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.
Investing: Molson Coors is expanding globally
Answer: You might not have expected Russians to be drinking Coors Light this winter, but this giant global brewer began distributing the beer in Moscow last year.
The company also entered a joint venture with China's Si'hai Beer Co. to produce Coors Light and market it using a Chinese name that translates as "silver bullet."
The Denver company, formed by the 2005 merger of Adolph Coors Brewing Co. and Canada's Molson Inc., has cut costs and improved efficiency. Since 2008, it has had a joint venture, MillerCoors, with SAB Miller's U.S. business.
With brands such as Molson, Coors, Carling, Keystone and Blue Moon, Molson Coors holds about 40% of the beer market in Canada, about 30% in the U.S. and nearly 20% in Britain.
But Molson Coors must compete against giants such as Anheuser-Busch InBev, which was formed when Belgium-based InBev acquired Anheuser-Busch.
The beer industry's prospects depend heavily on the outlook for the restaurant industry, which is expected to show improvement along with the economy.
Because the beer market is mature and slow-growing, an evaluation of Molson Coors shares as an investment should include an assessment of whether it might be an acquisition target for another brewer.
Shares of Molson Coors recently were down about 8% this year, partially because of a drop in fourth-quarter earnings, after climbing 11% in 2010.
Last year, the company earned $708 million, down 1.8% from 2009. Sales rose 7.3% to $3.3 billion.
The consensus of analysts with ratings on Molson Coors shares is between "buy" and "hold," with two "strong buy" ratings, five "buys" and seven "holds," according to Thomson Reuters.
Question: I am a shareholder in the T. Rowe Price Blue Chip Growth fund. What is your opinion of its prospects?
Answer: It should provide no surprises, which is a good thing.
This $12-billion fund, which focuses on high-quality companies, has been managed by Larry Puglia since its 1993 inception. The T. Rowe Price fund family overall has a reputation for disciplined stock picking and relatively reliable returns.
The portfolio gained 31% in the last 12 months and had a three-year annualized return of 4%, results that ranked it in the top one-fourth and one-third, respectively, of funds that focus on large-capitalization "growth" stocks.
"This fund features market leaders well-positioned in their industries, such as Apple and Google, and is diversified among many companies," said Katie Rushkewicz, mutual fund analyst with Morningstar Inc. "We consider it a good, long-term core holding for an investor."
Other major stock holdings in the portfolio include Amazon.com Inc., Danaher Corp., Schlumberger Ltd., Franklin Resources Inc., Qualcomm Inc. and Starbucks Corp.
There's no sales charge on purchases of fund shares, but one's initial investment must be at least $2,500. The fund last reported that its expenses equaled 1% of its assets.
13 Feb. 2011