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.
Vietnam. Carlsberg in talks over additional Habeco stake
“Negotiations will be carried out between related parties on October 31,” Deputy Minister of Industry and Trade Hoang Quoc Vuong told a press conference following the government’s monthly meeting on October 29.
Both Carlsberg and Habeco were not available for comment. Together with the Saigon Beer Alcohol and Beverage Corporation (Sabeco), the government is keen to divest from Habeco in 2016-2017.
Carlsberg has already been strategic shareholder of Habeco with a holding of 17.08 per cent since 2009. The sale of State capital in Habeco prioritizes strategic shareholders that participated in the previous equitization of the brewer, according to Deputy Minister Vuong.
Both Habeco and Sabeco have been equitized before, with the State still holding 81.79 per cent of Habeco, its employees 0.56 per cent, other shareholders 0.88 per cent, and its strategic investor, Carlsberg, 17.08 per cent.
Deputy Minister Vuong committed to “carrying out the sale of State capital in Habeco in accordance with the direction of the Prime Minister.”
In late-August Prime Minister Nguyen Xuan Phuc directed MoIT to immediately take steps to list and divest State capital in Habeco and Sabeco. The trading price will be used as a reference in the sale. The State capital in Habeco is estimated at VND9 trillion ($403.4 million).
The sale of State capital in Sabeco, meanwhile, will be carried out in two phases, with the first to divest 53.59 per cent of the State holding, worth VND24 trillion ($108 billion), this year, and the second to sell 36 per cent, or VND16 trillion ($720 million), next year.
On October 28, more than 231.8 million shares of Habeco (Code: BHN) officially debuted on the UPCom market with a reference price of VND39,000 ($1.74) per share.
Habeco’s shares proved popular on its first day of trade, quickly rising to its ceiling price of VND54,600 ($2.44) per share from its reference price of VND39,000 ($1.74). At the end of the October 28 session, excess demand for buying into Habeco stood at 200,000 shares at the ceiling price.
During the monthly government meeting in September, Deputy Minister Vuong revealed that the divestment plans for the two corporations may be delayed to 2017. However, Minister and Head of the Office of the Government, Mr. Mai Tien Dung, said that MoIT will be held responsible if the divestment and listing process are delayed.
In 2015 Habeco’s total revenue reached VND9.64 trillion ($432 million) and after-tax profit VND951 billion ($42.6 million). Habeco and Sabeco are Vietnam’s two largest beverage producers. Sabeco was the largest beer brewer last year, reporting production of 1.38 billion liters. The No. 2 position was taken from Habeco by Heineken.
Formerly a small brewery founded by a Frenchman named Hommel in 1890, Habeco was acquired by MoIT in 2003. In 1958 the very first bottle of Vietnamese beer was capped, called Truc Bach, marking a major turning point in the country’s brewing industry. Habeco has expanded to 25 wholly-owned subsidiaries in many provinces with famous products including Hanoi draft beer, Hanoi bottled beer, and Hanoi canned beer.
Carlsberg Vietnam comprises two entities, including trading and production companies. In 1993 it entered Vietnam via a joint venture called South East Asia Brewery and now owns 100 per cent of the company. In 1994 it acquired 50 per cent of Hue Brewery Limited (HBL), the market leader in central Vietnam.
In 2011 HBL became a wholly-owned subsidiary of Carlsberg when the company acquired the remaining 50 per cent. In 2008 Carlsberg created a joint venture with Habeco in the form of the Hanoi Vung Tau Brewery Company.
In 2009 it became a strategic investor in Habeco and in 2014 the Hanoi Vung Tau joint venture was converted into a fully-owned subsidiary of Carlsberg Vietnam.
Carlsberg Vietnam produces and markets Huda and Huda Gold in central Vietnam and Halida in northern Vietnam. The Danish brewer also produces and distributes Turborg and Carlsberg throughout Vietnam.
Carlsberg Vietnam currently has three breweries, excluding Habeco sites, and holds a market position of second, behind Sabeco. The company has a 34 per cent market share and its annual beer consumption per capita stands at 40 liters.
31 Oct. 2016