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.
Premium beers set to drive growth in the off trade Brazilian beer market, reports Mintel
The off trade strong and premium beer market was valued at R$ 5.29 billion in 2011. Showing just how popular these beers are becoming, in 2011 this segment managed to gain a 0.6% share from the standard segment in value, rising from 11.4% market share in 2010 to 12% in 2011. In contrast, the standard beer segment lost market share, going from 87.6% in 2010 to 87% in 2011.
The report also reveals the appeal that international brands have for consumers in Brazil, especially young and upper-class adults. Today, a quarter (25%) of upper-class Brazilians (AB) claim to drink international brands, compared to 18% in the C1 group, 11% in the C2 group and 7% in the D and E social segments. Similarly, international brands have also been successful among a younger audience in Brazil, with 26% of those aged 18-24 claiming to drink them. This number continues to be high among adults aged 25-34 (23%) but sees a marked decline for those aged 35 or older: with 13% of those aged 35-44 drinking them, 12% of those aged 45-54 and just 7% of those aged over 55.
Sebastian Concha, research director, Latin America at Mintel, said:
"The fact that premium beers are gaining more market share from the standard beer sector highlights the changing consumer mindset in Brazil and how beverage habits relate to this. Huge opportunities lie with Brazil's hosting of key live sports events in the coming years. With a strong sporting prowess in Brazil and a product closely linked with sporting culture, beer manufacturers who can capitalize on local enthusiasm and blend this to ensure a premium product positioning stand to benefit."
"International beer brands also hold great potential for growth in the next year in Brazil. They enjoy the glamour of a cosmopolitan allure, have strong marketing prowess and can help this high volume market achieve much more lucrative profit margins," Sebastian Concha continues.
With volume sales of 12.7 billion liters in 2011 (equivalent to 67 liters per capita) up 22% from 10.4 billion liters in 2007—Brazil is the third largest market in the world in terms of volume consumption, with only China and the US ahead. This year the market is set to break the 13 billion mark to reach 13.3 billion liters. And the appeal of beer appears set to continue in Brazil, as Mintel forecasts volume growth of 15% over the next five years to reach 15.3 billion liters in 2017. With a retail value of $23 billion USD in 2012, up from $13.7 billion USD in 2007 the future also looks positive with total retail value set to hit $33 billion USD by 2017.
"The premiumization of the industry will be a key driver for market growth over the next five years - representing significant opportunities for the sector," Sebastian Concha continues.
Mintel's report also reveals that low temperature is a key selling point of beer in Brazil. While in many countries, cold beer suffices to quench consumer thirst, super cold beers are a must for almost all Brazilians. Some 95% of beer drinkers claim to only like their beer served very cold, with 84% of consumers strongly agreeing with this statement.
"The high level of consumer demand for super cold beers has led to innovation in NPD in the market, including color-changing packaging and cold filtering. Some brands have launched a 4-litre barrel-shaped pack with a temperature gauge that indicates when a beer is ready to be consumed. Another brand has introduced packaging with a color-changing label that turns blue when the beer gets cold," Sebastian Concha notes.
Meanwhile, the gender gap within beer consumption is still apparent in the Brazilian market place. Mintel's research shows that in Brazil, 65% of men drink beer, compared to 38% of women. And while manufacturers have invested in trying to re-address this balance, it appears that perceived gender related attributes will not be the way to success. Indeed, Mintel's research reveals that women have only limited interest in low-calorie formulations. While 27% of women that consume beer say they try to avoid it because it makes you gain weight, it is not a significant difference from the 23% of men claiming the same. In addition, women seem to be more conservative in the types of beer they are drinking. While 57% of male beer drinkers claim to like trying new types of beer, this number reduces to 45% when the question is asked to women.
"The most successful strategies to attract more women will be the ones that appeal to universal tastes and stress key selling points of the beer itself. International beer brands in particular are in a great position to redefine beer as a genderless category, having an especially receptive segment among younger and wealthier women," Sebastian Concha concludes.
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27 Nov. 2012