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.
Wisconsin Gov. Scott Walker’s War On Craft Beer
The new provision treats craft brewers — the 60 of whom make up just 5 percent of the beer market in Wisconsin — like corporate mega-brewers, forcing them to use a wholesale distributor to market their product. Under the provision, it would be illegal, for instance, for a small brewer located near a restaurant to walk next door to deliver a case of beer. They’ll have to hire a middle man to do it instead.
But more noteworthy than the provision itself is how it was enacted. The provision was quietly slipped in the massive budget legislation without any consultation from independent craft brewers, who are justifiably outraged by it. One group that clearly did have input, however, is one of the world’s largest beer makers — MillerCoors:
Chicago-based MillerCoors, which operates a brewery and eastern division headquarters in Milwaukee, supports the proposal because it shares concerns with wholesale distributors about the possibility of Anheuser-Busch buying wholesalers throughout the country, said company spokesman James Wright.
Joining MillerCoors in support of the provision are industry associations that have an interest in preserving the current business of beer distributors, including the industry’s lobby, the Wisconsin Beer Distribution Association. But craft brewers see the provision as “a power grab” by MillerCoors that is targeted at them. OpenMarket.org reports:
Craft brewers say that MillerCoors is pulling a fast-one on the states legislature by selling this as a bill that would protect small beer from the brewing behemoth [Anheuser-Busch] InBev’s plan to monopolize the Wisconsin wholesale market. Craft brewers say that this is clearly not InBev’s intent, as they have passed up opportunities to purchase wholesalers in the state no less than 16 times since 2008. They say the real competition that MillerCoors is trying to protect itself against is the growing craft beer market. The restrictions the measure places on any wholesaler wishing to start-up in Wisconsin seem to support the craft brewers’ claims.
The provision is a classic bit of rent-seeking from MillerCoors, who appear to be seeking to preserve their current market share with the power of the state government.
But why would Walker — who calls small businesses the “backbone of our economy” and has postured himself as their champion — side with a foreign-owned mega-corporation over locally owned small brewers? It may have to do with the fact that MillerCoors, which is joint venture with foreign-owned SABMiller, donated $22,675 to his campaign.
11 Jun. 2011