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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.

Is the Thirst for Craft Beers Changing?

The beer-making industry is generally characterized by steady and predictable growth, yet this year major brewers have had a tough time meeting expectations so far. The sector has been slow to recover in the wake of the financial crisis. In the first quarter, three of the four major U.S. beer-makers failed to meet their target earnings per share.

Leading the market in craft brews for years, Boston Beer Company (NYSE:SAM) has had a particularly tough time. Their estimated EPS was $0.45, yet the company only managed an EPS of $0.28. Part of the problem for Boston Beer might be that the demand for craft beers may have declined in favor of more affordable and recognizable brands, such as Budweiser (NYSE:BUD).

In spite of the disappointing first quarter EPS of its competitors — Anheuser-Busch InBev (NYSE:BUD), Molson Coors Brewing (NYSE:TAP), and Boston Beer (NYSE:SAM) — Constellation Brands (NYSE:STZ) beat estimates. Constellation differs from other companies, however, in that they produce wine and spirits as well as beer. In addition to the trend of consumers opting for Budweiser over say Dogfish Head, beer drinkers also seem to be preferring smaller brews to national giants, as evidenced by the success of Craft Brewers Alliance (NASDAQ:HOOK), for which revenue rose 18% and shipments increased 15% in the first quarter.

31 мая. 2011



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