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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.

Thailand. Cash-flush ThaiBev itching for big-ticket acquisition deals

It will splurge cash on ASEAN targets.

Armed with its formidable $966 million cash pile, F&B giant Thai Beverage is forecasted to aggressively snap up Southeast Asian companies over the next four years.

According to a report by OCBC, the global beer industry has been awash with news of mergers and acquisitions of late, as more brewers turn to big-ticket deals to boost profitability and drive growth.

Thai Beverage is likely to go down the M&A path as well, particularly in light of the group’s Vision 2020 strategy.

“Following Fraser and Neave’s (FNN) sale of its 55% stake in Myanmar Brewery Limited to Myanma Economic Holdings (MEHL), FNN currently has a total cash of S$966m. We think that if necessary, FNN and Thai Bev partnering each other for potential acquisitions is a conceivable possibility,” said OCBC.

“We expect both entities to expand into their new markets - Myanmar, Vietnam, Indonesia and Philippines, but this would result in varying marketing expenditure as they strive to build brand presence in these countries, thus margins for the segment would be affected in certain quarters,” OCBC added.

In the meantime, ThaiBev will continue developing its core business, with new products being developed and distributed in its regional distribution network.

“We remain positive on the group’s long-term growth plans,” OCBC said.

14 Янв. 2016



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