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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.

Craft and crafty beer in China

According to Hai Tong Securities research report, the craft beer market in China is growing rapidly and the gross margine and net profit margine in this sector amount to 50% and 30% correspondently. This is much more than the producers of the traditional bottle beer earn.

No wonder that in the conditions of sales decline in the industry, a lot of brewing businesses including the market leaders paid attention to this sector and started producing crafty style beer.

CraftTsingtao Brewery’s Laoshan factory has been in craft beer production since the end of 2015. Beer Tsingtao is currently supplied to bars in 16 communities.

Zhuajiang Brewery, belonging to AB InBev by quarter invested 250 mln yuan into building of new production lines for craft beer filling in Guangxi, east Wan, Zhanjiang, Hunan. In May 2015, the company launched high-end market for the Fort Snow - Craft series including puree beer, dark beer, and red beer.

Yanjing Brewery is also investing a lot of efforts into the craft beer development.

Boxing CatWhile the major beer players are striving to develop the niche which is new for them, in the central cities (Chongqing, Beijing, Shanghai, and Tianjin) the craft brewing is thriving. In Beijing the most popular brands are minibreweries Panda, Cow Beer Hall; and in Shanghai Boxing Cat Leybold Fresh Beer, Tap House Workshop, and pub Wuhan No. 18 are most demanded. Equally high interest among the Chinese is enjoyed by Nanjing High Master, Chongqing Fung Rudder, Chengdu Harvest, and some other brands. Even Tibet and Ningxia have their a craft of their own.

PandaPanda Craft Beer is surely an unrivaled leader in the Chinese craft beer market, with its 20 mln yuan sales revenue and the annual natural volume of 1 mln liters of beer. The brewery’s regional offices are located in more than 50 cities throughout the country, and the company is far from being complacent.

Panda Craft is striving to increase the number of outlets in big cities like Shanghai, Shenzhen and Chengdu and to woo tourists of Dali district. The craft brewing development is equally prospective both in big cities and in third-tier cities (medium-sized cities of each province). However, Chinese consumer awareness of craft beer is not clear. Few Chinese actually know what craft beer is. Besides, the local craft brewers still have to improve the branding marketing strategies in order to be able to compete with import beer like Goose Island Beer.

8 Jun. 2016

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