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.
AB InBev and Heineken joined to the craft revolution in Russia
Russia has no official statistics which would reflect the volume of the craft beer segment. Baltika believe that today the real craft producers own a share of about 2%, and it is almost 14 million decalitres. The difficulty in evaluating of this segment is largely due to the fact that there is no settled definition of craft brewing in Russia. Many local producers use a fashionable and beautiful term “craft”, replacing the previously popular term “live beer”.
At the end of last year, the Russian subsidiary of Anheuser-Busch InBev, introduced its range of varieties, “Sibirskiy kharakter”: it included ale “Amurskiy nrav” stout “Taezhnyy buriy” and IPA “Altayskiy veter”. The second similar episode was in March when the company Heineken started bottling of the ale "I Am Stepan Razin".
It is difficult to name the exact year of the beginning of the craft movement development in Russia. For example, the Jaws brewery in the town of Zarechny, Sverdlovsk region began to work in 2008, but initially it released varieties in the Czech-German theme. It is probably correct to consider Saint Petersburg the capital of the Russian craft revolution, where today the highest concentration of craft establishments and industries.
The number of craft breweries in Russia has increased by 7.5 times since 2010, from 13 to 98 in 2015, according to the market research of AB InBev. Year-on-year the number of such breweries has grown approximately in 1.5 times. The majority of them, 91 companies, located in the European part of the country. But not all of them have their own production, many of them just place orders for a contract bottling.
The emergence of craft breweries and bars and their production is typically mainly for cities with a million population where the standard of living of the population is traditionally higher. According to market participants, in bars, the price of craft beer of the national production vary from 150 to 350 roubles for a half-liter mug, occupying an intermediate position in cost between premium bottled beer from the shop and imported draught beer.
According to the rating of international service Untappd, which is compiled on the basis of assessments of the lovers of craft beer, the top 5 of the most popular craft breweries at the beginning of this week included AF Brew, VictoryArtBrew, Moscow StammBeer, Salden's and the St. Petersburg Paradox.
The asked major Federal retail networks do not hide the fact that work with craft beer is interesting to them and they see the potential of this segment. “A very promising direction,- said the representative of the X5.- In our opinion, craft should partially take away market share from imports. We expect the growth to 5-7% of total share of beer sales by the end of 2016”.
28 Apr. 2016