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.
Beer tasting in different situations
By the perception of "quality" consumers generally understand their personal product taste appraisal. Conclusions about the beer quality are drawn on the basis of whether they like it or not. Recently the company "Romir" has conducted an experiment to investigate the effect of consumption atmosphere on the beer quality perception. As it turned out, the environment in which people drink beer significantly influences the subjective taste sensation.
The investigation was conducted in three stages. At the first stage the focus-groups were drawn, it gave a possibility to define main factors which affect the consumer's perception, such as: environment, emotional state aspects, atmosphere, reasons to consume beer.
During the second stage the main impulsive causes and the most typical and widespread situations of beer consumption were detected.
The final stage of investigation was an experiment which made it possible to define the environment significance in the process of beer consumption, criteria of its taste and quality estimation. 180 men aged from 18 to 55 took part in the experiment, they tasted beer "Baltika #7" in different situations. Under the experiment terms, participants did not know the brand of the beer they tasted.
- Men aged 18-55, beer consumers
- Product test - individual product testing in certain simulated consumption situations
- General selection scope - 182 interview (Moscow)
- Three homogeneous groups of beer consumers
- Each group tests beer in different places and situations
Simulated situation № 1: beer consumption at the bar.
The respondent is sitting at the bar, tasting the beverage. Several people can taste beer simultaneously at different tables. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. Taste test is conducted in the natural environment of the bar.
Simulated situation № 2: beer consumption in negative conditions.
Taste test is conducted in the warehouse premise. Several people can taste beer simultaneously. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. In 2-3 minutes after the beginning of taste test such a negative situation is created: an assistant begins to talk over the mobile phone loudly, shouting at his imaginary partner in conversation, cursing, standing at that near the respondents. After the telephone conversation the assistant remains in a stress state and expresses resentment over the imaginary situation (occupational or personal conflict situation). The interview is conducted in 7-10 minutes after the beginning of the taste test.
Simulated situation № 3: beer consumption at home.
The respondent is sitting on the sofa or arm-chair, tasting the beverage. 2 or 3 persons can taste beer simultaneously. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. After that the respondent is asked to go into another room for an interview.
The objectives and tasks of investigation
- To study the environment significance in the process of product consumption (beer)
- To study the environment effect in the process of consumption on the product perception
- Simulation of certain beer consumption situations
- Investigation of consumers' behavior peculiarities
- Evaluation of the most and the least important product characteristics when choosing and buying beer
- Estimation of product taste
- Estimation of consumption situations
- Detection of the intention to buy the product which was tested
Research summary (1)
- When choosing and buying beer the majority of respondents (57%) in the first instance have regard for beer taste, then for the brand, beer color, quality, alcoholic content and price.
- Beer taste and its quality are the determinants in choosing and buying the beverage for all the respondents. For the majority of respondents (84%) aftertaste plays a significant role. The most important characteristic for the respondents is the taste. Presence of froth and beer color appeared to be the least important, only the quarter of respondents named them.
Research summary (2)
Beer taste test
- Home situation and bar appeared to be the most comfortable environment for the respondents. The variant "uncomfortable" chose only those who tasted beer in the warehouse.
- In general the respondents liked the beer. At that the respondents who conducted the test at home more frequently than those who did at the bar and warehouse replied that they "liked the beer very much". The respondents who tasted beer at the warehouse replied more often than the respondents who tasted it in other situations that they "did not like" the beverage, or "did not like it at all".
- In the majority of cases the respondents gave the beer a rather high appraisal by all the suggested evaluation specifications. At home the respondents gave high appraisal of such specifications as taste, color and beer bitterness, at the warehouse they highly appraised beer aroma and aftertaste.
- The respondents who tasted beer at the bar more frequently than the others pointed at the pleasant bitterness, optimal malt flavour and the proof. At the warehouse the beer was evaluated as lighter with pleasant aftertaste and optimal bitterness. At home the beer was referred to as milder, with optimal purity of color. Purity and vehemence of beer aroma was described as "just what I wanted" more frequently at the bar and at home.
Research summary (3)
- At the bar the respondents called the beer modern more frequently but did not agree that it was the beer of a famous brand. At home the respondents stated that they were tasting the beer of a famous brand, the beer which creates an atmosphere of holiday, which is pleasant to drink and is suitable for a nice company. At the bar and at home the respondents more often than at the warehouse agreed that the tested beer was of good quality, that this beer is "for me". 30% of respondents who tasted beer at the warehouse did not agree that the beer they tasted created an atmosphere of holiday, the quarter of respondents did not agree that this beer is "for them".
- The respondents who tested beer at the bar and at home more frequently evaluated beer as not "the most expensive, but not the cheapest" one. The respondents who tasted beer at the warehouse more often than the others described the beer as cheap.
Research summary (4)
- The men who tasted beer at home stated that the beer is suitable for meeting with friends and for giving oneself a treat. At the bar the respondents claimed that the beer is suitable for meeting with friends and for drinking in a company with people they don't know very well. Those who tested it at the warehouse, on the contrary, did not agree that this beer is suitable for meeting with friends and for drinking in a company with unfamiliar people.
- In all the situations a significant part of the respondents (73%) stated that the tested beer is suitable for drinking after work or at the end of the working week. In return, half of the respondents did not agree that the beer is suitable for a date with a girl.
- The respondents who tested beer at the bar and at home more frequently intended to buy the beer they tasted. The men who tested the beer at the warehouse showed greater unwillingness to buy the beverage.
- The respondents who tested beer at the bar defined the optimal price for the beer as more expensive than those who did in other situations, at the range of 40-44 roubles per bottle 0,5 litres in volume, those at home defined the price at the range of 35-39 roubles and those at the warehouse - 35 roubles.
Beer choice: main characteristics of the product
The majority of respondents while choosing and buying beer pay attention primarily to the beer taste and then the brand, beer color, quality, proof and price.
Significance of the main beer characteristics
Taste, quality and aftertaste of beer play the most crucial role in the choice of the beverage, at that, the respondents called its taste the main characteristic. The least important turned out to be the presence of froth and beer color.
Evaluation of comfort during beer taste test
The respondents considered home and bar to be the most comfortable environment. Variant "not comfortable" chose only those who tested beer at the warehouse.
General evaluation of beer
On the whole, the respondents liked the beer. More often favorable reports were given by the respondents who tasted beer at home. The respondents who tasted beer at the warehouse more frequently than those who did it in other situations did not like the beverage or did not like the beverage at all.
Evaluation of the beer flavor profile
In the majority of cases the respondents gave the beer a quite high appraisal by all the suggested evaluation criteria. The respondents who tasted beer at home gave positive characteristics to the taste, color and bitterness of the beer more frequently than the others. At the warehouse higher marks were received by the beer aroma and aftertaste.
Beer type evaluation
The respondents who tested beer at the bar and at home more often evaluated beer as "not the most expensive, but not the cheapest" one. The respondents who tested the beer at the warehouse more often than the others called it cheap.
The respondents who tested the beer at the bar and at home more frequently intended to buy the beer they tasted. The men who tested beer at the warehouse showed greater unwillingness to buy the beverage.
Andrey Milekhin - the president of the holding company "Romir", Doctor of Science (Sociology), Candidate of Science (Psychology), professor at Moscow State Pedagogical University, academician of Russian Academy of Natural Sciences.
Igor Berezin - the president of Marketing Specialist Guild, member of the directors' board of "Romir", leading consultant.
Olga Gorelova - general manager of "Romir" Monitoring Standart.
On the whole, the respondents liked the beer. At that, quarter of participants who tasted beer at home claimed that they "liked it very much". The respondents who tasted beer at the warehouse more frequently (19% participants), than other participants "did not like" the beverage or "did not like it at all".
The survey results detected that the decisive factors in choosing and buying beer are, in the first place, its taste and quality. Characteristics for quality determination used by professional tasters, such as color, malt flavor, presence of froth, appeared to be less important for the participants. However, the place and conditions of taste test had an effect on the perception and appraisal of certain beer taste characteristics and influenced the product evaluation.
The participants who tasted beer at home considered it to be milder (47%), with optimal color intensity (68%). Aroma intensity and vehemence were described as "just what I wanted" more frequently at the bar (62% each) and at home (63% and 62%).
At the bar the respondents described beer as modern more frequently but did not agree that it was the beer of a famous brand. At home the respondents stated that they were tasting the beer of a famous brand, the beer which creates an atmosphere of holiday (63%), which is suitable for a nice company (72%) and which is pleasant to drink (80%). At the bar and at home the respondents more often than at the warehouse agreed that the tested beer was of good quality, that this beer is "for me".
The men who tasted beer at home claimed that the beer is suitable for meeting with friends (82%) and for giving oneself a treat (68%). At the bar the respondents stated that the beer is suitable not only for meeting with friends (79%), but also for drinking in a company with unfamiliar people (76%). Smaller number of participants who tested the beer at the warehouse agreed with these statement.
The majority of participants who tasted the beer at the bar and at home expressed an intention to buy it in future. On the other hand, those who tasted it at the warehouse more often than the others called the beer cheap and showed unwillingness to buy it.
Thus, the survey results confirmed that the consumption conditions have an impact on the taste perception and, correspondingly, on the beer quality evaluation. The highest appraisals by all the criteria were given to the taste test conducted at home because pleasant quiet environment helps to estimate the beer taste characteristics in full measure. Beer consumption in inappropriate conditions reduces performance measures of the tasted product as it does not make it possible to concentrate fully on the process of consumption and direct attention entirely to the taste.