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.
MillerCoors’ Focus Turns to Struggling Miller Lite
Charged with that task is MillerCoors CEO Tom Long, who took the helm six months ago. According to the Wall Street Journal, Miller Lite represents about a quarter of the company's total volume of 50.3 million barrels as of Sept. 30. Its market-share losses have accelerated in recent months and the brand has less than half the market share of Anheuser's Bud Light, the country's top-selling beer. Fast-growing Coors Light became an in-house rival after SABMiller plc and Molson Coors Brewing Co. formed the MillerCoors joint venture in 2008.
Even with Miller Lite's troubles, profit at MillerCoors has climbed each year as the combined company cut costs and raised prices on many of its beers in response to higher commodity expenses. Long told the WSJ that the three-year-old joint venture will book a record profit in 2011.
He explained that Coors has benefited the most from the combined distribution of the new company. "There were much bigger distribution gaps in Coors. Miller Lite is a little bit victimized by our significant success in Coors Light, but that's no excuse. We've got a job to do on Miller Lite," he said.
Part of that job includes going to its distributors this coming March with new advertising and packaging. In addition, the company is debuting a new Miller Lite taste-flow can in late spring, according to the report.
MillerCoors is also working on separating Coors and Miller Lite in retailer's coolers, Long said, explaining that retailers and the company sell more when there are separated. "Sameness kills value in all marketing. What [we] want to do is create separateness and give those brands bigger, clearer identities," he said.
Beer, in general, has been losing ground to other alcohol beverages such as wine and hard liquor. Part of the problem is that the Millennials drink different products for different occasions. "You've also got some changes in drinking patterns, for instance the decline in carbonated soft drinks. Still, drinks are more important and that's why we see a rise in the consumption of ales in the U.S., because ales are less carbonated," Long said.
MillerCoors also needs to contend with the rise of the craft beer segment. According to Long, the company currently has the single-biggest craft beer (Blue Moon) and the fourth largest (Leinenkugel's). In addition, the company's craft business division, Tenth and Black, plans to grow about 60 percent over the next three years.
"If we can play really hard in the fastest sector right now, which is craft, which we are doing, and we can do well with Miller Lite, Coors Light and Miller 64, then our company will do quite well," said Long.
20 Dec. 2011