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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.

Carlsberg: Russia Growth Back on Track

The Russian beer market is showing signs of recovery this year, but brewers are suffering from rising costs following last year's poor harvest in Russia, which is leading to price increases for consumers, said Carlsberg A/S Chief Executive J?rgen Buhl Rasmussen.

"The last couple of years have been challenging, but the market is now back on the growth track," Mr. Buhl Rasmussen said in an interview.

Copenhagen-based Carlsberg, which holds a market share of around 40% in Russia through its ownership of the Baltika Brewery, Russia's largest beer producer, expects Russian beer consumption will return to pre-crisis levels by 2015.

Average Russian beer consumption reached almost 80 liters per head prior to 2008, when oil prices reached record highs fuelling Russia's energy-dependent economy. In some big cities like St. Petersburg, consumption reached 100 liters per person.

However, a three-fold increase in beer tax at the beginning of 2010, which let to a 25% rise in beer prices, coupled with the economic downturn caused average beer consumption to fall to just 66 liters a person last year.

Mr. Buhl Rasmussen forecasts a small growth in the market this year, but expects an annual growth rate of between 3% and 5% in the medium term. Russian beer consumption grew 1.5% in the first quarter, but an unusually cold April could affect the second quarter, the CEO said.

The beer market's recovery has been slowed by escalating costs. Commodity and labor costs in Russia are expected to rise 10% this year, compared to an average increase of 5% in other markets, Mr. Buhl Rasmussen said.

Rising commodity prices are causing problem across all regions, but a severe drought last summer that cut Russia's grain harvest by a third has forced the brewer to import grains.

"The hardest hit region is by no doubt Russia," Mr. Buhl Rasmussen said. "We can't absorb the higher costs. In the end, the consumers will have to pay for the rising commodity prices." So far this year, Carlsberg has increased its beer prices in Russia by 7% to 8%, he said.

21 Июн. 2011



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