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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.

Carlsberg’s input costs could drag next year – analyst

The recovering Russian market is a boost for Carlsberg, but there are still question marks over the brewer's input costs for next year, according to an analyst.

The Danish brewer announced yesterday (7 November) that its nine-month net profits and sales had edged up, helped by an increasing market share in Russia.

Analysts Nomura said Carlsberg's growth in market share was evidence its efforts in Russia are “starting to pay off”. It said that part of this gain is down to Holsten sales, with the “remainder owing to stronger execution including roll-out of value management tools, product launches and revitalisation of existing brands”.

It also flagged a more “normalised” regulatory environment in Russia. “With respect to beer taxes, duty rises for both beer and vodka through 2014 have been announced and provide some certainty,” Nomura said. It added that as the gap between the price per unit of vodka and beer is likely to close over the medium term, this could be a “positive catalyst” to beer market growth.

However, the analysts warned that input costs going forward could offer a negative for the brewer. “We believe that the company is well hedged on input costs for North West Europe and Asia, however there is still some uncertainty for East Europe,” Nomura said. “We believe that overall input costs will increase mid-single digit in FY13, similar to the FY12 increase.”

13 Nov. 2012

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