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4-2017

Global hop market

A 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 Russia

Germany 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.

Vietnam. Big waves in the beer market

According to the Euromonitor data, the high company’s share in the beer market does not guarantee a large profit. Thus, Sobeco controls 46% of the Vietnamese beer market, its revenue in 2014 amounted to 30.000 billion dongs and net profit to 4,000 billion dongs. At the same time, VBL controls 18.2% of the market, but its profit is estimated at 6.200 billion dong.

The foreign breweries are focused on such segments of the market that allow getting more profit. For example, the brands Budweiser and Beck's of a world leader AB InBev are positioned in the premium segment. The company is building a brewery with a capacity of 50 million liters per year in Vietnam.

Meanwhile, a new player in the Vietnamese beer market, the Japanese company Sapporo is changing the focus to the more affordable segment of beer with the aim to increase its share. Mr. Mikio Masawaki, a new CEO of Sapporo in Vietnam, said: "The obstacles in the strategic branding were removed when we became a company with 100% foreign capital".

The news about the sale of the state share of the Sabeco Company in the amount of $2 billion has forced the world's leading breweries to involve in the struggle. If VBL and Sapporo have spent a lot of time to build their own system of production and distribution of beer in Vietnam, today there is a great opportunity to buy a 53% of the company’s share to cover nearly half of the market. SABMiller, Kirin Brewery, Asahi Breweries and Asia Pacific Breweries are the main candidates to buy this part of the share.

29 Dec. 2015

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