Global hop marketA 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 RussiaGermany 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.
10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
India. Nitish Kumar’s liquor prohibition move leaves Carlsberg high and dry
"India is the most difficult market in the world but you can't do stuff like that," he told ET in an interview, referring to Bihar's imposition of prohibition. "It is very detrimental for investor confidence."
Three years ago, Bihar Chief Minister Nitish Kumar wooed the Danish brewer to invest in the state, persuading it to spend $25 million to set up a plant near state capital Patna in 2014. Then he became a champion of prohibition, enforcing it across the state this year after being re-elected in 2015. The decision, which will lead to a drop in revenue collections, may also lead to job losses as companies are left with little choice but to pull out.
"It was a sizeable market and investment but they decided to do prohibition in 12 hours," said Jensen. The company has no backup plan to cope with such a situation and it will likely dismantle the plant in the state if the ban stays in place.
Jensen's concern is shared by peers such as Diageo Plc, United Breweries and Molson Coors that have been running more than 70 distilleries and breweries in India's third-largest state by population for a decade or more. The units were not just meant to meet in-state demand but served as a manufacturing hub for neighbouring markets. Brewery companies had been keen on investing in Bihar due to the abundance of raw materials barley and wheat and the availability of cheap labour.
Late last year, the state government decided to prohibit country liquor and slash the number of shops selling alcohol to less than 700 from 4,000. All liquor sales have been banned since March as part of an election promise by Kumar, raising concerns about illegal alcohol. On Tuesday, more than a dozen people died in Bihar's Gopalganj district allegedly after drinking spurious liquor that may have contained toxic additives. United Spirits doesn't see any point in staying on. In the June quarter, the country's largest liquor maker, which is owned by Diageo, said it had made a one-time provision for inputs and inventory processing related to Bihar.
"Our medium-term intent is actually (to) exit the state of Bihar from all manufacturing and related activities," Chief Executive Anand Kripalu said on an investor call two weeks ago. "It is about just over 1% of our total business in terms of revenue and probably something similar in terms of profit right. So we believe, while it is an important state in terms of its contribution, it is not that material to our total business."
ORDER CHALLENGED IN COURT
The state is (or was) predominately a whisky market and accounted for 1.8% of the overall Indian-made foreign liquor market worth 317 million cases. In the October-March period, sales in the state amounted to 2.7 million cases, shrinking by 10% over the year earlier. Sector lobby groups have challenged the prohibition order in the Patna High court.
"We are fighting against the unjust ruling to ban all liquor instead of just country and illegal liquor," said All India Brewers Association Director General Shobhan Roy. "Our breweries are running full capacity and we have claimed about .`400-crore compensation for existing inventories and machinery."
19 Aug. 2016