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Global hop market

A 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 Russia

Germany 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.

Africa’s beer market still has plenty of room for growth

Brewers operating in the African market still have a lot of room for future growth as beer consumption on the continent is still far from saturation levels.

Nile Special is the flagship brand of SABMiller's Nile Breweries in Uganda.
Imara Africa Securities says in a new research report that although Africa is the sixth largest beer producer by volume, producing 4.8% of global beer after China (23%), USA (13%), Russia (6%), Brazil (6%) and Germany (5%), it has one of the lowest global per-capita consumption rates due to the meagre purchasing power of consumers.

Average annual per capita beer consumption in Africa is 6 litres, the lowest of all regions, with the exception of the Middle East, which is significantly lower owing to its large Islamic population. “There exists significant headroom for growth in sales volumes and profit margins for African brewers,” said Imara. “Only Namibia, Botswana and South Africa have made headway in increasing per capita consumption to near saturation levels.”

Growth potential is, however, not limited to alcohol consumption patterns. Most African brewers also produce soft drinks, such as Coca-Cola under licence, and non-alcoholic beverages such as water. Imara sees significant growth prospects in these categories as personal disposable incomes in most African economies improve.

“Africa as a continent is experiencing a ballooning population with growth rates of about 2.5% to 3%. In addition, bottom-heavy demographic charts also ensure that there is scope for a sustained demand pool,” Imara noted.

According to the International Monetary Fund, Sub-Saharan Africa has recovered from the global financial crisis and the region is now second only to Asia in its rate of expansion. Domestic demand growth remains robust while commodity prices are on a positive trajectory. Overall, real activity is projected to expand by 5.5% in 2011 and 6.0% in 2012.

“These conditions, in our view tend to fuel a rise in personal disposable incomes across various geographies and therefore are supportive of the consumer sector that includes breweries and beverage companies,” said Imara.

31 мая. 2011



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