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.
Empire Brewing Company Begins Distribution to China
CenterState CEO, an independent economic development strategist and chamber of commerce in Syracuse, New York, made a trip to China in early 2015 with various community partners. David Katleski, owner of Empire Brewing Company and president of the New York State Brewers Association, was one of the delegation members to go on the trip. The group spent seven days meeting with twenty-five organizations; which included government officials and private business owners. The goal of these meetings was to identify partnership opportunities, establishing strong business connections with China.
While in China, David Katleski met Mr. Ji, founder of the Jing Wei Fu Tea Company. The two executives hit it off despite their limited verbal communication and decided to collaborate on a tea beer. 12 kilos of Fu Tea from Shaanxi, China, were shipped to Empire Brewing Company in downtown Syracuse where master Brewer Tim Butler and Assistant Brewer Nat TenEyke incorporated the tea bricks into an original Empire Brew. Dubbed Two Dragons in honor of Katleski and Ji’s mutual Chinese calendar sign, the first test batch had an exceptional reception and Empire Brewing Co. knew they had stumbled upon something big. It wasn’t long before David had set his mind on international distribution.
Jing Zhang, a Chinese citizen living in Syracuse, NY, heard the Two Dragons story on the news and approached Empire Brewing Company with her expertise for Chinese distribution. Zhang was quickly hired as Empire’s official Export Specialist, spending her first day on the job flying back to China with Katleski. The pair traveled across the country with the fresh Two Dragons brew, building brand awareness and valuable business relationships. A member of the Chinese Home Brewers Association helped to introduce Katleski with the owners of the popular Beijing craft brewery, Panda Brew. Since their inauguration, Panda Brew has been interested in introducing quality American style brews to a market that is just beginning to realize their love for contemporary craft beer. Katleski experienced an instant bond with Panda Brew’s Master Brewer Dinghao Pan and co-founder Yu Xia. A partnership was formed, and Panda Brew eagerly agreed to distribute Empire’s beer throughout China, as well as making ‘e’ draft and bottles available at all their pub locations.
Today, Slo Mo IPA was the first of Empire Brewing Co.’s beers to be poured from the taps at Panda Brew. Two Dragons will arrive in China on the next shipment.
“It’s exciting to share our passion and love for craft beer with all Chinese beer lovers.” Jing Zhang, Export Specialist, Empire Brewing Company.
“The current craft beer climate in China reminds me of what I witnessed in New York State, and the US, a quarter century ago. I believe that the Empire beer brand has solid potential in China and it introduces NYS craft beer to the Chinese. Two Dragons is a very unique East meets West collaboration of an American Craft Beer and Chinese Black Tea. Our good friends and importer Panda Brew in Beijing China has brought our dream to export Empire beer into reality. The partnership with Panda Brew has been deeply fulfilling on many levels. Our (Empire Brewing Company) Mission is in the Bottle. And our business philosophy is to Grow Local, Craft Global. Both our Mission and our Philosophy are embodied perfectly in this venture.” David Katleski, President and Owner, Empire Brewing Company.
“Empire is such an innovative and vibrant company and that carries over into all of it’s beers. My personal favorite is the Black Magic Stout, it brings such a great full flavor. Two Dragons is another excellent example from Empire that conveys an open minded sense of brewing.” Yu Xia, Co-Founder, Panda Brew
“Empire Brewing Company’s growth into foreign markets is really an exciting moment, and one that is possible for so many in our region. Today’s announcement that Empire’s beer has landed and been tapped in China is the culmination of an opportunity that David Katleski was bold and ambitious enough to pursue following a trip to China with CenterState CEO back in 2014” said Robert Simpson, president of CenterState CEO. “David had the drive and determination to seize a new growth opportunity and to ensure its success. I’m proud that CenterState CEO was able to play a role in making it happen. Congratulations to David Katleski and the entire team at Empire on this new adventure.”
4 Nov. 2016