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4-2017

Global hop market

A 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 Russia

Germany 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.

Diageo completes Ethiopian acquisition

Diageo claims its new acquisition of Meta Abo Brewery in Ethiopia allows it to gain access to a fast-growing market. In beer to complement its existing spirits business.

Meta Brewery is the second largest beer company in Ethiopia with a volume share of approximately 15%. From its brewery near the Ethiopian capital Addis Ababa, it produces and distributes its flagship national lager brands Meta and Meta Premium (pictured).

The US $225m (€176m) cash deal was welcomed by Nick Blazquez, president, Diageo Africa: ““I am delighted that we are able to announce the completion of this acquisition which represents a key milestone in achieving our strategy of participating at scale in beer and spirits in growth markets in Africa.

Meta is a strong national brand that has great heritage in Ethiopia. We will invest behind the long-term growth of the brand, the Meta business, and the wider communities in Ethiopia.

Blazquez said that over the past five years Diageo had invested more than ?1bn (€1.2bn) in building its businesses in Africa, and would continue to “expand our footprint, grow our brands and secure strong routes to market [there]””

According to Access Capital 2011 statistics, the beer market in Ethiopia is estimated to continue to grow at more than 10% per annum to 2015, driven by strong GDP growth and increased disposable incomes.

Diageo currently markets its international spirits brands, including Johnnie Walker Scotch whisky, Smirnoff vodka and Gordon’s gin, through a representative office in Addis Ababa.

Francis Agbonlahor has been appointed MD of the Meta business from immediate effect, in a step that will see him move from Diageo’s business in Nigeria.

13 Jan. 2012

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