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.
Vietnam’s beer output rises 4.7 percent to 3.4bn liters in 2015
Including the 2015 figures, the Vietnamese brewery industry achieved an average of seven percent in annual growth between 2011 and 2015, the VBA said.
Currently, there are approximately 129 brewery production facilities across the country, many of which are large-scale plants with an annual capacity of 200 to 400 million liters, such as the Cu Chi Brewery Plant under Saigon Beer-Alcohol-Beverage JSC (Sabeco), the Vietnam Brewery Plant in Ho Chi Minh City, and the Me Linh Brewery Plant under Hanoi Beer-Alcohol-Beverage JSC (Habeco) in Hanoi.
According to the VBA, the total annual capacity of the local beer industry has to this point reached about 4.8 billion liters.
Vietnam currently imports about three million liters of beer and exports 70 million liters per year.
With regard to wine, about 162 industrial wine production plants nationwide produce roughly 70 million liters on a yearly basis, and the production of homemade wine for local consumption is estimated at over 200 million liters per year, according to the VBA.
Regarding beverages, the country’s output reached 4.8 billion liters in 2015, growing 8.38 percent on average in the 2011-15 period, the VBA said.
By the end of last year, Vietnam had had nearly 1,833 beverage production facilities with a combined annual capacity of over five billion liters.
Soft drinks and fruit juices experienced a high growth rate, making up 85 percent of the market share of beverages, while mineral water accounted for about 15 percent.
Using the 2015 results, the VBA has set ambitious targets for 2020, including producing 4-4.25 billion liters of beer per year, 8.3-9.2 billion liters of beverages per year, and 320-360 million liters of wine per year.
Vietnam is considered a highly potential market for both local and foreign brewers with an annual capacity of 3.1 billion liters, and a goal of 4-4.25 billion liters by 2020 following a plan set by the VBA.
It is also a market where competition is fierce between local and foreign rivals.
Masan Consumer Holdings, one of the biggest Vietnamese producers of fast-moving consumer goods under Masan Group, last month officially began operating its VND1.6 trillion (US$70.4 million) beer plant in the Mekong Delta province of Hau Giang, one day after entering into a massive deal with a Thai conglomerate.
The Masan Brewery HG plant, which covers 14.6 hectares in Nam Song Hau Industrial Park in Chau Thanh District, will help increase Masan Consumer Holdings Brewery’s capacity from 50 million liters to 150 million liters a year to keep up with rising demand.
Masan entered the beer market in September 2014 with Su Tu Trang (White Lion) beer products.
Last month, Masan also reached a $1.1 billion deal enabling a Thai brewery conglomerate to own a 25 percent stake in Masan Consumer Holdings and 33.3 percent of Masan Brewery.
The strategic cooperation between Masan and Singha Asia Holdings Pte Ltd of Thailand, which will reduce the ownership of Masan Consumer Holdings in Masan Brewery to 66.7 percent, is expected to be completed this month.
The two parties said the agreement will allow Masan and Singha to immediately expand their market from national to regional scales, with a focus on inland ASEAN countries, including Vietnam, Thailand, Myanmar, Cambodia and Laos, which have 250 million consumers in total.
Singha is a member company of the Group Boon Rawd Brewery, a Thai brewery established in 1933. Today Group Boon Rawd Brewery is the owner of a wide range of products with brands like Singha, Leo, B-ing, Purra, and Sanvo produced by its 50 affiliates.
Masan said the deal would help bring the total value of the company to $4.2 billion, up from its current VND56 trillion ($2.46 billion) capitalization on the Ho Chi Minh City Stock Exchange.
A report from the Ministry of Industry and Trade, seen by Reuters last month, revealed that Vietnam's biggest state-run brewer Sabeco does not wish to sell a major stake to a foreign shareholder.
The report was prepared for a meeting, to which no foreign media were invited, between ministry officials and heads of some state-owned enterprises, including Sabeco, on December 21, Reuters reported.
Vietnam, which consumes three billion liters annually, is currently the third-biggest beer market in Asia, after China and Japan.
In 2015, reports that the government will divest from many local beer firms captured the attention of a large number of foreign firms that do not want to miss the opportunities present in the 90-million-strong Southeast Asian country.
Many foreign brewers, like SABMiller, Kirin Brewery, Asahi Breweries, Asia Pacific Breweries, spoke publicly about their intention to become strategic partners of Sabeco after the trade ministry announced the government’s divestment plan.
Among them, Thai Beverage wanted to buy a 53 percent stake in Sabeco with several billion U.S. dollars, and Singha Corp also showed their intention to jump on the Sabeco bandwagon.
Currently, Sabeco’s market share is about 46 percent, while 17.3 percent is held by another state-run brewer, Habeco, and 18.2 percent is grabbed by Vietnam Brewery Limited, which produces and imports many products, including Heineken and Tiger.
20 Jan. 2016