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.
BrauBeviale 2014: at the heart of a united Europe
• Focus on PET – also of interest to small and medium enterprises
Probably no event was as decisive for recent world history as the fall of the Iron Curtain on 9 November 25 years ago. This not only ended the Cold War – the eastward enlargement of the European Union brought peace, democracy and economic development. N?rnberg, which was previously located at the eastern edge of Western Europe, moved into the centre of the new united Europe. BrauBeviale also profited from this and repositioned itself within a few years: from a trade fair for the predominantly German brewing industry to this year’s most important capital goods exhibition in the world for the beverage industry. It takes place with some 1,300 exhibitors and about 33,000 trade visitors in the Exhibition Centre Nuremberg from 11–13 November.
“BrauBeviale has profited a lot from the opening up of the East European markets. The spectrum of products is more extensive and the exhibition has become appreciably more international,” says Andrea Kalrait, Director Exhibitions BrauBeviale at N?rnbergMesse, describing the development of the past years. The number of exhibitors in 1989 was 559, of which 10 per cent were international; in 2012 there were 1,284 (45 per cent international). The situation is similar for visitors: there were 15,189 in 1989 (10 per cent international) and 32,810 (38 per cent international) came in 2012. “The Czech Republic is one of the leaders among our top ten countries. And we are pleased that many exhibitors and visitors from Russia are also frequently guests in N?rnberg and feel at home at BrauBeviale,” says Andrea Kalrait. The countries of Central and Eastern Europe showed record growth averaging five per cent a year between 1993 and 2008 (UNECE Statistical Database). This economic development was driven by the direct foreign investment, including by the European food and consumer goods industry, to which the brewers also belonged. The long-term decline of beer consumption in Western Europe and the knowledge of the connection between rising Gross Domestic Product and rising beverage consumption in the emerging markets are reasons why they were among the first investors in these markets. Their goal: to capture new markets and defend or improve their existing position over competitors. The acquisition costs of the European brewers in Central and Eastern Europewere initially still relatively modest: less than a billion euros between 1990 and 1999. However, they acquired the know-how on taking over and later the capital as well, which enabled them to more or less complete the globalization of the brewing industry successfully in the subsequent years until 2013. What they lost on beer sales in Western Europe they could easily recover from the growing beer consumption in the Central and Eastern Europe region.
Central and Eastern Europe: market for product innovations
Many beer markets in Central and Eastern Europe have apparently been successfully developed into mature markets in only 25 years; that is, a price architecture has been installed that covers all segments – budget, regional, national, premium and international premium brands – as we are familiar with in West European countries. Consumers can now also choose from a broad range of drinks in these markets. Moreover, the international brewing concerns appear to prefer these markets to the West European markets when it comes to launching product innovations. The idea suggests itself that the multinational brewers assume consumers in Central and Eastern Europe are more willing to try out new drinks than their customers in other parts of Europe. This is shown, for example, by the sales figures for the beer mix drink shandy: Sales of shandy in Central and Eastern Europe rose from 66,000 to 2.9 million hl between 2006 and 2013, but only from 5.2 to 6.3 million hl in Western Europe (estimates by Canadean).
PET trend in Central and Eastern Europe and at BrauBeviale 2014
Consumers in Central and Eastern Europe also seem to be more receptive to packaging innovations. Prominent example: the use of PET packaging for beer. Sales of beer in PET in Western Europe increased from 402,000 to 6.1 million hl from 1999 to 2013, whereas the figure for Central and Eastern Europe shot up from 3.5 million hl to 85 million hl in this period (estimates by Canadean). The currently largest market for beer in PET is undoubtedly the Russian market, where almost half of all beer is bottled in PET containers. BrauBeviale also presents the PET complex as a focus topic for its 33,000 trade visitors. PET is not only a trend for large concerns, but also offers attractive solutions for small and medium enterprises – [email protected] makes this clear, with discussions on current trends in the PET beverage and packaging industry. The market-orientated PETnology concept “connecting comPETence” with PETarena and Packaging Wall of Excellence takes place for the first time in 2014. Companies use this setting to present their diverse spectrum of PET products and services. Whether machinery manufacturers, bottlers, packaging developers or suppliers – the PETarena is an informative place to go for everyone involved in the PET value chain. The event starts with the two-day international PETnology Congress, which takes place on 10–11 November, immediately before the exhibition. The special theme is rounded off with a special tour of exhibitors that highlights the PET solutions of the participating exhibitors at the whole exhibition. www.brau-beviale.de/en/pet
Beer market in Europe – culture of craft brewing provides variety
Although Europe as a whole is still by far the second largest beer market in the world after Asia, estimates by the Japanese financial services provider Nomura indicate that beer consumption in Europe will increase only moderately in the coming years: from 498 million hl in 2012 to 509 million hl in 2017. Far greater growth is attributed to other regions: Latin America (2.3 per cent a year), Asia (3.4 per cent) and Africa (4.2 per cent). But the European beer market is livelier than ever. Craft beers and a variety of beer specialities are gaining increasingly in importance. The number of European microbreweries is growing constantly: in Italy (>400), in Switzerland (>400), in France (>100) and Great Britain (>1,000), in Norway (>40), in Poland (<100) and the Czech Republic (>200). Of the over 1,300 breweries in Germany, more than 90 per cent can be described as craft breweries. Reason enough to establish the culture of craft brewing as a trend topic at BrauBeviale. Highlights ranging from the European Beer Star Award and inspiring presentations to the Craft Beer Corner provide sufficient opportunities for interested visitors to examine this topic. www.brau-beviale.de/trends
About BrauBeviale: Good conversations. Good business.
BrauBeviale is the world’s most important capital goods exhibition for the beverage industry in 2014. Some 1,300 exhibitors (2012: 45 % international) present a comprehensive spectrum of high-quality beverage raw materials, innovative technologies, efficient logistics and sparkling marketing ideas in the Exhibition Centre Nuremberg from 11–13 November. The expected 33,000 visitors (2012: 38 % international) come from technical and commercial management in the European beverage industry. The experts from breweries, malting houses, wineries, distilleries, dairies, producers of non-alcoholic drinks, the hotel and catering trade, the specialist retail and wholesale beverage trade, and engineering and planning consultants are highly qualified and 88 % of them are involved in investment decisions (results of a survey by an independent institute in 2012). The exhibition’s popular mix of professional presentation and personal contact in a friendly atmosphere is convincing with features such as manageable cost of exhibiting, highly efficient, information-packed and concentrated three days of exhibiting, comprehensive range of products, intensive personal dialogue with decision-makers, and ideal date:
BrauBeviale 2014: 11–13 November
BrauBeviale 2015:10–12 November
BrauBeviale 2016:8–10 November
29 Jul. 2014