and is not about to threaten beer, wine or spirits for booze dominance. But while mainstream beer brands are declining, cider is growing at a furious pace, drawing premium prices, coveted women drinkers and even more male fans attracted to bold flavors. Category sales were up 25% in the year ending Oct. 30, to $49.6 million, according to SymphonyIRI, which tracks grocery sales excluding those at Walmart and liquor stores.
But curiously, it's a trend the big boys seem to be missing, at least for the moment. Brewing giants MillerCoors and Anheuser-Busch InBev do not have cider brands in the U.S., although both seem to be keeping a watchful eye on the category. AB InBev, for instance, launched a cider brand in the U.K. earlier this year called Stella Artois Cidre (pronounced "see-dra") that would seem to be a logical brand extension for Stella in the U.S. SABMiller, which owns 58% of U.S.-based MillerCoors, sells only one cider, a brand called Sarita, in South Africa. Cider is "a category we're watching with interest," said a MillerCoors spokesman.
For now, the biggest stateside cider player is a privately held company operating out of tiny Middlebury, Vt., called Vermont Hard Cider Co. The marketer said it controls an estimated 60% of the cider market with several brands, including category leader Woodchuck, which has a 47% share and whose sales grew 37%, to $23.5 million in the 52 weeks ending Oct. 30, according to SymphonyIRI. The company also has the No. 4 brand, Wyder's, and imports two brands owned by Heineken International: Strongbow (No. 3) and Woodpecker (No. 15).
Just like craft beer, hard-cider brands rely on grass-roots marketing that draws consumers seeking new taste experiences, natural ingredients and authentic brand stories. And while cider used to skew to women, more men are drinking it. Vermont Hard Cider says its customer base is now 50% male, with the average drinker between the ages of 21 and 30.
"People used to feel it was just a sweet product. Now it's a lot more complex," said Vermont Hard Cider President-CEO Bret Williams. "We're doing new things and pushing the envelope, and that's bringing in the men." Woodchuck's latest offering, Farmhouse Select Series, is made from Vermont apples and premium Belgian beer yeast. And just like craft beer, it is plugged as a perfect food pairing with cheeses and pork dishes.
The biggest U.S. brewer in the category is craft-beer pioneer Boston Beer Co., maker of Sam Adams, which sells a cider brand called Hardcore, whose sales jumped 21% in the year ending Oct. 30, and a new offering named Angry Orchard. Meantime, European cider giant C&C Group is upping its U.S. game, and recently bought the No. 2-ranked Hornsby's brand from E. & J. Gallo Winery. C&C plans to use Hornsby's strong West Coast distribution to grow its Irish import Magners, whose base is on the East Coast, said spokesman Robert Ballantyne.
Hard cider's U.S. heritage goes as far back as John Adams, who was said to down a tankard every morning to prevent gas. But in the modern era, cider has never broken through in the mass market. While growing fast, it still accounts for only 0.2% of the combined beer and cider market in the U.S., compared with 17% in the U.K. and 12% in Ireland, Nomura Equity Research stated in a recent report.
So why would global brewers even consider moving into such a small category? For one, cider has good margins. It is priced at an average of $35 a case, more than other premium offerings, such as $33 for craft beer and $29 for imported beer, according to Nomura. Also, cider attracts women drinkers. "Whereas 80% of beer companies' consumers are male, cider is gender-neutral, opening up a market in which beer players have struggled," Nomura said.
29 Nov. 2011