The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
AB InBev Fourth-Quarter Profit Beats Estimates on Cost Savings
So-called normalized earnings before interest, tax, depreciation and amortization rose 25 percent to $3.9 billion in the three months ended Dec. 31. The median estimate of six analysts surveyed by Bloomberg News was $3.4 billion. AB InBev increased its dividend to 80 cents a share from 38 cents.
“The numbers seem reasonably good,” said Trevor Stirling, an analyst at Sanford C. Bernstein in London. “The big surprise for me is the doubling of the dividend.”
AB InBev, formed when InBev NV bought Anheuser-Busch Cos. in 2008, has pledged to save $2.25 billion by the end of 2011 as it closes breweries. Savings from the purchase in 2010 were $620 million, exceeding the company’s $500 million target, and the brewer aims to deliver at least a further $270 million in 2011.
AB InBev gained as much as 3.7 percent in Brussels trading and was up 1.09 euros, or 2.7 percent, at 41.26 euros at 12 p.m.
The dividend exceeded the 66-cent average estimate of 27 analysts compiled by Bloomberg. The payout level was increased as debt was cut by $5.5 billion to $39.7 billion in 2010, Chief Financial Officer Felipe Dutra said today on a conference call.
“We remain committed to bringing our net debt-to-Ebitda to below two times” by the end of 2012, Dutra said today, referring to the company’s normalized Ebitda figure. “We’re fully on track to get there.”
AB InBev said it expects the volume of beer sold globally to be “soft” in the first quarter as U.S. unemployment and heavy rains in Brazil drag on sales. The company sees “momentum building from the second quarter into the second half.”
Fourth-quarter revenue rose to $9.5 billion. Excluding acquisitions, sales growth was 5.9 percent, more than the 4.3 percent median estimate of eight analysts surveyed by Bloomberg. The volume of beer sold on the same basis rose 1.3 percent as higher sales in central and eastern Europe and Asia offset weakness in the U.S. and western Europe.
“Our financial results for 2010 showed very good progress in spite of the persistent challenging economic environment in several of our markets,” the company said today. “However, our culture is one of continuous improvement and there are several areas where we know we can still make progress.”
The volume of beer sold in North America, where the brewer gets 44 percent of profit, slid 1.3 percent as high levels of unemployment in the U.S. weighed on consumption.
“The economic outlook for the U.S. obviously remains unclear,” Dutra said today. AB InBev “believes economic recovery in the U.S. is a question of when, and not if.”
The brewer raised prices in the country in September, leading to a loss of volume in its so-called “sub-premium brands.” The Bud Light, Stella Artois and Michelob brands increased market share. Budweiser’s share of the market dropped, though the decline “decelerated” toward the end of the year.
Fourth-quarter net income slid to $968 million from $1.28 billion a year earlier, the company said.
Volume at the Latin America North unit rose 3.4 percent as beer increased 3.5 percent and soft drinks gained 3.4 percent.
The volume of beer sold in Brazil, the “main source of profit growth” outside the U.S., according to Bernstein, rose 11 percent in 2010 as the company started distributing beer in 1 liter bottles and sold products including Antarctica Sub Zero and Skol 360. AB InBev had an average 70.1 percent share of the Brazilian beer market, it said, although it lost 20 basis points of share in the fourth quarter compared with a year earlier as it increased prices ahead of its competitors, it said.
The volume of drinks sold in the Latin America South division rose 2.6 percent in the quarter. A 5 percent increase in beer volume offset a 1.3 percent decrease in soft drinks.
Fourth-quarter sales volume in Western Europe slid 3.6 percent, hurt by snowfall and icy conditions across the region. Beer volume slid 10 percent in Germany and Belgium amid “tough competitive conditions.” U.K. volume rose 2.4 percent.
Asia Pacific volume gained 8.4 percent in the last three months of the year, aided by 8.6 percent growth in China, where the company introduced its Budweiser Lime beer. AB InBev said on Feb. 14 it will acquire a 25 percent stake in Dalian Daxue Brewery Co. from Kirin Holdings Co. as part of a “strategy for expanding its footprint” in the world’s largest beer market.
The amount of Budweiser sold grew 1.7 percent in 2010, according to the brewer, and the brand expanded its market share in the U.K., China and Canada. The company aims to start selling Budweiser in Brazil in the second half of this year.
“Plans are in place, programs are in place -- we are very excited about that opportunity,” of beginning to sell Budweiser in the country, CFO Dutra said. “The brand has stronger-than- expected brand awareness given the influence of the U.S. across all Latin American countries. Brazil is not an exception.”
Dutra declined to comment today on whether AB InBev plans to bid for the remaining shares in Grupo Modelo SAB, the largest Mexican beermaker, in which it owns a 50 percent stake.
Modelo appointed Dutra, CEO Brito and Sabine Chalmers, the brewer’s chief legal officer, to its board in November.
“We have been attending board meetings and interacting with Modelo’s management,” Dutra said. “We are very excited about building this relationship even further.”
8 Mar. 2011