Russian brewers tap local market for hops as foreign supplies dry up

Sign up now for FREE unlimited access to Reuters.com

  • This content was produced in Russia, where coverage of Russian military operations in Ukraine is restricted by law.

MOSCOW, Sept 13 (Reuters) – Restrictions imposed on Russia have disrupted the supply of hops and equipment to local brewers, forcing them to seek domestic alternatives in their effort to maintain their range of beers, three brewers told Reuters.

Supply chain disruptions, sanctions over Moscow’s actions in Ukraine, and some Western companies choosing to halt supplies to Russia have all combined to reduce brewers’ access to American and European hops, but as competitors foreigners leave the market, some Russian companies see an opportunity.

Sergei Baranov, director of the Russian Khmelyoff brewing company, said they have used German hops for 15 years, but this year they tried hops from Russia’s Chuvash Republic, a region about 585 km (365 miles) east of Moscow.

Sign up now for FREE unlimited access to Reuters.com

“In principle, we are happy with the quality,” Baranov said, adding that more would be ordered.

He said logistics and payment issues meant Khmelyoff was unable to pay his partners in Germany directly, even though hop deliveries have not been sanctioned.

Russia, which imports the vast majority of its hops from the United States, Germany and the Czech Republic, does not produce a wide enough variety of its own hops to make more sophisticated types of beer, Vyacheslav Vetelev, founder of LaBEERint Brewery, told Reuters. .

“We can’t brew the same types of beer that our consumers are already used to, just Chuvash hops,” said Vetelev, who has used hops from the United States, England, Germany, New Zealand and Australia.

Vetelev, who described Russian businessmen as “iron people” given the almost annual challenges they face, said Russia needed to develop the hop varieties it produces.

“This will take years, it will not happen overnight.”

SILVER LINING

While craft breweries are struggling to adapt, some bigger players see opportunities as the market changes, such as Afanasy, a large brewery located in Tver, about 100 miles (160 km) northwest of Moscow.

“Now our direct competitors are gone and we have more shelf space for ourselves, and consumers are already paying attention to our product,” said CEO Vadim Deshyovkin.

Carlsberg foreign brewers (CARLB.CO) and Heineken (HEIN.AS) have stopped producing their flagship brands in Russia, while Anheuser-Busch InBev (ABI.BR) is trying to get out of a joint venture in Russia with Turkey’s Anadolu Efes. read more

Deshyovkin acknowledged that Afanasy is currently facing difficulties, but is building new supply chains, looking for new partners, and its Tver factory is operating near full capacity, producing almost 10 million dekaliters per year.

“I am sure we will overcome (the difficulties) next year,” Deshyovkin said. “We will adjust our business processes to supply missing components or raw materials and then come out of this current crisis successfully.”

According to the federal statistics service Rosstat, Russia produced 410 million dekaliters of beer between January and June 2022, 2.7% more than the previous year.

Sign up now for FREE unlimited access to Reuters.com

Reuters Reporting, Written by Alexander Marrow, Edited by Alexandra Hudson

Our standards: The Thomson Reuters Trust Principles.

Leave a Comment