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.
US. Breweries pour millions into MT economy
According to a recent study conducted by UM’s Bureau of Business and Economic Research, Montana’s craft brewing industry is rapidly growing and continues to have a substantial impact on the state’s economy.
Researchers found Montana breweries, combined, produced roughly 103,000 barrels of beer in 2011, selling for a total of $26.1 million. They paid their employees $6.4 million and totaled $18.8 million in expenditures, almost half of which was spent on Montana goods and services.
Researcher Colin Sorenson said his economic model estimated the industry has created 434 jobs in Montana, while contributing $48.4 million in private sector sales. The industry also produced $1.5 million in government revenues.
In addition to dollars already brought in, Sorenson said craft brewing could have an even bigger impact in future years because its growth rate dwarfs that of other industries.
From 2010 to 2011, the number of Montana jobs increased one percent, while the manufacturing sector grew three percent. But employment in the breweries, which is a small subsector of manufacturing, increased 39 percent during the same time frame.
“I knew the industry was growing, but I was surprised to see just how fast it was growing between 2010 and 2011,” Sorenson said. “Clearly that’s not a trend that we would expect to continue for a long time, but it shows the current rate of growth is much faster than the manufacturing sector or the state in general.”
While the industry’s growth rate may be surprising, Montana’s love affair with craft beer is no secret.
The Brewers Association announced earlier this year, Montana ranks second in the nation in breweries per capita, with one for every 30,919 citizens, only Vermont ranks higher. With Montana’s 38 operational breweries — up from 33 in 2011 — the Treasure State may take the top spot in next year’s survey.
According to the Sorenson’s research, Missoula is certainly doing its part to make Montana the craft brewing capital of the United States. Some of the state’s biggest and most established breweries reside in Missoula, including Big Sky Brewery — the state’s top producer — and Kettlehouse Brewing Co., which is almost too popular for its own good.
The producers of Montana favorites such as Cold Smoke, Double Haul and Eddy Out, Kettlehouse had to pull out of several markets to stay below the state’s 10,000 barrel limit for breweries wishing to sell on-site.
Neal Leathers, the president and cofounder of Big Sky Brewery, said the law was put in place in the 1990s, when local breweries had no intention of selling on-site. He said Big Sky was already producing more than 10,000 barrels when the law was passed, but as business around the state continues to boom, brewery owners may approach the state Legislature about changing the cap.
“We’d love to be able to sell pints at our place, and it’s annoying that when people come to Montana to visit the breweries they can drink on-premise at every brewery except ours,” Leathers said. “We’re still fine without it, but it would be nice if that got changed at some point.”
The owners can certainly make a strong case, as the four Missoula breweries — Big Sky, Kettlehouse, Bayern and Draught Works — accounted for $15.1 million in sales in 2011. Since Draught Works just opened its doors in October of last year, that number is on pace to increase substantially in 2012.
The Missoula breweries also employed 109 people last year, and as the nation climbs out of recession, Sorenson said Montana’s craft brewing industry provides hope during grim economic times.
“It’s a real encouraging sign to see an industry doing this well in an economy that’s slowly recovering,” he said.
Sorenson pointed out the industry’s success could be attributed to Montanans’ willingness to support local businesses or a larger cultural phenomenon surrounding craft beer. Or as Tony Herbert, executive director of the Montana Brewers Association, said, perhaps its success can be attributed to something much simpler.
“Montana brewers just make great beer,” Herbert said. “I mean, we are part of the pedigree of great brewers and breweries in our nation. People look forward to the next time they can have a Montana beer in their hands.”
16 Nov. 2012