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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.

China. New CR Snow team will have to work on the company’s profitability

The merger of two brewing giants AB InBev and SABMiller against the background of the Chinese beer market drop provided an opportunity for China Resources Beer cheaply buy back shares from the foreign partner.

CR Snow Breweries has already formed a new management team which will determine the future policy of the company. In this regard, Thailand Securities Source analysts evaluated the prospects of the brewery’s development.

CR Breweries has a great opportunity to improve the rates of its activity, if they focus on stable growth of business profitability. So far, CR Snow net profit margin is only about 3.2%, which is less than that of Tsingtao and Yanjing Brewery.

The experts see two main reasons for this low profitability of the brewery: 1) the rapid expansion of the company; 2) low price of the wine (2500 yuan), which competes with beer.

Currently, the purchase of CR Snow and the change of management will contribute to the consolidation of forces and increase the profitability of the company.

4 Мар. 2016



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