The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
Price hikes spell AB InBev Q3 hit, Carlsberg miss
AB InBev, the world's biggest brewer and maker of Budweiser, Stella Artois and Beck's persuaded increasingly affluent Brazilians to drink higher priced beer and U.S. drinkers to stick with or shift to premium brands despite an economic slowdown.
By contrast, Carlsberg, the world No. 4 and producer of Baltika and Tuborg, suffered a double whammy in Russia of lower volumes and higher costs, but maintained its full-year profit outlook, against some expectations of a downgrade, sending its battered shares sharply higher.
Belgium-based AB InBev said on Wednesday third-quarter core profit (earnings before interest, tax, depreciation and amortization) rose 5.5 percent on a like-for-like basis to $3.97 billion, against a market expectation of $3.88 billion.
Total volumes of beer and other drinks fell by 0.2 percent on a like-for-like basis, but revenue grew by 3.6 percent.
The brewer, which makes around 80 percent of its profit from North and South America, said it expects volumes to gain momentum in the fourth quarter, particularly because of relatively weak year-earlier levels in Brazil, with increases in global commodity costs mitigated by forward hedging.
It raised U.S. beer prices by an average 3 percent at the start of October and Chief Financial Officer Felipe Dutra said prices appeared to have little impact on volumes, while Brazilian demand continues to grow even as prices rise.
Dutra added that Brazilian volumes are expected to increase significantly next year when the minimum wage is set go up by 14 percent in a market where the group has a near-70 percent share.
At the Copenhagen-based brewer, third-quarter operating profit fell by 21 percent, steeper than expected, hurt by tax-driven price hikes that shrank the Russian beer market by 7 percent and more costly barley imports enforced by last year's poor harvest there.
The year-on-year comparison was made even worse because Russia -- Carlsberg's biggest market accounting for 40 percent of group profits -- was hit by a heat wave in summer 2010, the cause of the poor harvest but a firm boost for beer consumption.
Russia is set to raise duty on beer again in 2012. Carlsberg said it was increasing prices this month and expected wholesalers and distributors to build stocks in the final quarter, helping it to maintain its 2011 outlook.
Carlsberg CEO Jorgen Buhl Rasmussen told a conference call that price competition was intensifying in Russia, but that he expected the market to grow modestly next year.
Carlsberg shares were up 3.2 percent at 1330 GMT, having hit a two-month high, AB InBev's struck a five-month high and were 1.6 percent higher. The STOXX 600 European food and beverage index .SX3P was 0.4 percent weaker.
"It's largely down to expectations," said Andrew Holland, analyst at Societe Generale. "Carlsberg held their guidance and said what they need to do in Q4 to hit that target."
Carlsberg shares are still down 33 percent this year, while AB InBev's are only 4 percent weaker.
The world's top four brewers -- including also SABMiller (SAB.L) and Heineken (HEIN.AS) -- have all sought growth in emerging markets, while trying to persuade drinkers in stagnant or declining U.S. and European markets, to pay more.
In October, Heineken reported a surprise increase in volumes and revenues, helped by a rebound in Russia and stronger African markets.
The same month, SABMiller, which reports full first-half results on November 17, said beer volumes were up 3 percent in the six months to the end of September, driven by Latin America, but below expectations due to poor performances in Europe and China.
5 Dec. 2011