The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
Chinese consumers demand premium beer products
Secretary General of CADA Yong He said the tremendous annual growth of the domestic beer market would no longer exist. Instead, it will experience periodic growth, as the Chinese market matures.
Chinese beer market overview
Five companies – Snow, Tsingtao, AB InBev, Yanjing and Carlsberg— now together make up 75% of the total market share, according to Shanghai-based Mintel analyst, Simon Moriarty.
“Carlsberg in particular has benefitted from the acquisition of Chongqing Brewery and a strategy of premiumization,” he said. “In terms of brand penetration, 80% of consumers drank Tsingtao in the 12 months to June 2015, 77% drank Snow, and 66% drank Harbin.”
In addition, only 1% of Chinese consumers drink international beer exclusively, according to Moriarty.
“In general, beer is a local product in China. It is not uncommon for some beers to be the most popular in the region of origin but unavailable elsewhere in the country.”
However, Chinese beers are cheaper and weaker than international beers on the whole, Moriarty added, because a lighter and sweeter flavor fits Chinese consumers. “Carlsberg launched Carlsberg Chill to tap into this market,” he said.
“Haitao” drives foreign beer imports
Chinese consumer insight expert, Danpeng Zhu, said beer companies in the country are redesigning their products in order to fit the consumer trends in 2016. Meanwhile, international brands will continue to grow in China, he said.
Even though most Chinese consumers don’t drink foreign beers because they don’t know much about them, Moriarty said, there will be growth especially in smaller, niche breweries from international craft brands, like BrewDog, thanks to Haitao.
Haitao refers to buying foreign products online from overseas or domestic websites in Mandarin. Moriarty suggested more international beers should take the opportunity to target consumers in China, who will be willing to try new products and purchase them online.
Overall, western trends will continue to influence Chinese consumers’ habits and lifestyles, Moriarty added, but the traditional strengthen of domestic beer brands will not be massively impacted.
Premiumization is the biggest upcoming trend
Whether it is trading up to new flavors, functional beers, international brands or limited edition beers, Moriarty believes premiumization will be a continued trend for Chinese consumers who want experience and flavor from their beer.
“Premium beer will grow by value to RMB 40.2 billion in 2020, from RMB 27.1 billion in 2015,” he said.
If it is assumed that craft beers form part of the premium segment because they are stronger and more expensive than mass produced lagers, Moriarty added, that segment overall has enjoyed a growth of 7.4% to a value of RMB 26.8 billion from 2011 to 2014.
In addition, Moriarty predicts that functional ingredients will be well received by Chinese beer consumers.
“So there is potential for 'beauty beers' and 'healthy beers',” he said. “Especially as the government's anti-extravagance campaign has cut down consumer spending on alcohol out of home, brands that offer a beneficial experience for relaxing at home will do well.”
13 Apr. 2016