The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
China. Crafting a new beer boom
"I had never imagined beer-drinking could produce varied experiences of tastes wildly different from one another. Until now, beer was just an economical refresher for me, particularly on scorching summer days. All those cans and bottles of different brands tasted the same more or less. But craft beer－phew, it's different, and like wines now ... high-end beverages, with qualities that match their high price," Li said.
In Shanghai these days, consumers can buy more than 200 varieties of craft beer at high-end groceries, brewery-run outlets, boutique dining bars or through home-delivery services. Prices range between 30 yuan ($4.5) and 100 yuan per liter.
Investors are eyeing the craft beer market as segment expansion appears on the horizon and demand for niche products rises, said experts.
According to Wang Deliang, brewery research director with the China National Research Institute of Food & Fermentation Industries, investments in the craft beer segment have been rising in recent years because of prospects of high profits of up to 30 percent.
Investments need not be high as in other liquor segments like whisky because craft beer, a niche product, is not produced on a mass scale, said Wang.
Take Beijing-based Panda Brew that started in 2013. It has so far received 20 million yuan from a handful of investors, including venture capital firm Tiantu Capital. Its capacity has increased to annual output of some 1,000 metric tons, which is supplied to 50 cities across China.
Seeing such market potential, large brewers are jumping on the craft beer bandwagon. Earlier this year, Guangzhou Zhujiang Brewery Group Co Ltd announced it will launch four facilities to produce craft beer and use online distribution channels to sell it.
Investments in consumption-driven sectors, particularly high-end food and beverages, picked up in recent years because consumers have been upwardly mobile. Supply-side reforms have also helped improve operational efficiencies, improving prospects for profits. An increasing number of consumers have been exposed to a wider range of choices due to travel for work, tourism or education, thus creating demand for new products in the domestic market.
The fizz in the craft beer market reflects consumers' rising individualism and assertiveness with regard to preferences. As the market opens up, more and more imported beer brands, particularly craft beer labels, have increased their offerings in China, according to a research note from consultancy Roland Berger.
While the traditional beer market in China is highly consolidated and dominated by a handful of players, the craft beer brewery market is highly segmented. According to data of Dianping Holdings, China's biggest online food service ratings website and a key information provider, China has more than 3,000 craft beer breweries. Their output and sales revenue are less than 3 percent of the entire beer market.
In the US, craft beer takes about 13 percent of the market share, according to an estimate in a research note of Founders Securities.
Unlike the mild-tasting canned and bottled beer, which is distributed through supermarkets under the big players' brands, craft beer usually has a stronger taste, a result of high-gravity brewing. Each variety of craft beer has a distinct taste as the raw materials used, brewing conditions, techniques, and brewers' flavors vary. Output is usually to the tune of just 1,000 liters per day.
"Limited supply, unique flavors, distinct experience and high-end branding all appeal to the younger generation of consumers who like to have something different," said Michael To, marketing specialist with Shanghai-based Focus Strategy Consultancy Ltd.
Shi Dechuan, a 34-year-old software programmer based in Shanghai, said craft beer made by a local brewery along the road to Yunnan province was most impressive. He discovered the beer while traveling in summer this year.
"You don't really want to drink the same beer when you travel to different places, so craft beer, which uses local fruits, tea leaves, malt and yeast, gives you that sense of locality, and makes a tour different," said Shi.
17 Oct. 2016