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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.

Vietnam. Beer market is not as attractive as wine and soft drinks sector’s

Vietnam beverage industry exisited for a long time but has been developing fast over more than a decade now, underpinned by:

- Policy of innovation,
- Joining in many FTAs in the world,
- Fast developing economy, improved demand and people's condition of living;
- Growing international tourism and FDI.

Thus, currently, a large number of factories were built with equipment and modern technology, making a variety of products with high quality, high margin and able to contribute largely to the state budget. Vietnam beverage market has gradually met the demand of domestic market, replaced partly import and increased export. Beer and beverage sector still take up major share while alcohol hold the small proportion in the whole industry.

Beer production in Vietnam depends on imported raw materials. With large-scale production and stable growth, domestic beer sector has met the domestic growing demand, especially in the high-end products such as bottled beer and canned beer. This helps reduce the imports and increase exports, contributing to the improvement of export turnover of the sector.

Habeco and Sabeco are exclusively dominant for the low-income segment while Heneiken and some other FDI enterprises, such as Carlsberg and Sapporo, compete in the middle-income segment. There are many brewery projects built by domestic and foreign firms, resulting in the excess of in the next 5-10 years.

With the advantage of natual resources like abundant mineral water, various fruits, Soft drink market has large-scale, high rate of the growth and gradually met the domestic demand. In the sector, RTD tea, Bottled water and Carbonated Drinks take the largest proportion of consumption. For most of the Soft Drinks, off-trade distribution is more efficient than on-trade. Because of several products and a large number of companies, competition is becoming more intense. The strong development of FDI hurts domestic bussiness, Export of Soft Drinks increases rapidly. Asia such as Thailand and Hong Kong is the fastest growing market for exporting Juice and importing Carbonated Drinks.

Alcohol market size is small with a decrease in production and consumption. Domestic products gain the low export turnover and can not meet domestic demands for high-end one, resulting in a rise in alcohol import.

Domestic Wine market is full of potentials for development as it primarily serves clients in the middle-class and above and is increasingly favored by Asian markets. However, customers in the elite mainly use wine imported from countries with tradition of wine-making, such as France, Chile, Spain and etc.. Domestic Spirits market is underdeveloped, dominated by premium Spirits from Europe and the Americas.

Among top enterprises in the industry, there are only a few domestic enterprises with large-scale and strong brands to compete with FDI firms. The remaining is small businesses with weak competitiveness, lack of capital for expansion, as well as building a distribution system and developing brand. However, enterprises are generally maintained stable trade with revenue up slightly thanks to the increase in sales costs including marketing cost, promotion cost and agent commissions. Hence, profits of enterprises are all increase and inventory turnovers are rather fast, especially in Beer and Soft drink sectors. Besides, Beverage sectors have relatively high self-financing rate, good liquidity and high asset utilization. Businesses have been focusing on investing to expand production and applying modern machinery. However, inventories are still very high in Alcohol. Though Beer market is growing, its profitability and investment opportunities are not as attractive as Wine and Soft drinks sector's.

15 Апр. 2016

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