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.
Line Them Up: ‘Crafty’ Expats Stir Up the Vietnamese Beer Scene
They do indeed love their beer, consuming roughly 3.4 billion liters (nearly 900 million gallons) of it in 2015; it makes up about 98% of the country’s alcoholic drinks industry. Per capita consumption doubled between 2005 and 2011, thanks to Vietnam’s booming economy and the numbers reaching drinking age annually: about 1 million people.
Something new is filtering into this powerhouse market though: craft beer.
The vast majority of beer in Vietnam is cheap (the famous homemade bia hoi or fresh beer costs 22 American cents); it’s easy to drink in a hot climate (often served over ice); and it’s possible to drink a lot of it (3-5% alcohol content). “The Vietnamese have lived for so many decades with just lagers,” says Vietnam-based, Belgian native, beer-ingredient importer Gert Keersmaekers, 44. “This new middle class wants new things.”
Enter Western-style craft beer, with alcohol content sometimes past 10%, a rainbow of flavors and a price point to match its premium ingredients.
“When they first tried our beer, people would say, ‘This doesn’t taste like beer,’ ” says Alex Violette, the brewmaster at Saigon’s Pasteur Street Brewing Company. “I would respond, ‘No, what you’ve been drinking doesn’t taste like beer. It tastes like water. This is beer.’ ”
Pasteur Street’s founder, 32-year-old John Reid, recruited fellow American Violette, 30, from Colorado’s Upslope Brewing Company. Since opening just over a year ago, Pasteur Street has produced more than 30 flavors and now distributes to 50 outlets nationwide, with an international outlet coming soon. But, as Mr. Reid says: “We have had to create a craft beer culture [in Vietnam].”
“There are so many homogeneous beers out there. They all have the same message, the same flavor, the same approach to production. Our goal is to get more interesting, more craft-like product to as many people as possible, so they can enjoy variety, enjoy different stories and ideas, and a different way to experience beer,” says Tobias Briffa, a 28-year-old Maltese expat and one of the four behind Tê Tê Craft Beer.
Mr. Symons started brewing at Louisiane Brewhouse in Nha Trang in 2006 but remained an outlier until recently when a flurry of expat brewers such as Fuzzy Logic, Platinum, Phat Rooster, Pasteur Street, Tê Tê, Gauden, and Royal Eagle started selling in Saigon. In August 2015, the country’s first dedicated craft beer bar, Bia Craft, opened with six local brews on draft, to the relief of many Ho Chi Minh City expats.
“Bia Craft has provided a nest for craft beer in Saigon,” says Spaniard Ruben Martínez López, 32, also with Tê Tê. Chicago-native Mark Gustafson, one of Bia Craft’s three owners, brews and sells his own beer alongside the others. In the 42-year-old’s opinion, “We welcome anyone who is professionally making beer in Vietnam. There’s no way we can hurt each other.”
However, Bia Craft and most other outlets offering craft beer in the country currently remain more popular with expats. Just as other countries before it, Vietnam’s general public needs some more time and information to adjust to a new approach to beer.
“The whole concept of choice in the beer market here is brand new. It’s only since Sapporo entered the market four years ago that the consumer even had a choice [other than Tiger and Heineken],” explains Michael Comerton, 45, the founder of Platinum. “There’s very little knowledge about beer in this market. Here they drink brands. They don’t really drink beer for the sake of beer.” A native of Ireland, Mr. Comerton has more than two decades of experience in craft and mainstream beer in Europe, Australia and Asia.
He continues: “The market is changing though. Even if you go to a bia hoi, there are more and more people drinking packaged beer. That’s a fundamental shift. Everyone’s trading up.”
Mr. Keersmaekers points to several Vietnamese clients who make bia hoi but are investing in upgrades to craft beer production, “because they see where the market is heading.”
While working for a supplier to many of Vietnam’s mainstream breweries, 28-year-old Vũ Quang Văn traveled the world and developed a love for foreign craft beer. After opening joint venture homebrew shops in Hanoi and Ho Chi Minh City in the summer of 2015 (the only ones in the region) his family recently debuted a commercial craft brewery in Hanoi: Barett Craft Beer.
“We want to share the drinking culture, teach people about craft beer, and encourage other people to open their own breweries,” Mr. Văn says. “Craft beer is an unstoppable trend,” he adds, pointing to the booming industry in places like Japan and Thailand. “But we have just introduced this idea to the market. It will take time for other Vietnamese people to think seriously about it.”
Challenges beyond the customer base remain for craft brewers. “What [big breweries] are selling can be bought for 45 cents. We can’t even make our product for 45 cents,” says Lucas Jans, 36, of the emerging Lạc Brewing Company. Brewers also face an opaque Vietnamese legal bureaucracy, as well as an absence of the distribution and serving infrastructure needed to keep craft beer cold. However, these challenges are not stopping the beer from pouring.
“There’s a huge amount of opportunity here. It’s unlike anywhere else in the world in terms of craft beer, in my opinion,” says Mr. Keersmaekers. “For brewers, it’s heaven—if you have seen what’s happened in one year, you can imagine what will happen in five.”
WHERE CAN I FIND CRAFT BEER IN VIETNAM?
Ho Chi Minh City
BIA CRAFT | Arguably the heart of Vietnam’s craft beer scene, head over if you want the most possible variety of local and imported craft beer, along with a short food menu—90 Xuân Thủy, District 2. biacraft.com
PASTEUR STREET TASTING ROOM | Pasteur only distributes its Jasmine IPA and Saigon Saison to other outlets, but they’ve made more than 30 recipes in the past year. The only place to catch the latest flavor (until they run out) is down an alley and up a staircase on, you guessed it, Pasteur Street—144 Pasteur, District 1. pasteurstreet.com
QUAN UT UT | The original business of Bia Craft’s owners and the place to find delicious American BBQ and many of the same brews from Bia Craft. Their newer location in Binh Thanh has 16 tappers—168 Võ Văn Kiệt, District 1; 60 Truong Sa, Binh Thanh District. quanutut.com
LOUISIANE BREWHOUSE | Go see where it all began on the beach in Nha Trang. The restaurant only pours their own beers, and brewery tours are available—29 Trần Phú. louisianebrewhouse.com.vn
CHOPS | Their slogan? “Hops, Wheat, Meat.” The tiny restaurant is one of Pasteur Street’s bestselling locations with delicious food to match—4 Quảng An, Tây Hồ. chopsvietnam.com
HANG VUI CRAFT BEER RESTAURANT | The only place you can currently try Barett Craft Beer, whose brewery is right next door. Peek through the glass and check out the brewing equipment at work—2 Bán đảo Linh Đàm, Hoàng Mai.
24 Feb. 2016