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.
SABMiller Says Modelo, Heineken Thwart Mexico Beer Choice
By Crayton Harrison and Brendan Case - Mar 2, 2012 11:31 PM GMT+0200 .LinkedIn Google +1 Print QUEUEQ..Grupo Modelo SAB (GMODELOC) and Heineken NV (HEIA) are blocking consumer choice in Mexico, the world’s sixth-biggest beer market, with inducements to businesses to thwart rival brewers, SABMiller Plc (SAB) said.
Modelo, maker of Corona beer, and Dos Equis producer Heineken offer loans, upfront payments and refrigerators to restaurants and retailers that agree not to serve other brands, said Armando Valenzuela, the head of SABMiller’s Mexico unit.
The practice is the focus of SABMiller’s 2010 antitrust complaint against Mexico’s two largest brewers, the second time the London-based company has formally accused them of blocking competition. Mexico’s antitrust agency decided Feb. 14 to extend an inquiry into the complaint for 120 business days after grouping it with other cases filed by undisclosed parties.
“We haven’t been able to sell to clients because they’re exclusive with one or the other,” Valenzuela said in an interview at Bloomberg’s Mexico City office. “What we’re seeking is access to the market that we don’t have now.”
Mexico’s beer market is a prize for brewers because it’s still growing while U.S. and European consumption stagnates. Volumes will rise 2.9 percent a year to 73 million hectoliters (1.9 billion gallons) in 2015, according to research firm Plato Logic Ltd. in London.
Cuauhtemoc Moctezuma, the Mexican unit of Amsterdam-based Heineken, said it strictly observes the country’s competition law. Actions that restrict competitors from entering a market can only be punished if they are found to hurt competition more than they enhance it, the company said in an e-mail.
“We’re in a permanent battle with our competition for the conquest of each customer and each client that sells our products,” Cuauhtemoc Moctezuma said.
Jennifer Shelley, a spokeswoman for Mexico City-based Modelo, declined to comment.
Modelo fell 0.4 percent to 83.62 pesos at the close in Mexico City. Heineken slid 0.7 percent to 39.60 euros in Amsterdam, and SABMiller was little changed at 2,583 pence in London.
SABMiller is the world’s second-largest brewer. No. 1 Anheuser-Busch InBev NV (ABI), which is based in Leuven, Belgium, sells brands such as Budweiser in Mexico and has a 50 percent, non-controlling stake in Modelo.
SABMiller has found a niche in some cities near the U.S. border and in retailers such as Wal-Mart Stores Inc. (WMT)’s Mexican unit. That hasn’t been enough to challenge Modelo and Heineken, whose combined market share exceeds 90 percent, according to Lauren Torres, an analyst at HSBC Holdings Plc in New York.
“Mexico’s been one of those markets where the doors are technically open to foreign competition,” Torres said in a phone interview. “But because of the heritage and the history and relationships, it’s incredibly hard to make any inroads and have any notable business there when you have these very strong players fending off competition.”
Torres has a “neutral” rating on SABMiller, Modelo and Heineken.
Heineken entered the Mexican market by buying Fomento Economico Mexicano SAB’s brewing unit in 2010 in a transaction that Femsa valued at $7.35 billion when it was announced.
SABMiller has been selling in Mexico for two decades with brands that include Miller Lite, MGD and Miller High Life. The company almost succeeded in striking a blow against exclusivity deals in 2006, when the antitrust agency ordered Modelo to drop such contracts.
Modelo appealed the ruling, and regulators reversed course later that year, dropping the case after concluding that the original decision should have evaluated the market for all low- alcohol-content beverages and not just beer.
Eduardo Perez Motta, Mexico’s antitrust chief, said in a 2006 interview that while exclusive deals aren’t prohibited by law, they’re banned when “done to displace competitors.” He said at the time that regulators would pay “close attention” to the beer industry.
An antitrust official who can’t be identified under the agency’s policy declined to comment this week because the probe into SABMiller’s current complaint is in progress.
“We’re seeking for the Mexican consumer to be able to choose his beer brand, whether it be domestic or imported,” Valenzuela said. “Many consumer categories already offer a choice in Mexico, but beer doesn’t.”
7 Mar. 2012