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.
Australia&China. Woolworths plans to heat up liquor sales with Snow
Snow is the biggest beer brand by volume in the world and holds a commanding 23 per cent market share in its home country of China, where it is brewed by a state-backed entity called China Resources Snow Breweries, in which British beer conglomerate SABMiller holds a 49 per cent stake.
China Resources Snow Breweries has struck similar distribution deals to expand the reach of Snow in Hong Kong and South Korea, with the beer now made in 90 breweries across China.
The general manager of Woolworths' Dan Murphy's superstore chain, Campbell Stott, says there had been repeated requests from the Chinese community in Australia for the business to begin stocking the beer.
"It's clear there's been an appetite for Snow in Australia," Mr Stott says.
The large number of tourists visiting China and the regular procession of Australian business travellers had also been behind the decision to strike a distribution arrangement.
"It's been the most requested product on social media for the past two years, with members of the Chinese community as well as Australians who've travelled to China asking us to add Snow to the range".
Woolworths will also begin selling Snow in its 1266 BWS liquor outlets in the next few months, after initially stocking it in the 204 Dan Murphy's outlets.
Mr Stott says imported beers as a category are growing faster than local mainstream beers at Dan Murphy's but he won't divulge a percentage growth rate. "Our international beer range, like craft beer, continues to perform well."
Pricing just above Heineken and Peroni
The retailer's pricing of Snow puts it just above popular brands Heineken and Peroni. But at $44.90 a case for Snow, it is well below the premium commanded by Australia's No.1 imported beer, Corona, which is selling for $55.99 per case in Dan Murphy's outlets.
Corona is one of the stable of global brands owned by Anheuser-Busch InBev, which is seeking approval from competition regulators in a number of countries to proceed with a $152 billion global mega-merger with SABMiller, which in Australia owns the former Foster's Carlton & United Breweries business which makes Victoria Bitter and Carlton Draught.
China Resources in December, 2015 hired several investment banks to advise on a potential buyout of all or part of SABMiller's 49 per cent stake in the Chinese brewery operations because it is likely that SABMiller would need to sell down its stake in the maker of Snow to satisfy Chinese competition regulators, as part of the global Anheuser-Busch InBev takeover.
SABMiller and China Resources began their partnership in 1994 with two breweries, and booming demand has resulted in expansion to a network of 90 breweries across China.
The Australian Competition and Consumer Commission is conducting a two-month review on the local impact of the global mega-merger and intends announcing its decision on April 14. The main focus is the licensing deal for Corona, which has a market share of 5 per cent in Australia, and is likely to shift back to Anheuser-SABMiller if the merger succeeds, after rival Lion took over the Australian rights to Corona in 2012 under change of control of clauses. Foster's was taken over by SABMiller in 2011 in a $12.3 billion deal and had held the rights to Corona in Australia for the previous 22 years.
1 Feb. 2016