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.
SABMiller Chief Mackay Foresees More Consolidation in Global Beer Industry
“There are bolt-on acquisitions to be done around the world, and there are major deals,” the head of the world’s second-largest brewer by volume said yesterday at the Marketing Society’s annual lecture in London. Mackay doesn’t foresee a “steady march of consolidation,” he said, but expects acquisitions to continue as global brewers with the ability to buy assets look to expand.
“It’s harder to make the numbers work” to drive value from acquisitions, he said. Many brewing assets are owned by families seeking high prices from any disposals, Mackay said. He declined to comment on any potential purchases that SABMiller may make, including Foster’s Group Ltd. (FGL)’s beer unit.
Global brewery deals have totalled $141.9 billion in the last five years, according to Bloomberg data, including InBev NV’s $60.8 billion acquisition of Anheuser-Busch Cos. and the $18.7 billion joint bid by Heineken NV (HEIA) and Carlsberg A/S for Scottish & Newcastle Plc. Anheuser-Busch InBev NV (ABI), the world’s largest beermaker, Heineken, Carlsberg and SABMiller control almost half the beer sold globally, Mackay said.
London-based SABMiller, the maker of Peroni and South Africa’s Castle lager, looks at any possible transactions on a “global basis,” seeking to create more value than any sum paid, he said.
“Whatever you buy, you’ve got a job” to improve it, he said. The key point is to be sure to know how to “change the trajectory” of any business purchased. “If there’s value to be had, we’re up for it,” Mackay said.
SABMiller, which in 1895 started selling beer to gold prospectors in South Africa, has grown partly by buying government-owned brewers, Mackay said. The company has also bought brands including Grolsch and Colombian brewer Bavaria.
SABMiller gets about 80 percent of sales and profits from so-called developing and emerging markets, according to analysts at Investec including Martin Deboo. That makes it the most exposed brewer to faster-growing markets, they said.
Five percent of beer sold globally is of brands consumed outside their country of origin, Mackay said last night. The beer market is “stubbornly diverse,” leading to a “high degree of localization,” he said. Marketing local brands to consumers is more effective for SABMiller than applying a global approach to selling beer, according to Mackay.
Beer brands are “emotional concepts far more than physical ones” and require “local interpretation” to drive sales growth, he said. This is complex, and makes it “hard to drive real scale benefit” across the group’s marketing operations, Mackay said.
“We recognize our approach is more costly” but “we believe we can’t be complacent,” he said.
“When it comes to brand marketing, each of the brewers have a different take on global versus local,” Mackay said. SABMiller has “embraced globalization, but with qualifications.”
29 Mar. 2011