The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA 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 RussiaGermany 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.
India. SABMiller loses fizz in market race
SABMiller said it would be consolidating volume sales in the more profitable Indian states like Maharashtra, Karnataka, Haryana and Rajasthan and is not interested in a bruising battle for market share with arch rival United Breweries (UB). The world's second largest beer maker, which acquired Shaw Wallace Breweries and Foster's India in two expensive deals, had raised visions of mounting a serious challenge to the leadership of flamboyant billionaire Vijay Mallya-led UB.
The industry estimates suggest that India's beer consumption reported over 20% rise to reach almost 170 million cases (of 7.8 litre each) in the first nine months of the fiscal. SABMiller's volume sales during the period were estimated at just under 40 million, while UB sold a little over 90 million cases. It pegged SABMiller share at around 23%, which evaporated further in the standalone October-December quarter. Sources said SABMiller's overall domestic share had fallen to 19% in October and November but recovered a bit to end at 20% in December. Meanwhile, UB, makers of Kingfisher beer, may well be on its way to report an all-time high market share of 55% in FY11.
A SABMiller spokesperson, who refused to discuss specific numbers, said the company was focused on generating return on its $1-billion plus investments in India.
"We have made considerable investment in India over the past decade and a fair return on this investment is paramount. Growth in profitable volume is therefore the goal. In India, the state environments vary considerably. Focused growth by state therefore is a more meaningful measure of success than national share," he added. A senior company executive said the brewer hopes to report operating profit this fiscal after its profitability was mauled in the past two years.
SABMiller said it was reporting double-digit growth in India and continued to believe in the country's growth potential. Industry observers said the MNC brewer was lagging the market growth as well as that of the main rival--both of which are topping 20% year-on-year. This, they added, has seen many of SABMiller's frontline brands except Knock Out Beer finding it tough to hold market shares in their respective segments.
A section of the analysts also noted that SABMiller's latest stance challenged an established principle in the Indian beer market-that buying market share (through aggressive discounting) was a way to later-day profitability. This is possibly a reason why new brand introductions like Indus Pride and Castle Beer did not gain much ground.
"We work on very different yardsticks of profitability (on every hectolitre) compared to our rivals. SABMiller has multiple markets around the world where it can deploy the capital unlike its rival here. And capital goes where there is profitable growth," a senior executive said on condition of anonymity.
Globally, brewers like AB InBev and SABMiller, the two big acquirers in an ever consolidating industry, have checked what some analysts called "growth binge" and have controlled spending.
SABMiller blamed regulatory changes in key markets like Andhra Pradesh and Tamil Nadu-where the MNC brewer lost heavily with rivals -for loss in volume and market share. But it also appears to have surrendered leadership in most markets except Chhattisgarh. It has swapped roles with UB in several states such as Maharashtra, UP and Orissa where it was much ahead of the rival only a couple of years ago. UB, in which Dutch brewing giant Heineken owns an equal 37.5% stake, is nearly two-and-half times bigger by volume and market share now. One SABMiller executive looked at the Indian spirits industry to draw comfort: French whiskey giant Pernod Ricard rakes in more profit than United Spirits, which is six times bigger by volume. But this comparison may be flawed as Pernod Ricard, makers of Blender's Pride and Royal Stag whiskies, has been steadily growing volume and taking share away from the leader while running a hugely profitable operation. The question remains whether the beer mug is half full or half empty for SABMiller.
7 Feb. 2011