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4-2017

Global hop market

A 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 Russia

Germany 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.

China. Alcoholic cocktails are gaining the market share, taking it from beer

The reasons for the fall of the beer market in China are interesting for both the brewers and analysts. For example, QL Money publishing among the main factors of the recession referred to bad weather, the reduction internal migrants’ income employed in construction, as well as changing in consumption patterns due to the change of generations.

The younger generation has always been the main consumers of beer. Thanks to the policy of family planning, which was introduced in China in the 1970-ies, the number of this consumer group from the 80-ies to 90-ies has decreased by 14%. As a result, there are only 188 million of potential beer consumers left in China, instead of 218 million.

In addition to the numeral reduction of the group, the change of tastes of today's youth is an important factor. The generation of the 90s prefers beer low-alcohol drinks to beer, especially the cocktails, the most popular of which is RIO. Thus, in 2014 the pre-cocktail industry growth rate was 200%. 80% of the market of low-alcohol products accounted for RIO cocktail, ice and other outstanding products.

Rio Cocktail China

According to our estimates, in 2013 the share of "non-core" beverages (which includes low-alcohol cocktails) in the general structure of alcohol was 2.95%. In 2015 it has grown to 4.2%.

The representative of the company Black Cattle Food Co., Ltd. noted that at the beginning of January 2015, the volume of cocktail market was about 50 billion yuan, with a growth rate of 30-50% in a few years, this category of beverages can easily enter the top three industries by volume of the market.

Cocktails surely win back position in the market not only beer and liquor, but other alcoholic beverages. The advertising on TV and bright, modern packaging of the drinks contribute to such a rapid growth. Moreover, now many girls can enjoy a pleasant taste low-alcoholic cocktail instead of beer with bitterness.

The consumption of cocktails and other alcoholic beverages has become a characteristic feature of Chinese youth of the 21st century. Today the cocktails, especially RIO, have become a fashionable trend that is only gaining momentum.

29 Apr. 2016

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