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.
Heineken eyes control of indebted Indian tycoon’s brewery
They said such a move would likely be a prelude to the Dutch drinks firm raising its stake in the maker of Kingfisher beer to above 50 percent, betting on a small but fast-growing beer market.
Heineken acquired a 37.5 percent stake in United Breweries in 2008 through its takeover of Scottish & Newcastle and has since increased its holding to 42.4 percent. With Mallya distracted by debts from a collapsed airline venture, this could be a timely grab by Heineken in a market that is growing much faster than the global average.
Two-thirds of Indians don't drink alcohol, often for religious or cultural reasons, but rapid urbanization and a rising middle class are changing consumer habits. India accounts for 13 percent of world beer consumption, and annual volume growth is expected to outpace the global average, and major markets like China, through 2019, according to ratings agency Moody's.
The sources said Heineken was considering asking Mallya to step down from the United Breweries board he chairs. Alternatively, it could call a shareholder meeting to vote on his ouster from a company his father built into a family empire.
The sources asked not to be named due to the sensitivity of the matter.
A Heineken spokesman declined to comment on any move to tighten control over the Indian joint venture, but said India remains an "exciting opportunity" for growth given its demographics and strong economic fundamentals.
Mallya and a spokesman for UB Group did not respond to emailed requests for comment.
KING OF GOOD TIMES
Banks, regulators and investigators in India have turned up the heat on Mallya, who inherited United Breweries at the age of 28 and led it on an ambitious expansion.
Creaking under mountains of bad debt banks themselves are under pressure from the government to chase up high profile cases like Mallya, whose Kingfisher Airlines collapsed in 2013 leaving unpaid wages and angry creditors.
Mallya has already been forced to give up control over United Spirits (UNSP.NS), part of his UB Group, to Diageo (DGE.L), which now owns about 55 percent of the company. He stepped down from the board last month, receiving a $75 million pay off. On Thursday, lenders to Kingfisher Airlines will auction off the company's Mumbai headquarters.
Mallya left India early this month - as banks sought a court order to confiscate his passport - and has not disclosed his whereabouts, but he has used his Twitter account to say he is not an "absconder" and would comply with Indian law.
The collapse of Kingfisher Airlines and the vast unpaid bank dues are a high-profile illustration of India's ineffective bankruptcy and debt recovery processes, and highlight the often close ties between politics and business.
A member of India's upper house of parliament, Mallya is known as the "King of Good Times" for his party lifestyle. He is often described as India's answer to British entrepreneur Richard Branson.
Mallya borrowed heavily to expand his airline's network, but a series of missteps, including the ill-conceived acquisition of a rival, saw the carrier grounded, some former senior staff said. They said Mallya micro-managed operations - from the selection of routes to the design of baggage tags - with no previous experience in the aviation industry.
"Unlike what he did in his liquor business, which is run by people who have the expertise, he got personally involved in the airline business .... a very, very wrong decision," said Sanjay Bahadur, who worked at the airline as a corporate affairs executive dealing with the government and regulators.
Mallya has blamed the airline's collapse on macro-economic factors and previous government policies.
17 Mar. 2016