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.
Molson Reaching For Foster’s
Bank of America Corp and Deutsche Bank are reported to be the main banks helping Molson; Molson and Modelo are working out an ideal financial offer to take Foster’s into its ambit. However, the details of the joint bid were not disclosed.
Many potential buyers have been planning to acquire Foster’s since it announced plans last year to spin-off its struggling wine operations, which was seen as a deterrent for its growth.
Companies like Japan’s Asahi, Coca-Cola Amatil and SABMiller were the potential buyers, and analysts assume the strong Australian dollar as a possible factor that weakened the allure for Foster’s. However, in February this year, Japan’s Asahi Breweries stated that it had no interest in buying any part of Foster’s.
However, a successful takeover of Forster’s would be one of the biggest deals in the beverage sector.
Foster’s is one of the top brewers in Australia with renowned brands like VB and Cascade and has a 50% market share of Australia. Therefore, the deal if successful will not only be a strategic fit to the companies in terms of portfolio addition but will also give them the exposure to the high potential Australian market.
However, analysts feel that the Molson and Modelo team up is not very promising for the takeover as the partnership would cost Molson highly since the Mexican brewer is half-owned by Anheuser Busch InBev (NYSE:BUD), the world’s largest brewer.
Analysts apprehend that Anheuser-Busch InBev may block any such deal that enhances the value of Modelo and make the outright ownership of Modelo difficult for the former in the near future.
Analysts are of the opinion that SABMiller, Molson Coors’ majority partner in the Miller Coors joint venture in the U.S, is more likely to be a part of the team in swallowing the Foster’s Group.
We remain encouraged by the restructuring initiatives taken by Molson to reduce overhead costs and boost profitability. The initiatives include closure of underperforming breweries and efforts to attain efficiency in finance, administration and human resource activities. However, seasonal nature of the business of Molson Coors and increased competition from Anheuser-Busch InBevare concerns.
7 Jun. 2011