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.
World of Beer to open taverns in China this year, India and the Philippines are next
This year the Tampa-based tavern chain known for its extensive craft beer offerings will open its first overseas bar in Shanghai, CEO Paul Avery said. After that, World of Beer is headed to India and the Philippines. For Avery, a 20-year veteran of the Outback Steakhouse chain, the move to open franchisee-owned taverns overseas is the next logical step for the brand's growth.
"I am very confident that World of Beer will do well in international markets," Avery said. "Craft beer is already there. But no one out there offers what we do."
Americans like to think that beer is solely a yellow, bubbly beverage born in the United States, thanks to brands like Budweiser and Coors, said Brian Connors with Connors Davis Hospitality, a global food and beverage consulting firm in Fort Lauderdale. But every country has a beer culture, he said.
"What you're seeing is this globalization of American concepts that are flourishing overseas. World of Beer isn't the first, but it's part of this wave of fast casual restaurants and gastropubs that are popping up in new markets," Connors said. "Beer is globally accepted. It's a good move."
Avery, 56, joined World of Beer as the company's CEO in January 2013 when he bought a controlling interest for an undisclosed price. In just three years, World of Beer hardly looks like it did when it launched in 2007. The bar now offers an array of craft cocktails. The footprint is nearly double in size. And most of the taverns serve food.
The 6,000-square-foot World of Beer that opened in September on Fowler Avenue near the University of South Florida offers an open-air bar atmosphere and its own kitchen. It represents what many World of Beer locations will look like soon, Avery said. And when the World of Beer in West Shore's Avion Park opens in May, it will have a two-story patio called "the flight deck."
"The taverns that don't have kitchens yet will get them soon. We're working on converting all of them," he said.
Just don't call World of Beer a restaurant.
"The focus is still on craft beer," Avery said. "But we knew we had to expand what we offered in order for this to be sustainable. We think the new food menu and craft cocktails only broaden our appeal."
Restaurant analysts agree.
"The pub experience is one for social gathering that just so happens to have great food and great cocktails," Connors said. "It's a smart move by World of Beer, and I think a lot of what's behind it is millennial-driven. Even at a chain, consumers look for that authentic beer and food experience these days."
There's a lot competition, too, in the craft beer market. In Tampa Bay alone, World of Beer competes directly with another craft beer bar chain, the Brass Tap; local brewpubs; and a slew of restaurants that sell craft and locally brewed beer. That's not to mention the dozens of local breweries that have started up on both sides of the bay.
"As high-quality craft beer has grown and can be found in most bars and restaurants, competition is heating up and the pressure to deliver a better and more unique experience is more pressing," said Darren Tristano, president of Technomic, a Chicago food research firm. "Their strategy appears to be putting them on track to satisfying a more broad-based consumer occasion set by expanding to food and cocktails."
World of Beer has 77 locations in 19 states, including taverns in Manhattan and Kentucky, which opened last year. Of those, 14 are company owned and the rest are owned by franchisees. Avery said World of Beer will open 35 new restaurants this year, including at least one of the three planned for overseas in Shanghai.
The goal is to grow the number of company-owned stores to 30 percent, Avery said.
"It's a great investment for our shareholders, and it makes us a better franchiser when we know what the day-to-day operations are like," he said.
What does it take to be a World of Beer franchisee?
Franchisee candidates should have previous business ownership and employee management experience. It takes a $1 million net worth to get started, and an initial investment of $900,000 to $1.2 million.
Where are they now?
Scott Zepp and Matt LaFon founded World of Beer in Tampa in 2007. They still own the original location in Westchase and another in Pensacola. Both are members of the World of Beer board of directors and are shareholders in the company.
Where is World of Beer?
In 19 states, expanding into four more and overseas, including: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, North Carolina, New Jersey, New York, Ohio, South Carolina, Tennessee, Texas, Virginia and Wisconsin. Opening soon in Massachusetts, Minnesota, Oklahoma and Pennsylvania, and China, India and the Philippines.
16 Feb. 2016