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.
Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
India. Heineken launch from UB stables likely to be delayed
According to alcohol beverage trade officials, UBL is understood to be gearing up to launch Heineken in India during early 2012 from the earlier scheduled launch of October 2011.
According to trade officials, this is due to the delay in the upgrade work which is going on at one of UB’s brewery in Mumbai, the sole brewery which will be used to brew Heineken beer to meet its global standards.
The decision to brew Heineken in India was taken after Heineken NV picked up a 37.5 per cent stake in India’s largest brewery company - UB, during late 2009. The management of UB had indicated that they may be able to launch Heineken during end of 2010, a date which was later deferred to mid or late 2011.
“There are lot of technical issues in brewing Heineken in India. An entire line to brew the beer is being imported and is being fine-tuned to retain its exclusive taste. Not only the line, even the barley to brew the beer in India is being imported from Europe,” senior officials at UB Group said.
However when contacted, UBL MD Kalyan Ganguly said that they are working towards a launch during October and do not see a delay. The brewery in Maharashtra is being upgraded with an investment of around Rs 30 crore.
In addition to this upgradation, UB is also putting up a greenfield brewery in Andhra Pradesh which will be built with capabilities to brew Heineken beer at a later date.
Even as UB is taking active steps to brew Heineken to India, the company has earlier introduced Heineken in selected markets of India thr-ough imports. Presently, the cost of Heineken is high (around Rs 150 for 330 ml) due to higher duties imposed on imported beer.
Domestic brewing will help to substantially reduce the price of this beer in the country, though it will be still at the premium end of the market. A 330 ml Kingfisher pint costs around Rs 60 at the premium end and Heineken, even after being brewed in India is expected to be upwards of Rs 90.
As per industry experts, this is also going to help Kingfisher in realising a revenue upside by selling this premium brand in the country.
Heineken, through the partnership with UB, is hoping to reach various metros in India to start off with riding on UB’s strong distribution network. In turn, UB is hoping that its brands will get a global stage through Heineken network in more than 60 countries.
UBL, which sold more than 105 million cases of beer in FY11, has around 50 per cent marketshare in India and has been facing tough competition from competitors like Sab Miller in its regular beer segment.
“The margins are also under pressure due to rise in commodity prices. The launch of Heineken in India will not only improve margin of UBL but also boost its efforts in premium beer segment,” an analyst said.
Meantime, the beer company, which aims to touch 200 million cases in the next three years period, is ramping up its manufacturing facility through acquisitions and setting up of greenfield breweries to meet the increasing demand for its products with an investment of around Rs 700 crore. It is planning to introduce greenfield breweries in Nanjangud of Karnataka along with one in Bihar.
It will also expand its existing capacity in Odisha, Kalyani (West Bengal), Aurangabad in Maharashtra (two units) and Hyderabad (three units) in the near future. With these planned capacities, UBL’s present capacity will go up to 16 million cases per month from 12.6 million cases in the current calender year. The company is also in talks with various state governments to cultivate barley for captive sourcing.
UBL has posted a 53 per cent rise in its net profit to Rs 40 crore in the fourth quarter of 201-11, as compared with Rs 26.1 crore in the same period last year. Net sales rose 46.5 per cent to Rs 839.5 crore during this period as compared with Rs 573.15 crore last year.
On an annual basis, the company registered a 73 per cent rise in net profit in 2010-11 to Rs 168 crore as compared with Rs 97 crore in 2009-10. Net sales rose 41 per cent to Rs 2,778.8 crore in 2010-11 against Rs 1,973.1 crore reported in 2009-10.
14 Jun. 2011