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.
Japanese brewers’ thirst for highly fancied Sabeco
Representatives from the two beer makers last week separately met leaders of Ministry of Industry and Trade (MoIT) to look at investment in their local counterpart.
“Kirin said it wanted to become a strategic partner of Sabeco, while Asahi expressed a desire to become a stakeholder of Sabeco,” said Phan Chi Dung, director of MoIT’s Light Industry Department, who attended the meetings with both brewers.
Sabeco, which is under the MoIT management, is one of the largest beer producers in Vietnam. The firm last week reported total revenue of around $1 billion in 2011, up 13 per cent against 2010.
But Dung said it was too early to say whether Kirin and Asahi would invest in the local Sabeco beer-maker, adding that the potential investors would now have to submit specific investment plans to the MoIT for further discussion.
The moves of both Kirin and Asahi – the two largest brewers in Japan – follow recent announcements of their plans to expand into South East Asia, including Vietnam, by acquiring stakes at existing local breweries. Three years ago, Asahi had plans to acquire a 10 per cent stake in Sabeco, but the deal never came to fruition.
Kirin last year listed Vietnam among the top 25 beer-consuming markets in the world. In 2010, the country was ranked as the 15th biggest beer producing nation in the world, with 15.2 per cent growth against 2009.
The MoIT forecasts demand for beer in Vietnam will rise to 5.8 million kilolitres by 2020 from 2.6 million kilolitres in 2010.
Growing beer consumption in Vietnam has attracted the attention of many foreign brewers. Another Japanese beer maker, Sapporo Holdings, late last year started production of its international strategic Sapporo Premium product at its first factory in southern Long An province.
Yoshiyuki Mochida, president of Sapporo International, said the firm may decide to open a second factory in Hanoi in 2014 as consumption in Vietnam is forecast to overtake that in Japan by 2020 if current trends continue.
Singapore’s Asia-Pacific Breweries Ltd announced in May 2011 that it would increase production capacity at its brewery in Ho Chi Minh City from 2.8 million hectolitres to 4.2 million hectolitres to further strengthen its position and sharpen its competitive edge in Vietnam.
19 Jan. 2012