Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
Feed barley potential rises on the back of demand for malt barley in China
But some hope it may also open the door for increased exports of lower quality feed grade barley.
China is the world's largest consumer of food and beverages and is one of the fastest growing food and beverage markets in Asia.
According to global market research group Euromonitor International, Chinese expenditure on food and beverage products in 2016 is expected to reach US$976 billion.
Sales of mid-range and premium beers are growing, which groups like the Australian Export Grains Innovation Centre (AEGIC) hope will translate to more exports of Australian barley to China.
Australia is a dominant player in world barley export markets, representing more than 40 per cent of the world's malting barley trade and 20 per cent of the feed barley trade.
China and Australia 'mutually dependent' barley markets
AEGIC chief executive officer Richard Simonaitis recently returned from conducting workshops in China with Chinese brewing and malting companies.
He said the workshops were intended to help Chinese brewers and malt processors understand the technical potential and value of the varieties, which included La Trobe, Flinders and Spartacus.
"Providing this type of in-market support is crucial to ensure Australian grain is well understood and valued by our major customers," he said.
More than half of the malting grade barley grown in Australia currently goes to China.
"It takes about 30 per cent of the Australian crop, which is the biggest export destination for barley coming out of Australia by a long streak," Mr Simonaitis said.
"It's really quite a strong market for it, we're mutually dependent on each other really. China needs Australia's malt barley, just as much Australia needs that market."
But a spin off of AEGIC and other organisations building relations with China around malt barley could be increased demand for Australia's lower quality feed barley.
"There was a lot of enquiry about feed barley," Mr Simonaitis said.
"There's a very strong feed industry in China: they use a lot of corn, they use a lot of soybean meal, they use a lot of sorghum.
"They're just starting to understand that feed barley can help buffer some of the mildly toxic effects that badly stored grain can have," he said.
"It's a calming additive if you like to go into the feed rations, which helps take away some of the impacts of poorly stored grain coming out of China.
"It certainly sounds like there is a good understanding of the value of Australian feed grain and of course feed barley is the one that we have a readily available supply of."
18 Jul. 2016