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.
The beer packaging debate
While discussing business plans for the Grand Rapids microbrewery that opened in December, Spaulding and his staff mentioned canning their Belgian and French farmhouse-style beers.
"The idea of cans came up. I had this instant reaction, 'No, it's just not right,'" Spaulding said. "And then I started looking into why do I feel that way about it. I started researching it more and more. ... There wasn't any doubt about it. That (canning) was the way to go."
The long-held belief that craft beer only belongs in bottles is slowly disappearing as canning equipment is more readily available to small breweries and the financial and environmental benefits are causing beermakers to take notice. Getting customers accustomed to grabbing cans may be the biggest hurdle as they start appearing on store shelves, some industry officials said.
"There's still a huge education process, because most craft beer drinkers have this opinion that only crappy beer comes in a can and good beer must come in a bottle," said Eric Briggeman, president of the Michigan Brewers Guild and the brewmaster at Rochester Mills Beer Co., which cans beer. "Cans aren't just for yellow, fizzy lager."
By the end of the month, Brewery Vivant will begin packaging three styles of beer in 16-ounce cans and Arcadia Brewing Co., in Battle Creek, will start packaging its seasonal wheat ale Whitsun in 12-ounce cans. They will be the fourth and fifth Michigan breweries respectively to jump on the craft beer canning trend that started with Colorado's Oskar Blues Brewery in 2002 and is spreading around the country.
Michigan's largest brewery, Bell's Brewery Inc., of Kalamazoo, will start canning next spring and several other breweries around the state, including Short's Brewing Co. in Bellaire to The Livery in Benton Harbor, are actively shopping for equipment or including canning in expansion plans.
Industry officials credit New Belgium Brewery, of Fort Collins, Colo., for putting its popular Fat Tire amber ale in a can in March 2008. Another craft brewing giant, Sierra Nevada Brewing Co., of Chico, Calif., announced last month it will can its Pale Ale by the end of this year.
Another big factor in canning at craft breweries comes from Canada's Cask Brewing Systems Inc., which invented the craft canning line in 1999 and sells equipment to craft breweries, including Brewery Vivant and Rochester Mills. Cask also is the supplier of the world's largest producer of aluminum cans, Ball Corp., of Broomfield, Colo. The partnership allows small orders of craft beer cans to get in a pipeline normally filled by major soda and beer companies.
There are at least 283 craft-brewed canned beers from 109 breweries, according to CraftCans.com. The site's database lists 39 states that have cans. Craft beer can sales in U.S. supermarkets went from about $832,000 in 2007 to $5.8 million last year, according to the Chicago-based Symphony IRI Group, which tracks industry statistics.
Brewery Vivant and Arcadia will join Keweenaw Brewing Co., of Houghton (which was the first in the state to start canning), Rochester Mills Beer Co., of Rochester, and MillKing It Productions, of Royal Oak, on the list of Michigan craft brewers packaging their products in cans.
The canning line at Bell's Brewery Inc. will be able to produce 500 cans per minute (the bottling line does about 260 bottles a minute). While bottles will be the container of choice for most bars and restaurants, putting beer in cans opens up many opportunities not available to craft brewers, Bell's president Larry Bell said.
"Right now cans are doing about 3 percent of the craft beer market," he said. "They probably will skew a little bit higher in Michigan, we think, because the nature of drinking opportunities for cans in this state is greater than other states. We're the No. 1 state for boating in the nation. ... We have great golfing, but most courses won't let you take bottles out on the course; sporting events typically allow cans and not (glass) bottles."
Cans weigh less than bottles, so shipping costs are lower. They are also more durable than glass bottles and don't allow light or oxygen pollution, two big enemies of beer. As for taste, aluminum cans today have a water-based polymer lining that eliminates any metallic contamination, so the beer never comes in contact with the aluminum.
There are also environmental aspects many breweries find appealing, Brewery Vivant's Jason Spaulding said. For example, in 2009, the recycling rate for aluminum containers was 57.4 percent, according to the U.S. Aluminum Association. Citing a report from the U.S. Environmental Agency, the Glass Packaging Institute reported glass container recycling was at 31 percent in 2009.
The Maui Brewing Co., of Hawaii, was canning so much beer since it started in March 2007, it needed to upgrade equipment. Maui put the canning line up for sale in an industry publication and Arcadia was the first to act. Shipping and installation of the two-year-old line cost $85,000 to $90,000, Arcadia founder Tim Suprise said. After Suprise secured the deal, another 20 brewers inquired with Maui about the line, an indicator of how popular the trend is becoming, Suprise said.
"We wanted to get out in front a little bit and be part of that development," Suprise said.
Suprise, of Kalamazoo, said he'll take a conservative approach to release brands in cans to see how the public responds. He said he'll start with Whitsun and eventually add other beers.
Not everyone was as quick to pull the trigger on canning. Barry Johnson, co-owner of the Saugatuck Brewing Co., said a year ago he seriously looked at going with cans because of his brewery's proximity to Lake Michigan. Johnson said he knows cans are the superior package for beer. He said he was on the "cusp" but he didn't want to be one of the first breweries to educate the public.
"I hope it works. It's the best package. But I guess the other guys have to pave the way," Johnson said.
Shannon Gary, of the Kent Beverage Co. Inc., a distributor in Grand Rapids that represents Keweenaw Brewing Co. and Brewery Vivant, said cans open up a "convenience factor" for consumers and helps extend the market. He expects brewers to can the lighter beers like wheat ales and lagers.
While the packaging matters, "for the consumer, it has been really popular as long as the liquid inside is good," he said.
10 Apr. 2011