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.
Carlsberg Operating Profit Jumps 38%
Earnings before interest, taxes and some one-time items rose to 1 billion kroner ($194 million), exceeding the 993 million-kroner average estimate of 16 analysts compiled by Bloomberg. The operating margin widened by 1.4 percentage points to 8 percent, the Copenhagen-based company said today.
Carlsberg shares rose the most in four months. The brewer gets about 45 percent of profit from eastern Europe, where first-quarter volume increased 28 percent compared with a period of last year when Russian sales were depressed after the government tripled alcohol taxes.
“This is a good start to the year,” Andy Smith, an analyst at MF Global in London, said in a note to clients. The Russian recovery “is gathering pace.”
Carlsberg shares gained as much as 24.5 kroner, or 4.1 percent, to 617 kroner, the steepest intraday gain since Jan. 18. They were up 21 kroner, or 3.5 percent, at 613.5 kroner as of 11:07 a.m. in Copenhagen trading.
The brewer reiterated its February forecast of “high single-digit” percentage growth in 2011 operating profit and adjusted net income growth of more than 20 percent.
“We are particularly pleased that the important Russian market has returned to growth,” Chief Executive Officer Joergen Buhl Rasmussen said in the statement.
Raw Materials Costs
Margin growth was “light of consensus,” as higher input costs and advertising expenses weighed on results, Dirk Van Vlaanderen, an analyst at Jefferies International Ltd. in London, wrote in a note today.
Raw materials costs rose in eastern Europe after record droughts led to poor grain harvests last year, Carlsberg said.
Beer sales, excluding acquisitions, slid 2 percent in northern and western Europe in the quarter as “consumer dynamics remain challenging,” the company said.
Total organic volume rose 10 percent, inflated by a low comparative due to last year’s Russian tax increase. Excluding the effect of the destocking in the first quarter of 2010, volume grew 2 percent, according to Carlsberg estimates.
First-quarter net income totaled 173 million kroner, the company said. That missed the 280 million-kroner median estimate of 14 analysts surveyed by Bloomberg.
Net income “was negatively impacted by an increase in special items related to restructuring and in other net financial items due to currency movements,” MF’s Smith said.
11 May. 2011