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.
Carlsberg CEO downplays threat of Russian PET beer bottle ban
Russian deputy Viktor Zvagelsky introduced a bill earlier in the year that now includes a proposal to ban sales of PET beer bottles by January 1, 2013.
Ban not likely, says CEO
But Joergen Buhl Rasmussen, CEO at Carlsberg, which has a major presence in the Russian beer market, does not expect the proposal to make its way into law.
“We don’t think this is very likely to happen – banning PET for beer,” said the CEO during a conference call on Carlsberg’s first quarter results.
And even if it is implemented Rasmussen does not think a ban would have a major impact on Carlsberg – for whom PET packed beer only accounts for a small percentage of Russian profits. He even suggested that there could be a positive impact for Carlsberg.
“Consumers would start drinking from a different packaging type – cans or glass bottles – which would be positive in terms of premiumisation.”
Other beer measures
The proposal to ban PET beer bottles came in as an amendment to a bill introduced earlier in the year that includes other anti-alcohol measures that would impact the Russian beer market. These include restrictions on high strength beer and night time drinking.
But a company spokesperson told BeverageDaily.com that the Russian team at Carlsberg is comfortable with the situation as it stands.
The spokesperson added that an update is expected next week as the bill makes its way through the Russian parliament.
While Carlsberg remains skeptical about the chances of the PET beer bottle ban making it into the final legislation, others think there is a strong possibility it could be implemented.
Nick Waite, head of market research at Pira, which has just published a study on PET in the beer market, said: “There is a good chance that the law will be passed.”
First quarter results
The Russian beer market has already been hit by a 200 per cent excise duty hike that came into force at the beginning of 2010. It led to significant destocking in the first quarter of last year that gave the Carlsberg 2011 Q1 figures, published this week, a significant comparative boost.
The company said like-for-like Eastern European sales, which include the Russian numbers, were up 28 per cent.
The distorting effect of the 2010 Russian comparison also gave a big boost to total Q1 sales which were up 14 per cent to DKK 12.5bn while operating profit grew 38 per cent to DKK 1bn.
12 May. 2011