10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
Beer market of Vietnam: “Young tiger”Vietnam is one of the few big beer markets that continue to grow steadily. The beer popularity results from its low price, street consumption culture, and social motives. The outlooks of beer market as well as the Vietnamese economy inspire optimism, though the country is heavily dependent on export of goods. The state regulation can be called liberal, but the key risk for brewers is harbored in intensive rising of excise. Within TOP-4 there are two leaders, Sabeco and Heineken that grow at the fastest rates. The first company effectively employs its capacities, the second one focuses on marketing technologies. Almost 80% of the market belongs to century-old brands, yet the middle class and the youth are shifting their interest toward international premium that is growing taking share from the mainstream.
Pub closures have hit the Guinness brand in Great Britain
Guinness brewer Diageo said that although its Guinness Surger off-trade brand achieved distribution in a further 9,500 outlets, it was not enough to offset the “continued contraction of the on trade with, on average, 29 outlets closing each week”.
Guinness marketing spend was down as the brand switched its sponsorship programme from the rugby premiership to the Six Nations and international rugby.
Overall in Great Britain, Diageo saw net sales up 1% with volumes down 1% for the period — a performance it classified as “moderate net sales growth achieved as the economy continued its fragile recovery”.
Net sales of Smirnoff dropped 16%, attributed to “stock building in fiscal 2010 ahead of the anticipated duty increase in the emergency budget in June and a loss of share in the on trade”.
Margin was also eroded on Smirnoff as "price conscious consumers in the off trade bought more on promotion" rather than in the on-trade.
Net sales of Baileys grew 2% fuelled by its “Let’s do this again” campaign. Net wine sales grew 18% due to a price increase on Blossom Hill and strong sales of its higher value wines.
Marketing spend increased 3% with investment in Smirnoff up 4%, focused on its “Nightlife Exchange Project” and its tie up with Coca-Cola.
Globally, the drinks giant reported organic net sales growth of 4% with organic marketing spend up 10%. Organic operating profit grew 2%.
“Momentum is building in our business,” said chief executive Paul Walsh. “Our top line performance was stronger and price/mix improved.
“We have increased marketing spend significantly, up 10%, but in a very focused way. 35% of the increase was behind strategic brands in US spirits to build the brand equity as we move away from promotional support and over 60% of the increase was on our brands in the faster growing emerging markets.
“Despite the economic weakness in much of Europe, our first half performance gives me increased confidence that we will improve on the organic operating profit growth we delivered in fiscal 2010.”
10 Feb. 2011