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.
Japanese, US makers pour it on in Southeast Asia
UACJ, the biggest aluminum-rolling company in Japan, will spend more than 10 billion yen ($88.4 million) to expand a Thai sheet production plant by 70% in two to three years. Full-blown output began at this Rayong Province site last fall.
The company has already spent 55 billion on the plant, whose annual capacity now reaches 180,000 tons. It will install more rolling equipment and set up finishing lines in a 150,000-sq.-meter open space to bring capacity to 300,000 tons -- on a par with UACJ's biggest Japanese plant, a facility in Fukui Prefecture. UACJ was born from the 2013 merger of Furukawa-Sky and Sumitomo Light Metal Industries.
Those who can
UACJ sees the Southeast Asian and Australian markets for aluminum cans expanding 40% from current levels to a combined 26 billion cans in 2020. "We will ride a wave of growth," said Takayoshi Nakano, a senior managing executive officer.
Just as beverages in aluminum cans quickly gained popularity in Japan following their 1971 introduction amid a fast-growing economy, demand for the lightweight, corrosion-resistant containers is seen growing sharply in Southeast Asia.
"I stock up on cans of soda because my two elementary-school-aged daughters love cola and other sodas," a homemaker in Hanoi said.
Companies that make aluminum cans using sheet from UACJ are also expanding capacity. Ball, the world's leading can manufacturer, is seen opening its first Myanmar plant to produce aluminum beverage cans in the first half. Fellow American company Crown Holdings is strengthening Thai and Vietnamese facilities opened in 2013.
Japan's Showa Denko plans to lift capacity at a plant near Hanoi by about 50% to 2 billion cans a year by 2018, spending some 6 billion yen via a Vietnamese unit.
Vietnam consumes about 23 liters of carbonated beverages per person per year, according to online media giant Zing. While this comes in below the global average of 40, the market has expanded some 70% over the past five years.
Low-priced canned beer is also gaining traction. In Thailand, cans selling for the rough equivalent of about 100 yen -- about 10% cheaper than such major brands as Singha -- are increasingly popular among workers.
As retail chains modernize in Southeast Asia, beverages are increasingly available in aluminum cans rather than glass bottles and other containers. Although plastic bottle demand is also on the rise, aluminum can demand is growing sharply for beer because it must be protected from sunlight and kept from going flat.
Keeping their edge
China, which accounts for half of the world's aluminum metal output, has been ground zero for sinking materials prices. The country's economic slowdown and excessive equipment investment by its manufacturers have led to a glut in aluminum, just as it has with steel. Japanese and U.S. companies, which have a competitive edge over Chinese rivals in processing technology, are rushing to ramp up production in Southeast Asia. They are fully aware that the Chinese will likely go on the offensive in the region sooner or later, touting low prices.
Aluminum can production involves rolling and twisting sheet 0.2mm thick, and foreign objects can punch holes during this process. Companies including UACJ, having met Japanese customers' demand for quality, are skilled at eliminating impurities in the melting process. They have accumulated know-how in rolling processes and temperature management to control metal crystallization to fit specific applications and have kept the techniques in-house rather than risk disclosure by filing for patents.
25 Feb. 2016