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.
Africa. Heineken “satisfied” with ownership mix – analyst
In a note on Heineken's investor day in Lagos yesterday (13 November), Nomura said that the group “continues to appear happy to have different business models across the region”. These include majority control in Nigerian operations, a partnership with Diageo in South Africa, and Coca-Cola/beer combinations in Central Africa.
The major difference to its competitors in the region is its focus on international premium brands, especially Heineken, Nomura said. As a result, the brewer has “no interest in entering the local opaque beer segment,” the note said.
It flagged that, with the brewer's Asia Pacific Breweries acquisition, emerging markets are set to account for 55% of EBIT and 62% of consolidation beer volumes. Within that, Africa (19% of EBIT) has been “a key driver accounting for 42% of group profit growth in the 2007-11 period”, Nomura said.
Nigeria, the analyst estimates, accounts for around half of Heineken's African earnings. The country has recognised growth drivers, including strong population growth, a middle-class boom and urbanisation. But, it noted: “Half the population is Muslim, mainly based in the north, which restricts consumption of beer, but provides an opportunity for malt-based drinks”.
Heineken is focussing on high-end on-trade accounts in Nigeria as it looks to compete against spirits, the note said. Around 65% of the country's beer volumes are from the on-trade, especially in “beer parlours” accounting for 40%, it noted. However, the off-trade is growing faster, with some growth of modern retail from low levels.
15 Nov. 2012