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.
Russia. Investors eye Carlsberg views on rising costs
The price of malting barley EOBc1 is up by about 50 percent since a futures contract in this commodity was launched in May last year.
Investors want to know whether Carlsberg -- the world's No. 4 brewer -- can offset such cost increases with higher prices.
"One of the big issues will be rising raw material costs and how Carlsberg views it," Nykredit Markets analyst Ricky Rasmussen said. "The price of raw materials has risen a lot and it is hard to transfer such large costs to consumers."
"It will start being a concern if raw material prices do not stabilise soon," Rasmussen said.
Heineken (HEIN.AS), the world's third-largest brewer, said on Wednesday it would almost completely offset an expected low single-digit percentage rise in costs with higher beer prices.
"Investors will be looking for signs of recovery (in Russia), but they will also look at pricing, for a statement like we got from Heineken that they are comfortable that price increases will cover the costs that are coming through," said SP Equity Research analyst Carl Short.
Russia will also be a focus because Carlsberg is the No. 1 brewer in the country, with just under 40 percent of the world's fourth largest beer market.
"Anything negative regarding the recovery of the Russian market will be taken badly," Short added.
Around 80 percent of the Russian beer market is controlled by four brewers -- Carlsberg's Baltika, Anheuser-Busch InBev (ABI.BR), Heineken and Turkish brewer Anadolu Efes (AEFES.IS).
"I expect Carlsberg to say they see market growth this year (in Russia) and that the initiatives due to be introduced by the government will not be too onerous for the brewers," Short said.
Carlsberg is expected to report a 17 percent drop in fourth-quarter operating profit to 1.36 billion Danish crowns ($246.8 million), partly due to the absence of one-off items that boosted the year-ago comparison figures and partly due to higher costs, a Reuters poll of analysts showed. [ID:nLDE71E248]
Heineken's earnings on Wednesday beat full-year forecasts as cost cuts in Europe and savings from a large Mexican acquisition more than offset lower beer sales.
17 Feb. 2011