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.
New poll shows minimum pricing will undermine the great British pub
YouGov polled 1261 people who had had an alcoholic drink in the last week1 to find out whether a minimum price would make them more or less likely to go to the pub. The results show that at a minimum price of 45p:
Less than 1%(0.36)% say they will drink less at home and more in the pub
39% will drink less in the pub
45% will continue to drink the same as they did before, both at home and in the pub
Pubs in some regions will be more affected than others, with 54% of people surveyed in the West Midlands saying they’ll drink less in the pub compared to 28% in Scotland
People who are constantly struggling to keep up with their outgoings are the most likely to drink less in the pub (56%)
The report also shows that some people will cut back on other things in order to cover the increased cost of what they drink at home.
16% of respondents said they would be very or fairly likely to cut back on other areas of spending; of those struggling or falling behind with their outgoings this rose to 24%
17% of those who thought they would end up spending more on alcohol said they would cut down on leisure activities, for example going to the cinema, and 16% said they would cut back on clothing
13% of those struggling or falling behind with payments said they would cut back on food, compared to 8% of the general population. 18% of 18-24-year-olds said this was also something that they would do.
Commenting, SABMiller’s Senior Vice President of Industry Affairs, Mike Short said:
“This shows that people don’t behave in the way computer models predict. If the Government really wants to cut anti-social binge drinking it needs to tackle that culture with better education for parents and in schools, targeted local schemes and proper enforcement of the existing licensing laws.”
Tim Martin, Wetherspoon’s Chairman, said:
“The fact that less than 1% of people said they would drink in the pub more often and less at home puts paid to the Government’s claim that minimum pricing will help the UK pub industry.”
Notes to editors
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,115 adults , of which 1261 had drunk in the last week. Fieldwork was carried out between 7 and 9 January 2013. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
The explanation of minimum pricing included in the survey was as follows:
There have been proposals to change the law so that there is a minimum price for alcoholic drinks, according to how much alcohol they contain. If this law is passed, some drinks sold in shops and supermarkets will increase in price. A minimum price of 45p per unit has been suggested, which according to the Wine and Spirit Trade Association would see 52% of prices in supermarkets and off-licences rise overnight.
Below are some examples of expected price rises:
A 12-pack of lager (4% ABV) would rise in price from ?8 to ?9.50
A bottle of wine (13% ABV) would rise in price from ?3.69 to ?4.39
A bottle of vodka (37.5% ABV) would rise in price from ?9.00 to ?11.81
A bottle of whisky (40% ABV) would rise in price from ?10.32 to ?12.60
A 2 litre bottle of cider (5% ABV) would rise in price from ?3.20 to ?4.50
SABMiller plc is one of the world’s leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries. The group’s portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch; as well as leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA), Snow (China), Victoria Bitter (Australia) and Tyskie (Poland). SABMiller also has a growing soft drinks businesses and is one of the world’s largest bottlers of Coca-Cola products.
In the year ended 31 March 2012 the group reported EBITA of US$5,634 million and group revenue of US$31,388 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
29 Jan. 2013