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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.

Euromonitor: Japanese Beer Manufacturers Prepare for Potential Change in the Liquor Tax

For the first time in the last decade, the Japanese mid-priced lager segment posted positive growth in 2015. Although it was only a slight increase, at 0.3% in volume terms, this indicates that Japan's beer market has started to shift gradually. The category's growth in 2015 was mainly driven by a successful new launch, writes Euromonitor International.

2016-07-15_16h17_23

Focus on mid-priced lager

The Malt's, launched by Suntory Beer in September 2015, was the first new mid-priced lager brand by a major beer manufacturer in a long time. Targeting the younger generation, the brand appealed to consumers through its UMAMI flavour, generated by the special malt ingredient and a special fermentation process, and with the national boy band EXILE featuring in the promotional activities. The brand successfully attracted the younger generation to rank fifth in mid-priced lager in 2015, helping to drive the growth of the category in this year. Suntory, having been a leading player in premium lager but not so much in mid-priced lager, aimed to strengthen its mid-priced lager presence by introducing the modern The Malt's brand.
It is not only Suntory that is strengthening its business in mid-priced lager, but other Japanese beer manufacturers as well. Asahi Breweries, which has long led mid-priced lager with its flagship Asahi Super Dry, launched the new mid-priced lager brand The Dream in March 2016. The Dream looked to appeal through its rich and sharp texture as well as being a reduced-sugar product, featuring national rugby player Ayumu Goromaru in its promotional activities. Kirin Brewery also put a lot of resources into rejuvenating its mid-priced beer Ichiban Shibori through increasing promotional campaigns as well as introducing 47 variations of the brand customised individually to 47 prefectures across Japan.
Why are Japanese players focusing more on mid-priced lager? This is because of a potential change in the liquor tax on beer. Discussions are currently ongoing at government level about the tax scheme on beer. The government is planning to standardise the tax imposed on beer. The Japanese beer market is currently classified into three categories - "beer" (premium lager, mid-priced lager, ale and stout, according to Euromonitor International categorisation), "happoshu" and "New Genre" (both of which fall under economy lager, as classified by Euromonitor International) - with the liquor taxes currently imposed on each of the three categories being different. Taking the example of a 350ml beverage can of beer, a tax of ¥77 is imposed on "beer", ¥47 on "happoshu" and ¥28 on "New Genre", which leads to the higher price of "beer", in contrast to the lower price of "New Genre". However, under the proposed revisions a tax of ¥55 would be imposed on all types of beer. This would ultimately mean that the retail price of "beer" would be lowered, while that of "happoshu" and "New Genre" would increase, although the liquor tax is likely to be standardised in a phased manner over a period of five to seven years.

Mariko Takemura, Lead AnalystMariko Takemura,
Lead Analyst,
Euromonitor International
Although nothing has as yet been confirmed, the liquor tax scheme is thought likely to be revised in the near future. When the new scheme becomes effective, consumers will be encouraged to migrate to "beer". This will potentially change the landscape ot the beer market in Japan. In order not to be a looser then, manufacturers are keen to increase their shares in the biggest "beer" category, mid-priced lager.
15 Jul. 2016

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