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.
Criticism of S.Korean beer
South Korean beer companies denied the allegations, with one saying, “Most (South) Korean beers contain more than 70 percent malt, and some including Hite Max of Hite and OB Golden Lager of OB contain 100 percent malt. Rice and corn are not cheaper than malt, and these grains are used in the mixture to generate a mild taste.” Hoegaarden, a premium Belgian beer that requires a highly sophisticated brewing technique, is produced through an original equipment manufacturing arrangement at a South Korean plant owned by OB Brewery. Other than Belgium, Hoegaarden is produced in South Korea and Russia only, which demonstrates how advanced South Korea’s beer production technology is. Hite and OB Brewery say differences in flavor between imported and Korean beers are due to consumer preference. Angry at the article, the two companies plan to complain about it via a letter to the editor of The Economist.
Beer has three main types: lager, ale and bitter. The South Korean market is dominated by lager, which is fermented at low temperatures and offers a mild and crisp taste. Europeans prefer ale, which is fermented at room temperature and has higher alcohol content and a bitter taste. Bitter is black beer, which is brewed by frying barley sprouts into a dark color. In the past, Korean breweries had introduced a number of beer types, including ale and bitter, but the market share of non-lager beers remained small. Korea also exports a large volume of beer, with its main market being Southeast Asia, where the weather is hot and humid. The U.S., which has a large ethnic Korean population, is another major importer of Korean beer.
Despite the angry reactions by the South Korean breweries, quite a few beer drinkers in South Korea complain about the taste of domestic beer. The Economist was also correct in that the oligopoly here is due to regulations that only grant a license to produce beer to a company with production capacity of 2.77 million liters or more. This standard was eased to 150,000 liters last year, and a wider variety of domestic beers have been introduced to South Korea. Yet they still have a small market share. The Economist report includes many pieces of misguided information, but the debate it incited will hopefully lead to richer-tasting beer made in South Korea.
29 Nov. 2012