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.
Ukraine. The beer market is falling, but sales of some companies continue to grow
Shevchenko noted that from 1 July 2015 after providing of amendments to the Tax Code that equating beer to alcoholic beverages, 7 000 retail outlets have been closed in Ukraine, because many sellers can't pay 8 000 UAH for license. For wholesale it costs 500 000 UAH.
He said that now the issues of enhancing the tax burden on the industry are discussing at different levels. We are talking about a possible increase in excise duties by 25% on the recommendation of the International monetary Fund (IMF), and the introduction of a tax on packaging recycling. Now the share of excise tax per liter of beer is 13%.
In 2015, the workload of the Carlsberg brewery was 59%, which is 4.5 percentage points lower than in 2014. The sales decreased slightly slower than the market. The company's market share in value terms has grown by 1.4 percentage points to 29.6% according to the AC Nielsen company’s estimation.
According to Shevchenko, the significant changes were in the dynamics of price segments over the past year. The share of economy segment has declined from 31.7% in 2014 to 30.7% in 2015, mainstream declined from 44.5% to 43.4%, premium increased from 20.9% to 21.2%, and imports increased from 1.4% to 3.2%.
“Most of our innovations last year were aimed at the premium segment,” the CEO of the company added.
Meanwhile, smaller, but active competitors are breathing at the giants’ backs. The founder and CEO of the Persha Pryvatna Brovanya Company (with market share less 5%) Andrew Matsola says to the nv.ua newspaper that despite the falling market he have nothing to complain about.
Last year, the sales volume of his company grew by 18%. “This year the market will fall by 10%, but we plan to grow by 6-10%,” Matsola said.
2 Mar. 2016