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.
SABMiller Joins Bond Rush in Europe as Credit Markets Rally
The world’s second-biggest brewer issued the notes due January 2020 to yield 70 basis points more than the swaps rate, according to people familiar with the deal. Debt issuance will top at least 16.4 billion euros this week, the busiest since Sept. 16 and above the year’s weekly average of 14 billion euros.
Companies are taking advantage of a rally that pushed the cost of insuring the region’s bank debt to near the lowest in 16 months as they raise funds before the holiday period. Corporate bonds in Europe yield a record low 2.2 percent, Bank of America Merrill Lynch’s EMU Corporate index shows.
“These are the last weeks before the holidays, so the last chance to issue this year,” said Harold Van Acht, senior credit analyst at Kempen Capital Management NV in Amsterdam. “Both absolute yield and credit spread levels are generally attractive for issuers and investors still want to put cash to work.”
London-based SABMiller last sold bonds in euros in July 2009 when it raised 1 billion euros of notes due January 2015 priced to yield 170 basis points more than the benchmark swaps rate, according to data compiled by Bloomberg.
TeliaSonera, Sweden’s largest telephone company, sold 400 million pounds ($641 million) of bonds due in 30 years, its first deal in the currency, at a spread of 135 basis points more than gilts, according to people familiar with the transaction. British security provider G4S marketed 500 million euros of six- year bonds at 167 basis points more than swaps.
Also in the market for the first time is German power company Bilfinger, offering 500 million euros of seven-year bonds that will yield 115 basis points more than swaps. The securities were initially marketed with a spread of about 135 basis points.
Bonds of Spanish utilities Iberdrola SA (IBE) and Gas Natural SA were the best performers today in Bank of America Merrill Lynch’s EMU Corporates Non-Financials index. The yield on Bilbao-based Iberdrola’s 4.125 percent notes due 2020 fell 12.3 basis points to 250 basis points more than benchmark German government debt. That’s the smallest gap since March 23. The spread on Gas Natural’s 5.125 percent 2021 notes shrank seven basis points to 384.
Credit-default swaps insuring Spanish government debt fell as much as 12.5 basis points to 277, approaching the lowest level in 16 months. Contracts on Italy dropped as much as 11 basis points to 236, the lowest since Oct. 18.
The Markit iTraxx Financial Index linked to senior debt of 25 European banks and insurers dropped five basis points to 159 at 3 p.m. in London, approaching the lowest in 16 months. The subordinated index fell six basis points to 279.
The Markit iTraxx Crossover Index of swaps on 50 companies with mostly junk credit ratings declined 14 basis points to 493. The Markit iTraxx Europe Index of contracts on 125 companies with investment-grade ratings dropped three basis points to 122.
A basis point on swaps contract a protecting 10 million euros of debt from default for five years is equivalent to 1,000 euros a year. The derivatives pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.
30 Nov. 2012