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.
Illinois Craft Brewers Fight To Protect Right To Distribute
The Chicago area is one of the hubs of the microbrew phenomenon, with bigger names like Goose Island, Half Acre and suburban Munster, Indiana's Three Floyds leading the way. Smaller brewpubs and craft brewers like Metropolitan Brewing, Finch's Beer Co. and Revolution Brewing also cater to lovers of the finely-honed hop.
But a recent federal court decision has thrown craft brewers into a tussle with beer distributors and massive conglomerates, in a battle that will play out in the state legislature this month.
The dispute began when Anheuser-Busch, now a subsidiary of the Belgian mega-corporation InBev, made a rather audacious business move. The company, like all beer makers, is forced to deal with a middleman: the distributor. After Prohibition, the United States set up a three-tiered system for distributing alcohol, where the producer sells to a distributor, who in turn sells to the retailer. Only the retailer has direct access to customers.
Like any good business, Anheuser-Busch wanted to cut the middleman out. It already owned 30 percent of City Beverage, a Chicago wholesale distributor, and made a play to buy the remaining 70 percent. But the Illinois Liquor Control Commission pointed out that this would violate the three-tier system, and wouldn't allow the deal to go through.
Here, InBev cried foul. Specifically, it pointed to the fact that in-state beer producers (like the craft brewers mentioned above) were allowed to get distribution licenses, circumventing the distribution requirement, and it argued that out-of-state producers were being discriminated against by not being afforded this right.
Judge Robert Dow, Jr. agreed with Anheuser. But what to do? In his opinion, he saw two options: "extension" (allowing out-of-state brewers to distribute as well) or "nullification" (forbidding all brewers from distributing).
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AdvertisementNullification would be a cruel blow to craft breweries, who would then have to pay a third party to distribute their beers, a burden some of the smaller brewers might not be able to support. Judge Dow ultimately decided on nullification, but he gave an out: "the Court temporarily stays enforcement of its ruling to provide the General Assembly an opportunity to act definitively on this matter if it chooses to do so."
In other words, the state legislature has the chance to step in.
A team of local beer aficionados called, appropriately, Guys Drinking Beer, is one of the groups lobbying Springfield to adopt a middle path, allowing the little guys to self-distribute while keeping the three-tier system in place for behemoths like InBev.
The legislation they back would allow any brewer that produces fewer than 60,000 barrels of beer a year to obtain a distributor's license. Brewpubs would also be able to distribute under the legislation.
This would exclude even some of the larger craft brewers -- Goose Island, for instance, produced 127,000 barrels last year. But it would protect the smaller breweries who would potentially be crippled by a requirement to use a third-party distributor. For example, Chicago's Argus Brewery could keep self-distributing, and Two Brothers out of Warrenville could continue to run Windy City Distribution, which brings fine craft beers like Stone and Half Acre to retailers around Chicago.
"See, we got to thinking - the Illinois Craft Brewers Guild, who wrote the current legislation before the Illinois House and Illinois Senate, has the backs of craft brewers in the state," the Guys write on their "Save the Craft" page. "And we know that the Associated Beer Distributors of Illinois are in the corner of distributors. And Anheuser-Busch has suits in their corner too. But what about the people who drink all that beer in the first place? We're the ones who will ultimately be impacted by whatever proposal the legislature approves."
In order to save the craft, the site directs readers to call and email their legislators, encouraging them to back House Bill 205 and Senate Bill 88, the legislation that provides for this middle way.
To learn more, or to join the fight, head over to Save The Craft for more information. And a generous hat-tip to Chicagoist, whose Karl Klockars is also one of the Guys Drinking Beer.
25 Feb. 2011