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.
SINGAPORE: APB’s group revenue rises 20% in first nine month of 2011
Group revenue for the nine months stood at S$2.24 billion, up 20% or S$370 million as compared with the same period a year ago.
Mr Roland Pirmez, Chief Executive Officer, APB said, “Improvements in Group PBIT, APBE and revenue were mainly due to stronger demand for our brands in Vietnam, Papua New Guinea and New Caledonia. We also recorded an exceptional income of S$36.3 million with the recent divestment of interest in Kingway Brewery that further contributed to our ANP growth of 36%.”
In addition to driving organic growth in its existing markets to improve its earnings profile, the Group made strategic investments to further expand its regional network in recent months. Forging ahead with its premium brand strategy in China, APB commissioned its 50%-owned greenfield brewery, in Guangzhou in May 2011. It also extended its presence in the South Pacific by acquiring a 97.69% interest in Solomon Breweries Limited in June 2011.
Operations Review (YTD)
South & South East Asia (Singapore, Export Markets, Malaysia, Indonesia and Sri Lanka)
Volume and PBIT for the region rose 25% and 37% respectively, boosted mainly by the acquisition of breweries in Indonesia in February 2010. Excluding the results from Indonesia from October 2010 to January 2011, PBIT grew 4%, driven by higher volumes in Singapore, Malaysia and Sri Lanka as well as improved margins in Indonesia.
Indochina (Vietnam, Cambodia and Laos) & Thailand
Volume for the region grew 18%, led by continued growth momentum in Vietnam. Increased marketing also lifted volumes in Cambodia and Laos.
PBIT grew 20%, underpinned by higher volume and better margins in Vietnam. Excluding translation losses that arise mainly from the 18% devaluation in the Vietnamese dong, PBIT grew organically by 41%.
North Asia (China and Mongolia)
PBIT for the region fell 15% to S$1.8 million. The region incurred higher gestation losses from the newly-commissioned brewery in Guangzhou while improved margins and volumes were reported in Mongolia.
Oceania (New Zealand, Papua New Guinea and New Caledonia)
Volume and PBIT for the region grew 10% and 27% respectively. The strong performance was mainly attributed to contributions from the newly acquired brewery in New Caledonia. Excluding the results from New Caledonia from October 2010 to January 2011, PBIT grew 20% due to higher volumes and improved margins in Papua New Guinea.
Corporate office expenses were higher than same period last year mainly due to higher personnel expenses offset by higher royalty income and lower marketing expenditure.
Rising inflation in our main markets compounded by the recent global economic uncertainties may dampen consumer demand.
Strengthening of the Singapore Dollar against regional currencies, particularly the Vietnamese Dong, will continue to adversely affect the reported financial results of the Group.
The company share price has further appreciated in the last three months, resulting in a higher provision for employee share-based expenses. Taking the current share price as a reference, additional provisions will be required for the last quarter of the financial year.
13 Aug. 2011