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.
Russia. The legislators had mercy for craft brewers
Today Viktor Zvagelskii, deputy chairman of the Committee on Economic Policy and Entrepreneurship introduced to State Duma the bill that provides amendments to the law on state regulation of production and turnover of alcohol. The document includes release of the producers of beer and beverages of natural fermentation with production capacity of less than 30 hectoliters per year from the need to connect to USAIS (Unified State Automated Information).
Mr. Zvagelsky hopes to correct a legal case that has emerged in the alcohol legislation that already provides that the main process equipment of the enterprises does not require connection to the accounting system. “However, since 1 January 2016, the purchase, storage and delivery of such products to wholesalers have to be registered in the system, which leads in practice to the fact that small producers are forced to connect to it," the Deputy says. Thus, the small entrepreneurs have lost their preferences provided by the state and have already spent 6 billion rubles on installation of USAIS.
The maintenance of the new system costs the producers additional 3 billion rubles per month, Alexei Nebolsin the member of the presidium Opora Rossii adds. “The same sum is payed by all small producers of beer and cider as excise taxes per year,” he said. According to “Opora”, this year in February, there were 991 manufactures of beverages of natural fermentation with capacity up to 30 thousand hectoliters, their products were sold by 3, 5 thousand wholesale companies and 117 thousand retail outlets. “The market of craft beer and cider is extremely small, so there is no counterfeit, as it is economically inexpedient. So why do we need the account, which costs more than all revenues from excise taxes make up?” Mr. Nebolsin is perplexed.
In January of this year, beer and cider mini-manufactures registered a decrease of turnover by 40% - 60%, the number of wholesale companies in this field has reduced by 50 %, stated in the explanatory note to the bill of Victor Zvagelskii. According to a survey conducted by “Opora Rossii” 25% of beer and cider producers have stopped their activity due to the introduction of USAIS, 27% reported a turnover decline by 25-50%. A similar decrease in turnover took place in 44% of wholesalers and 24% of stores, 30% of wholesalers and 20% of retail companies reported a decrease in turnover by 10-25%.
22 Mar. 2016