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.
US. Grocery store sales affecting beer distributors
“Our business has picked up,” said Gary Cotelesse, owner of the Beer Pier in Union Township. “We just signed a new one-year lease.”
The Beer Pier, in operation since 1997, is located across Route 224 from Westgate Plaza, home to Shop ’n Save grocery store.
Cotelesse attended public hearings when the township supervisors considered relocating a restaurant liquor license from New Castle to the township, at the request of Shop ’n Save owner Dan Falcone.
During the hearing, Cotelesse said the grocery stores would benefit unfairly at the expense of distributors because customers would go for groceries and prepared foods as well as alcohol. Distributors, he said, are limited to selling one thing — beer.
“Actually our sales have picked up in the past year,” Cotelesse said. He attributes that to “the weird way they have to sell beer. And because we’re cheaper and more convenient. We’ll even load the case of beer into your car.”
Under Pennsylvania law, he explained, everyone purchasing alcohol in a grocery store must show photo identification to complete the transaction.
“Not everyone carries a license to be scanned,” he said.
Although distributors may sell beer by the case only, grocery stores have other limitations.
“They can sell only two six-packs per transaction,” he said. “If someone wants more beer, they must leave the premises with their purchase, take them out to the car, then come in to buy two more.”
Price is another factor, he said. “If someone sits down for lunch and wants a beer, it will cost him $7.”
Customers have said otherwise. Some said beer prices — be it a six-pack, a four-pack or a single bottle — are comparable to other beer sales outlets.
However, Cotelesse said he believes the two venues attract different types of customers.
“If the holidays are coming up, someone might drive through (the distributorship) and buy a case of beer. If company is coming for a night, a housewife might pickup a six pack when she shops for groceries.”
Cotelesse believes the beer-in-the-store may have helped his business.
“A customer can try different things then come to us for a case.”
He also said he is concerned more places will be getting into the game, as Sheetz and other convenience stores push for changes in Pennsylvania law that will allow them to sell beer to go.
Chris Balquist of McBride Beer Distributor on Wilmington Road, said the business has been open for about a year.
“Giant Eagle, which is nearby, has only just started selling beer,” she said. “It’s hard to tell if that has affected our business.”
Balquist said “generally, we see different customers.”
Mary Lou Hogan, executive secretary of the Malt Beverage Distributors Association of Pennsylvania, said the organization went to court after grocery stores “began to push the envelope by selling beer.
“Grocery chains — Giant Eagle, Wegman’s, Weis Market and Whole Foods — obtained restaurant liquor licenses and began using them to sell beer. We argued that it had not been the intent of the law to allow that,” she said.
However, Hogan continued, the Pennsylvania Supreme Court ruled against the association and in favor of the grocery chains.
“We had argued that grocery stores had an unfair advantage. They could sell 50,000 items and could feature beer sales as a loss leader special. Distributors have only one item to sell — beer.”
A loss leader item is a product sold at or below cost to stimulate other sales.
Hogan said some beer distributors also sell snack items, lottery tickets or cigarettes.
“But we can’t compete with the variety available in supermarkets.”
In addition to supermarkets, Sheetz is entering the beer market. So far, two Sheetzes — both in the Altoona area — are licensed to sell beer. Both have sit-down “restaurants” on their premises.
Hogan said the organization, which represents more than 450 retail and wholesale beer distributors, is seeking other ways to level the playing field.
“In our newsletter, we said distributors should be allowed to extend Sunday sales hours. This will require action by the Legislature.”
Currently, Hogan said, state stores and distributors may be open for business between noon and 5 p.m. on Sundays. The organization is urging legislators to extend those hours until 9 p.m.
Gus Benetas, the most vocal of the beer sellers opposing grocery store sales, agreed it is too soon to determine if local distributors have been hurt by that.
“But the problem is, who will step up next?” he asked “Where is this going?”
Benetas anticipates Sheetz and Walmart are waiting in the wings to follow the lead of Shop ’n Save and Giant Eagle.
“They have the advantage over distributors. They are all set up as one-stop shopping facilities offering bakery, beer and banking as well as groceries. The more people who get into the picture, the more divided up things will be and the harder it will be to make ends meet.”
Benetas is also in the specialty beer business. He opened Mr. B’s in Shenango Township in 1990 and added beer in 1994. He opened a Neshannock Township location in 2003, specializing in microbreweries and imports.
“We have a lot of variety. People can try things. If they work out, we’ll keep them. If not, we try something else.”
But the business is not as easy as it sounds, he said.
“We get special order requests. Some things we can’t get right away, it can take months. Some specialty items we can’t even get in Pennsylvania.”
25 Jul. 2011