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.
Kenya. EABL raises beer prices to cushion against costs
The regional beer giant attributed the increase to “escalating costs of raw materials and utilities” but brewers’ revenues have also been hit by new regulations on alcohol advertising, sale and consumption that have cut sales.
The latest regulations, known as Mututho rules, have put curbs on selling points and drinking hours, reducing the amount of beer consumed and sobering up an industry that was high on sales.
According to prices it released on Thursday, EABL appeared to punish the middle to the high-end of its drinking market by selectively raising prices of its premium beers and some of its most popular brands.
EABL’s flagship Tusker brand, which has been retailing at Sh90 for the 300ml bottle will now cost Sh95, while Tusker Malt increases to Sh100.
Others in this category are White Cup Lager and White Cup Light, which increased from Sh100 to Sh105.
Guinness 500ml bottle was among those increased by Sh10, with its price rising from Sh100 to Sh110.
A 300lm bottle of Tusker will retail at Sh80, Guinness at Sh85, while the 500ml Tusker can will cost Sh115, as the 330ml one rises to Sh95.
“The market and business environment for the formal alcohol beverage sector has been challenging of late,” Ms Brenda Mbathi, corporate relations director at EABL, said on Thursday.
“This has increased the pressure on our cost of goods from our various suppliers leading to increased input costs.”
Other beer brands including Pilsner, Castle Senator cage, President and Redds remained untouched, signalling that the brewer could sparing the low-end of the market from the pain of the price increases and focus on the well-off to grow its revenues.
Coming just two months before the budget, the latest increase has got the government and beer lovers off-guard, putting them on stand-by for more price increases in case the government imposes more taxes on beer to raise money for the over Sh1 trillion budget.
The last time EABL increased its prices was in June last year after Finance minister, Uhuru Kenyatta, raised excise duty on malt and non-malt beer from Sh54 and Sh45 per litre to Sh65 per litre and Sh55 respectively in the current fiscal year’s budget.
The exchequer planned to raise Sh2.5 billion from this sin tax.
This came at a time the local beer market had been slightly hit by slow economic growth and high cost of production.
East African Breweries, which in 2009 paid Sh25 billion in taxes, unsuccessfully lobbied for a drop in taxation.
7 Apr. 2011