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.
Singapore: APB’s attributable net profit 65% up in Q1
Mr Roland Pirmez, Chief Executive Officer, APB commented, “The significant top line gain was attributable to volume contributions from our new businesses in Indonesia and New Caledonia, robust organic growth mainly as a result of beer price increases in Papua New Guinea and Vietnam and stronger beer sales in Singapore and most of our regional markets, driven by keen festive demand.”
South & South East Asia (Singapore, Export Markets, Malaysia, Indonesia* & Sri Lanka)
Volume and PBIT rose 82% and 134% respectively. The results of the corresponding period last year excluded performance from Indonesia as consolidated earnings from the market were only taken into account from February 2010. Excluding the results from Indonesia, the region reported a volume increase of 12%, owing to stronger sales in Singapore and Malaysia.
Indochina ( Vietnam, Cambodia and Laos) and Thailand
Overall volume grew 18% due to stronger sales, particularly in Vietnam, in the run up to TET (Lunar New Year). As a result of this increase in volume, together with price increases in Vietnam, PBIT rose 40%. Excluding translation losses, PBIT grew organically by 56%.
North Asia (China and Mongolia)
Turning around from a loss of S$3.0 million reported last year, the region contributed a PBIT of S$0.2 million. The improved performance was attributable to favourable sales mix, lower overheads and exchange gain of S$1.6 million from the currency realignment of US dollar loans compared to an exchange loss of S$0.3 million last year. Excluding the impact from such exchange differences, a loss of S$1.4 million would have been incurred.
Oceania (New Zealand, Papua New Guinea and New Caledonia*)
Volume and PBIT grew 12% and 20% respectively. The improved earnings were mainly due to the new profit contributions from New Caledonia as well as price increases in Papua New Guinea. The results of the corresponding period last year excluded the performance from New Caledonia which was consolidated for the first time from February 2010. Excluding the results from New Caledonia in the first quarter ended 31 December 2010, PBIT grew 4%, owing to better margins in Papua New Guinea.
With a stronger Singapore Dollar and a high proportion of the Group’s earnings from outside Singapore, the financial performance will continue to be sensitive to currency movements in the countries where the Group operates.
* On 10 February 2010, the acquisition of a 68.5% stake in PT Multi Bintang Indonesia Tbk (“MBI”) in Indonesia and an 87.3% stake in Grande Brasserie de Nouvelle Caledonie SA in New Caledonia was completed. As of 16 April 2010, APB holds an effective interest of approximately 80.6% in MBI.
13 Feb. 2011