World: Beer price increases contribute to weaker consumer demand
The current struggle across the brewing supply chain is rather clear: beer price increases have contributed to weaker consumer demand and it will take some time for the situation to normalize, RMI Analytics said in their latest report.
In June 2022, beer volumes were projected to approach 2.1 bln hl in 2027, with global malting capacity utilization reaching just above 92%. In June 2023, the forecast was still optimistic but there were already hints of a slowing malt demand situation. This growing concern was being confirmed by maltsters who were seeing firsthand the reduction in call-offs, driven by the sluggishness in beer sales.
However, in June 2023 there was still hope for a strong summer and with this there was some reason for optimism for a recovery. In reality, the summer rebound turned out to be a disappointment.
In July 2023, the Q2 financial reporting from major brewers confirmed this weak beer (and malt demand) reality. This forced a re-visiting of the beer volume growth projection through 2027. In parallel, the further malt capacity increases are expected to continue more or less as planned and together this reduces global malt utilization forecast to just over 90%, the analysts said.
While the trend of a gradually tightening malt utilization environment continues, the reality is more malt capacity exists than thought in earlier 2023. A rebound in beer demand is required in order to return the supply chain to the June 2023 standpoint, experts warn.
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