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.
Japanese beer makers look to Vietnam for growth
Japan's oldest beer maker, Sapporo Holdings, pulled out of China in 2004 and is boosting production in Vietnam. Rivals Asahi Group Holdings and Kirin Holdings have bought Southeast Asian companies to help offset domestic beer sales that have slumped for at least six years.
The brewers are making the fastest-growing major economy, China, a lesser priority because of slowing population growth and strong competition. The Japanese companies' push to tap younger markets in Southeast Asian countries such as Vietnam may boost sales and margins. It also pits them against global brands, including European brewers Heineken and Carlsberg.
Vietnam "has 90 million people whose average age is 28 years and love to guzzle beer," said Yoshiyuki Mochida, who heads Sapporo's international business. "It's an era of the warring states for business in Vietnam. If you fall asleep there, your head will be lopped off."
Vietnam retail beer sales will probably rise 20 percent to $4.6 billion this year, or less than a tenth of China's $57 billion, researcher Euromonitor International estimated. The country's per capita beer consumption trailed China's and was the equivalent of about a third of that in the United States, according to research by Kirin.
But while China accounted for 71 percent of the Asia-Pacific region's beer market by volume last year, it contributed only 16 percent of profit, Heineken Chief Executive Officer Jean Francois van Boxmeer said.
Asahi is looking at Indonesia, Vietnam, Thailand, the Philippines and Malaysia for potential acquisitions, said company President Naoki Izumiya. China's beverage market will take a hit in 2015 by slower population growth from the nation's one-child policy, he said.
Japanese brewers need to look to countries such as Vietnam for growth. The Japanese beer industry's 2010 domestic sales by volume, including lower-malt drinks, is 18 percent lower than a decade ago after sliding for six consecutive years, according to Kirin's research.
"Consumption is tied in with population, and we have to face this fact squarely," Kirin Chief Executive Officer Senji Miyake said.
Kirin has a head start in Southeast Asia, said Akane Nakagawa, an analyst at Mitsubishi UFJ Morgan Stanley. Sapporo, which started beer production in Southeast Asia last month, is next, she said.
While Asahi lags behind the other two, it may benefit from synergies as it integrates Malaysia's nonalcoholic drink maker Permanis, which it acquired in the second half of this year, Nakagawa said.
Southeast Asia offers opportunities because of a relative absence of competition, said Mikihiko Yamato, an analyst at JI Asia. The "best-case scenario" would be for the Japanese companies to buy closely held beverage makers where they can negotiate directly with the owners, he said.
Japanese brewers have found China a tough place to do business because a handful of brands dominate China's beer industry.
"Their market share there can't rise," said Tokushi Yamasaki, an analyst at Daiwa Securities Capital. "Competition is too fierce in China."
China Resources Enterprise, the maker of Snow beer with SABMiller, has a 22 percent share. Tsingtao Brewery, part owned by Asahi, has 14 percent, and Anheuser Busch InBev has 12 percent, according to Euromonitor.
"There are giants in the Chinese beer market, and we have no chance to go it alone," said Kirin's Miyake. "There is still a chance for us in Vietnam, from our market analysis."
27 Dec. 2011