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4-2017

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.

Anheuser-Busch InBev Ranks the Highest in Terms of Gross Margin in the Brewers Industry

Below are the three companies in the Brewers industry with the highest gross margins. Gross margin represents the amount of revenue retained after deducting direct costs associated with producing the goods or services which led to that revenue. The higher the gross margin as a percentage of revenue, the better.

Anheuser-Busch InBev (NYSE:BUD) is highest with a gross margin of 57.9%. Anheuser-Busch InBev NV brews beer. The Company manufactures ale, lager, stout, and bitter beer. Anheuser-Busch InBev owns brands that are both nationally and internationally prominent. The Company has production plants in Europe, the Americas, and Asia.

Anheuser-Busch InBev (NYSE:BUD) has potential upside of 24.1% based on a current price of $51.76 and analysts' consensus price target of $64.21. The stock should find initial resistance at its 50-day moving average (MA) of $53.37 and further resistance at its 200-day MA of $56.69.

Following is Boston Beer (NYSE:SAM) with a gross margin of 56.8%. Yesterday, Boston Beer traded 195,000 shares vs. average volume of 156,000 shares per day. The stock outperformed the Dow (0.8% to the Dow's -0.2%) and outperformed the S&P 500 (0.8% to the S&P's -0.8%) during yesterday's trading.

Finishing up the top three is Molson Coors Brewing (NYSE:TAP), with a gross margin of 43.9%.

Molson Coors Brewing share prices have moved between a 52-week high of $51.11 and a 52-week low of $37.99 and closed yesterday at 8% above that low price at $41.01 per share. Over the past week, the 200-day moving average (MA) has gone down 0.6% while the 50-day MA has declined 1.4%.

11 Окт. 2011

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