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.
Japan. With SABMiller deal, Asahi helps rival out of a jam
AB InBev, already the world's largest brewer, has agreed to acquire SABMiller, the world's second-largest brewer, but both beverage makers realize government trustbusters may not look kindly on one company controlling much of the global beer market. As a result, SABMiller has agreed to unload three brands -- Peroni, Grolsch and Meantime -- as well as U.K. distribution subsidiary Miller Brands (UK).
The Asahi Group has agreed to pay 2.55 billion euros ($2.89 billion) for the assets.
The deal is subject to AB InBev completing the acquisition of its largest competitor.
"We are pleased to have received this binding offer from Asahi," said Carlos Brito, chief executive officer of AB InBev.
Peroni is an Italian brand that has been around since 1846. SABMiller in 2003 acquired a majority stake in the brewer from the founding family. The Italian brewer also makes the Nastro Azzurro and Peroni Forte beers.
Grolsch, a more full-bodied beer, has been around since 1615. The Dutch brand has gained a following despite hailing from the same country as Heineken, the world's third-largest brewer. SABMiller acquired the Dutch brand in 2007.
Attractive to Asahi
The top reason for the sale is to address global antitrust concerns. AB InBev already controls nearly half of the U.S. beer market. In November, a month after AB InBev agreed to buy SABMiller for 71 billion pounds ($104 billion), it decided to sell SABMiller's stake in MillerCoors, a joint venture between Molson Coors and SABMiller. The sale price was $12 billion.
AB InBev and SABMiller have a combined share of less than 13% in Europe, lower than Heineken's. Nevertheless, AB InBev/SAB in December showed its intention to sell the four European operations.
The pending sale to Asahi would also help reduce a $75 billion syndicated loan that AB InBev took out in November to help finance the SABMiller acquisition.
AB InBev's swallowing of SABMiller would leave the beer colossus with more than 400 brands.
As the industry consolidates, brewers are trying to secure dominant positions in their domestic markets while also exporting their brands to emerging countries, where they market their beers as premium brands. However, having hundreds of brands to market creates its own problems.
Now AB InBev is looking to gain market share in Africa, SABMiller's stronghold, which makes the Peroni and Grolsch brands dispensable. The Italian and Dutch beers, however, remain attractive to Asahi.
15 Feb. 2016