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.
Korea’s beer market getting greater diversity
"When I go to a foreign restaurant, I have more opportunities to try foreign beer. I want to try everything, not just beers from one country," she says.
People like Choi probably explain the increasing beer imports to a country that in 2010 gulped down 1.95 billion liters of the beverage.
According to data from Korean customs, imports of beer between 2009 and 2011 increased 64 percent in monetary terms to US$58.4 million last year. The market share of such imports increased from 2.05 percent in 2008 to 2.4 percent in 2010. Industry watchers estimate it reached 4 percent last year.
Local retailers have taken the cue. E-Mart, a local hypermart chain, expanded their selection of beers from 70 brands in 2010 to 200 this year to sell a wide range from countries like Brazil, France and Tibet. Jin Jang-min, a PR associate at E-Mart, says young consumers are driving the demand. "Soju is not so popular because it's too strong," she said, referring to the local rice-based liquor. "Young people like beer because it's softer."
Many foreign beers are now available on tap in pubs and bars as draft beer as well. A growing appreciation for draft beer has been driven by an increased sophistication in taste preferences, according to Gubae Kim, the marketing director of German beer importer Bestbuy and Beverage. "Koreans can now distinguish the taste difference of draft beer," he said.
"We think the imported beer market will grow 10-15 percent this year," Kim said. "There's been an enlightenment, an increased awareness of beer."
Beer production in Korea is mostly limited to large corporate-owned mass market brands. Regulations prohibit microbreweries from distributing their own beer unless they meet strict requirements such as a production capacity of 120,000 liters, which involves large capital investment.
Rob Titley, a consulting brewmaster and the founder of Homebrew Korea, says Korea's beer market is skewed because of such regulations. It has "forced people to make their own or to pay high prices for imported beer," he says.
For entrepreneurs like Sung Lee, the CEO of Brewmasters International, a business opportunity was blazingly clear. He was involved in operating brewpubs in New York. His "epiphany" came when he visited Korea in the summer of 2010. "I went dry for one month. I realized I wanted to change the beer culture," he said.
Yet, getting people to understand beer styles still has its limits, according to Lee.
"I'm trying to bring in something different so different styles of beer are represented in the market," he said. It has been a challenge as many pub proprietors are unfamiliar with beer styles. "Education is a challenge. Getting people to try the beer is the hardest thing."
Others have tied their marketing to Korea's growing interest in foreign cuisine and are honing in on neighborhoods with foreign populations and foreign restaurants like Itaewon and Sinsa-dong in central Seoul.
Espressamente Illy coffee shops will introduce Italian beer to three flagship stores this year. Their goal is to introduce the Italian culture of aperitivo, beer with canapes and cheese plates.
Cooking with beer, while common in American and European restaurant kitchens, is relatively new to Korea. Italian Chef Sebastiano Giangregorio of Exclusivo restaurant in southern Seoul in February created a menu using beer as an ingredient. The dishes included Sicilian "arancini" rice balls cooked in beer batter and beef tenderloin with Peroni beer demi-glace sauce. If the dishes prove popular, he plans to add them to his regular menu.
Beer prices are relatively high in Korea due to government taxation that adds 180 percent to the CIF (cost insurance freight) price of beer. Alberto Mondi, brand manager for Peroni Beer, says this is inevitably reflected in the marketing of foreign beers. "Because the taxes are so high, beer has to be marketed as a premium product. We do a lot of branding to ensure Peroni is sold in the right places," he said.
Despite the high prices, demand is there. "Consumers are willing to pay more for new gastronomic experiences. They care less about price and more about quality," says Mondi.
Importer Sung Lee has noticed a pattern as consumers move to foreign beers. He says, "Most Koreans start with sweeter, fruiter German beers then move onto ales such as IPA (Indian Pale Ale) and brown ales." He hopes that lesser known beer styles such as Saison and Trappist ales will become popular.
If none of the tastes on the market satisfies or if the imports are too expensive for one's pockets, there is always make-it-yourself beer.
Titley sells beer making equipment for local homebrewers via his Web site (www.homebrewkorea.com). Since 2008, he has managed an online beer forum and in 2010 launched the annual "Korea Homebrew Competition" in which Koreans and ex-pats enter homemade beers into a blind tasting competition to select the best brews. According to Titley, demand for quality beer is so high that two microbreweries are currently investing in larger capacity facilities to supply consumers and pubs.
3 Apr. 2012