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. Impressive Q3 for Sabeco as listing on horizon
In early October its CEO, Mr. Le Hong Xanh, said the beer giant may be listed on HoSE in late November or early December, according to Reuters.
“The listing could be in late November or early December, according to the consulting contract and agreement, but how fast it is depends on many other factors, like transparency in management and other conditions like tax,” he was quoted as saying.
Along with the Hanoi Beer Alcohol and Beverages Corporation (Habeco), Sabeco has been equitized before, with the State selling 5 per cent to Dutch brewer Heineken in 2008. The State still holds 89.59 per cent, other shareholders 5 per cent, and its strategic investor Heineken 5 per cent.
The Ho Chi Minh City-based beer giant is one of the last profitable State-owned assets in which the government expects to divest its entire holding by 2017, worth an estimated $1.8 billion.
The government has said it wants to list Sabeco before selling 53.59 per cent this year and the remainder in 2017, but Mr. Xanh said all options for divestment are being considered and the government has yet to approve any particular course of action.
Net operating revenue reached VND7.64 trillion ($342.2 million) in the third quarter, up 3.6 times year-on-year, with gross profit at VND1.13 trillion ($50.6 million), up five times year-on-year, its third quarter financial statement revealed.
During the July-September period, revenue from financial activities were down 50 per cent, mainly because of lower dividends and attributable profit, to nearly VND541 billion ($24.2 million). Cost of goods sold increased significantly, from VND73 billion ($3.3 million) in the third quarter of 2015 to VND119 billion ($5.3 million) in the third quarter of this year.
Administrative expenses also increased 21 per cent year-on-year, to nearly VND69 billion ($3.1 million). During the July-September period, after-tax profit reached more than VND1.23 trillion ($55 million), up 6 per cent year-on-year.
Total revenue stood at VND22 trillion ($985.44 million) with after-tax profit at VND3.2 trillion ($143.3 million), up 6.4 per cent year-on-year. Its assets totaled VND11.13 trillion ($498.5 million) as at September 30. Cash and cash equivalents were nearly VND5.76 trillion ($258 million), short-term financial investments more than VND3.09 trillion ($138.4 million), and accounts receivable VND1.99 trillion ($89.1 million).
Sabeco is a non-borrowing enterprise. Its short-term payables stood at VND4.06 trillion ($181.85 million) as at September 30 and mainly comprised trade creditors and provisions for payables.
Several major foreign brewers have been eyeing Sabeco since the government first earmarked it for equitization, but potential partners keen to exploit changing lifestyles and a fast-growing middle class have faced repeated delays.
Foreign brewers from Europe and Asia, including Japan’s Kirin Holdings and Asahi Group Holdings, Thai Beverage, and Heineken had previously expressed an interest in the stake sale. But Mr. Xanh said the process has restarted and interested buyers would have to bid again, declining to name any specific investors, according to Reuters.
Sabeco is owned and under the authority of the Ministry of Industry and Trade (MoIT) with brands such as Saigon Beer and 333 Beer. With a leading 43 per cent share in Vietnam's beer production, net profit jumped 27 per cent in the first half of 2016 to VND2.39 trillion ($107 million), and its CEO forecast that full-year profit may grow 14 per cent.
7 Nov. 2016