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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.

C&C Group announces distribution partnership with Vandergeeten in China

Tennent’s is to be distributed across China after owner C&C Group agreed a strategic partnership with Beijing-based import business Vandergeeten.

Irish firm C&C Group and Vandergeeten have signed a three year distribution agreement for the Tennent’s brand portfolio in the world’s biggest global beer market.

Joris Brams, Managing Director of C&C Group’s International Division, said the company saw the deal as part of a long-term growth plan for the Tennent’s brand.

C&C“This is a fantastic opportunity for C&C Group to work in partnership with a well-established company in China with a very strong reputation in the drinks business,” he said.

Initially Vandergeeten will launch Tennent’s 1885 Lager, Tennent’s Stout, Tennent’s Whisky Oak Aged Beer, Tennent’s Scotch Ale and Tennent’s Extra into both the on premise and off premise channels nationally in China.

The deal is the fourth such partnership C&C Group has signed for Tennent’s in recent months. Last week it revealed Scotland’s top selling beer brand would be brewed in India in a deal with Mahou San Miguel.

Vandergeeten began importing from Belgium and Western Europe in 1994 and now has more than 90 brands in its portfolio, making it one of the most active distributors of specialty beer in China.

Yu Xiaoning, chief executive officer of Vandergeeten, said: “Working with C&C is an exciting opportunity for us to even further diversify our wide range of premium European beers. We’re confident that in cooperation with C&C, we can develop Tennent’s into a popular and successful brand enjoyed by customers all throughout the country.”

To achieve nationwide distribution for its range, Vandergeeten said it had offices in Beijing, Shanghai, Guangzhou and Shenzhen, as well as regional representatives and sub-distributors covering all of China.

C&C’s strategy for growing the Tennent’s brand internationally comes as global alcohol consumption fell for the first time this century. Euromonitor International recently reported that alcohol in China declined by 3.5 per cent because of a heavily-reported clampdown on extravagance.

However, imported beer into China continues to grow, said Mr Brams. “The market for imported premium beers in China has enjoyed stellar growth over the last five years and this partnership with Vandergeeten will ensure that the Tennent’s brand portfolio is well positioned for long term growth in China.”

C&C Group recently reported overall group operating profits down 10.3 per cent to €103.2m for year ending February 29 2016. It posted revenue of €662.6m.

Encouragingly though, the group saw volume growth in the potentially lucrative Asian market rocket by 66 per cent. Currently, just ten per cent of Tennent’s is sold outside of the Scottish market.

C&C Group chief executive Stephen Glancey said that although the export market for Scottish alcohol was dominated by whisky, there was increased demand for Scottish beer brands.

“The desire for authentic high quality Scottish brands travels across the alcohol space and we are seeing increased potential for the Tennent’s brand in new markets. Tennent’s has a good franchise because of the red ‘T’ and it’s been around historically, and Scotland is well respected for its food and drink,” he said.

25 May. 2016

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