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.
Brazilian Beer Vendor AmBev Hangs On Amid Rising Costs
Such is the case with Companhia de Bebidas das Americas (ABV), the leading beer company in Brazil. The firm, generally known as AmBev, was the first in its industry to raise prices 6% to 7% last year in response to the worldwide grain shortages. Since it owns 68% of the market in its home country, it can generally get away with that until its competitors are obliged to follow.
However, HSBC analyst Lauren Torres says that this time around the other beers have been slow to raise their prices. That accounts for the flat volume growth in the first quarter, after double-digit increases last year.
A truck carries Antarctica brand beer at the entrance of AmBev's factory in Rio de Janeiro, Brazil. AP View Enlarged Image
"When that happens, there's a quarter or two of disruption, where (AmBev) loses market share," Torres said. "But then typically they regain it back when the competition follows. We do believe that in the second half of this year, you'll see AmBev take back that lost market share."
Brazil isn't AmBev's only market. Since 2004 the firm has been majority-owned by global beverage giant Anheuser-Busch InBev (BUD), and it distributes Budweiser and Stella Artois in Canada, where it holds a leading 42% market share. It also sells various beer brands in 12 other Latin American countries and is the regional distributor of PepsiCo's (PEP) namesake soft drink.
Canadian volume suffered in the first quarter as it faced tough comparisons with last year, when the Winter Olympics were held in Vancouver, British Columbia. But AmBev saw 23% volume growth in its Quinsa division, which covers southern South America, and 13% growth in Hila-ex, which covers a smattering of tropical American countries.
Overall, the company beat analysts' views with earnings of 41 cents a share, up 37% from a year earlier. Sales climbed 17% to just over $4 billion.
In the May 4 conference call discussing the quarter, officials credited new bottle sizes and product rollouts for their success. The CEO also mentioned plans to launch Bud in Brazil in the second half of this year.
Mostly, though, investors seem to be betting on the secular growth of Latin America in general and Brazil in particular.
"In the markets where the company has a sizable share (30%-plus) of the market (Brazil, Bolivia, Uruguay and Canada), beer is expected to grow in total between 2010 and 2015 by 4% CAGR (compound annual growth rate)," Euromonitor analyst Jeremy Cunnington said in an email to IBD. "95%-plus of that growth is coming from Brazil."
26 May. 2011