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.
US. Craft brewers look local for untapped demand
"The idea of leaving sales territories is not ideal, but demand locally is necessitating it," said Paul Gatza of the Brewers Association, a craft-beer trade group in Boulder, Colo.
It's a good problem for Frederick-based Flying Dog Brewery, known for highly-hopped ales with naughty names like Doggy Style and Raging Bitch. Chief Executive Jim Caruso announced in June the company was halting distribution in 13 Southern, Midwestern and Western states to bolster its position in what he called "the new world of craft beer."
The pullback leaves Flying Dog in 33 states -- but probably not for long. In a July interview at the company's brewing plant in an industrial park, Caruso said he aims to shrink distribution further, with a goal of selling 70 percent of Flying Dog's output in Maryland, the District of Columbia and northern Virginia within three years. The region currently accounts for about 50 percent of the 1 million cases Flying Dog sells annually.
"If the market in Frederick were such that we could sell a million cases in Frederick, that would be my strategy," Caruso said.
At the same time, he's considering building a new brewery, three to five times bigger than the current plant. And Caruso figures he can sell virtually all that beer within a few hundred miles of home.
Brewers like Flying Dog are betting on local growth because there are so many drinkers left to convert. Craft breweries -- those selling 6 million barrels or less a year -- accounted for just 5 percent of the 204 million barrels of beer sold in the United States last year, according to the Brewers Association. A barrel holds 13.8 cases of beer.
And craft beer's growth is heady. Sales rose 11 percent by volume in 2010, at a time when overall beer sales slipped 1 percent, the association said.
Demand is so strong that craft brewers who've spread themselves too thin must ration their beer -- supply some distributors and leave others short.
That can get annoying for tavern owners like Kathy Reeder. Her Hempen Hill BBQ in Hagerstown, Md., has a Starr Hill Brewery sign in its front window, but she had none of the Virginia-made beer on tap one recent July night.
She said occasional shortages are acceptable; they can even heighten a brand's mystique. And she wants to support regional craft brewers. But she can't let a tap sit idle too long.
"Sometimes we need to move on to other products," she said.
And there are plenty available. The number of craft brewers has mushroomed from eight in 1980 to more than 1,600 last year. Starr Hill, founded in 1999 in Charlottesville, has at least three newer competitors in northern Virginia alone.
Starr Hill founder Mark Thompson said he'd like to expand production but there's a long waiting list for necessary equipment, such as brewing kettles and fermenting tanks.
"We only have a certain amount of brewing capacity," he said. "We are all evaluating reducing the footprint we have and selling more in our local market. And that's considered a strength, not a weakness."
Pulling back also saves on shipping costs. Brewers and distributors sometimes swallow part of the transportation costs, but the brewers say they mostly suffer because shipping to far-flung states increases the price of the beer to consumers, making their beer less competitive in distant markets.
Eighteen-year-old New Glarus Brewing Co. of New Glarus, Wis., has thrived by selling beer only in its home state since the late 1990s. The company's slogan: "Drink indigenous."
"The idea of continually expanding your footprint and then pretending you're growing your business, I just don't see it," said Deb Carey, the company's president. "How can you say you're growing your business if all you're doing is expanding your territory?"
With annual production exceeding 100,000 barrels and sales running 20 percent above last year, Carey said she's more interested in making good beer and improving the lives of her 60 workers than in shipping beer cross-country.
"As a craft brewer, my goal is to be part of the fabric of Wisconsin, which is my home state and a place I love," she said.
Benj Stein, editor of brewing industry trade journal Beer Marketers' Insights, said craft brewing kingpin Boston Beer Co., maker of Samuel Adams, doesn't need to pull back because it's so well-established nationally. And Stein said big international brewers like Anheuser-Busch InBev NV and SABMiller PLC, aren't losing much to craft brewers because they're a relatively tiny part of the overall industry.
He said the fight among small craft brewers for local sales will produce some winners and losers, with the victors eventually expanding their reach once again.
"Wide distribution -- ultimately, I think that would be the preference over time," Stein said.
And even as they strive to become known as your friendly or funky or edgy local brewery, craft brewers know that selling into their backyard is just good business, said Starr Hill's Thompson.
"At the end of the day, we all like to sell beer and make money," he said. "This is not a hobby for me."
3 Aug. 2011