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.
Russia. New Beer Law Draws Cautious Support, With Notes of Pessimism
“It’s not a spirit,” he declared matter-of-factly, standing in the Leningradsky railroad station in Moscow. “It’s a drink that quenches the thirst.”
“With spirits, fine, I agree, put some sanctions on it,” Viktor continued. “There’s beer that they make, which isn’t really beer at all, it’s actually a spirit. But normal beer, good beer, it should not be banned. It’s not right.”
Few subjects prompt keener interest or deeper philosophical rumination in Russia than alcohol, and those that do are invariably discussed over drinks. In Russia, which has one of the world’s highest rates of alcoholism and alcohol-related illness, vodka remains the top choice. But beer is not far behind. The average Russian drinks more than four gallons of alcohol a year.
The new law, which took effect on Jan. 1, aims to reduce those numbers. It bans beer sales from kiosks entirely, and in other stores between 11 p.m. and 8 a.m. And as with increased taxes on alcohol in recent years, it aims to curb public drinking, particularly the casual drinking in city parks and snow-covered promenades that can begin before breakfast and end after midnight.
Though technically illegal, drinking in such public spaces is usually tolerated.
As with other weighty subjects that generate fierce debate here — the quality of Moscow theaters; the level of national security; the relative greatness of writers and poets — there are conflicting views on the new law. Even some people whose businesses will suffer said they supported the government’s goals.
“It’s better; maybe people will drink less,” said Natalya Novikova, who works at a kiosk on Tsvetnoy Bulvar in central Moscow, located on a plaza near a subway station. “People in the square relaxed, drank beer, round the clock.”
She added, “After work, they grabbed a beer, and now, well, the government needs people not to drink.”
Industry statistics show that the kiosks, which line streets and typically cluster around subway stations, account for about 30 percent of beer sales. At the kiosk on Tsvetnoy Bulvar, Ms. Novikova said beer was the single most popular item, accounting for nearly $700 in sales a day.
The law is also expected to put at least a small dent in sales for beer manufacturers. Ben Morton, a spokesman for Carlsberg, which is the largest beer-maker in Russia and controls about 40 percent of the market, including the brand Baltika, said that similar restrictions existed in other countries and that the company was well prepared.
“We anticipate some potential short-term disruption,” Mr. Morton said, “but no significant long-term implications.”
Some kiosk owners and managers said it would be difficult to stay in business without beer sales; others said that they would survive but that if similar restrictions were put in place on cigarettes, it would effectively spell the end of such kiosks.
“For business it’s bad, and there are large layoffs for staff,” said Gigla Mebonia, the manager of the Tsvetnoy Bulvar kiosk. “For places like this it is bad, but on the other hand the law is justified for the people to drink less.”
Vitally Kordyukov, 37, who works as a private-car driver and was walking by, said he agreed with the restrictions, even if the effect might be limited. “It’s not very appropriate to drink beer on a bench,” Mr. Kordyukov said. “Of course, people will continue to drink.”
But at the Leningradsky station, where passengers are accustomed to buying a few beers before boarding an overnight train, Yulia Semyonova, 24, and her boyfriend, Kirill Vasko, 26, said the new restrictions were pointless and inconvenient. While kiosks are barred from selling beer, cafes continue to do so, but at higher prices and farther from the train platforms.
“People won’t drink less,” said Ms. Semyonova, who works in sales for an engineering company in St. Petersburg. “People will just buy stronger alcohol in advance and buy more.” A beer that cost just over $1 at a kiosk would cost $2 in a cafe, or more if purchased on board the train. “It’s almost twice as expensive,” she said.
Mr. Vasko, who works in logistics, said: “A sinner must have his vice; one shouldn’t get in the middle of it. Like prostitution or anything else, each person has his own. Whoever wants to drink will drink. If someone goes to brothels, then he’ll go to brothels. It’s impossible to stop.”
Viktor, the security guard from the north, who like many Russians declined to give his last name out of a nonspecific fear of the authorities, said that the new law was meddling with a society that could trace its love of beer back more than 1,000 years.
“Even before Moscow, there was Kievan Rus, and there was beer even then!” he said, referring to the eastern Slavic state that existed from the 800s to 1200s.
As he began this historical exposition, Viktor put down a rather large bottle of beer and spoke carefully with just a slight trace of an intoxicated slur.
“They drank beer then as the noble people’s drink. Moscow did not exist yet, only Kievan Rus with its cities, if you know the history, and back then the beer was normal.” He added, “And I drink a noble drink, a beer from Kiev called Obolon — the most normal beer.”
Viktor said that the government’s other big mistake was allowing the privatization of the beer and spirits business after the breakup of the Soviet Union.
“Even in the czars’ times, it was the most profitable business for the state,” he said. “Having alcohol production under state control would bring a lot of money to state budgets. But now it’s in private hands, and they are paying back kopecks to the state while making millions in profits — a ruble for the state and 10 for themselves. Everybody knows it, but keeps silent.”
8 Jan. 2013