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.
Heineken sparks beer wars with Nairobi office
The Dutch brewer supplies its Heineken beer in the Kenyan market through local distributor Maxam Ltd, which is associated with businessman Ngugi Kiuna who has held the franchise since 2007.
Heineken, which recently bought breweries in Ethiopia and Rwanda, has now established a regional office in Nairobi that will be headed Koen Morshuis, general manager East Africa — signalling its intention to get a larger share of the East African beer market. This will open a fresh round of beer wars in the region that currently pits South Africa’s SABMiller and Diageo through EABL. “After doing research we saw the results and think it’s time to put people here (Nairobi office) and we shall have a huge marketing push,” Morshuis who moved in Kenya from Vienna where he was Heineken’s marketing manager for central and eastern Europe.
“This office will look at the East African region which includes Kenya, Tanzania, Uganda, Southern Sudan, Ethiopia, Somalia, Djibouti, Madagascar, Comoros, Seychelles and Eritrea.”
He added that the Dutch brewer unlike its rivals will continue to feed the Kenyan market with beer imported from Europe, adding that the brewing giant will continue to work with Maxam in Kenya.
East African market is increasingly becoming a battle zone between SABMiller and Diageo led EABL as both firm’s proactively race to grow their regional footprint. Already, a vicious battle for market dominance is under way in Uganda between Uganda Breweries, owned 98.2 per cent by EABL, and Nile Breweries, which SABMiller owns 60 per cent. In Tanzania, Diageo through EABL ended a partnership with SABMiller over the running of Tanzania Breweries Limited and bought a majority stake in rival Serengeti Breweries last year.
This has set off a vicious market share war between the hitherto business partners as global brewers seeks a larger foothold in emerging markets where beers sales are still on the up.
Heineken’s aggressive African strategy, especially in Anglophone countries, is set to open a fresh round of beer wars in the continent. (READ: Heineken opens new round of beer wars with EABL)
It joins a long list of multinational’s including Airtel, Nestle, Coca Cola that have established their regional headquarters in Kenya.
The number three global brewer, Heineken, has been a late entrant into the African market but is racing to build its stake after clinching share deals in Nigeria, Rwanda, South Africa and Ethiopia in recent months.
Heineken bought Ethiopian Harar and Bedele for $163 million (Sh14.6 billion) mid this year and intends to use the two firms as a gateway to the newly independent South Sudan.
29 Nov. 2011