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.
India. Andhra policy change to give SABMiller a chance to regain number one slot
The state has decided to end the policy of placing beer orders in line with national market share of different companies, which it introduced last year. It will go back to procuring beer based on consumer preferences in the state from September 1.
Unlike other consumer products, liquor is a state subject.
Andhra Pradesh Beverage Corporation started placing purchase orders based on national demand following a government order in May 2010 that observed that the top two players held 93-95% share in the state's beer market compared to around three-fourths share in other states.
While the idea was to end the duopoly in the market and create more new room for smaller brewers, the policy mostly helped Vijay Mallya's United Breweries, maker of Kingfisher beer, extend its national leadership to Andhra Pradesh.
Analysts now expect the maker of Kingfisher, Sand Piper and London Pilsner beer to hold on to the top slot even after Andhra Pradesh goes back to old purchasing system.
"SABMiller will regain some market share with the policy reversal but I would not be surprised if UB retains leadership in the state," Abneesh Roy, associate director-research at Edelweiss Financial Services, said.
This is because United Breweries now holds double the market share of SABMiller, maker of Fosters, Haywards and Royal Challenge beer, in Andhra Pradesh. UB had almost 60% share in the first quarter ended June.
Their combined share, however, dipped only 5% as smaller brewers such as Carlsberg, Anheuser-Busch InBev, Lilasons, Artos Breweries and Som Breweries increased their market share to 12% from 7%.
This is what has prompted the state to revoke its contentious procurement policy. In a recent order, the Andhra Pradesh government said it received representations that consumer preferences at the national level need not be imposed on those in the state, and that there was only marginal success in achieving the stated objectives of ending the duopoly and encouraging competition.
SABMiller India Director-Marketing Derek Jones said restoration of the beer policy augurs well for the company. "The government order allows the Andhra Pradesh consumer to choose, a principal we support," he said.
But UB is confident of holding on to its volume share in the state, United Breweries Deputy President Shekhar Ramamurthy said. "As with any policy change nothing can happen in a year. At the same time, the increase in share of smaller players from 7% to 12% is itself a success," he said.
Smaller players' reaction to the development is mixed.
Molson Coors Cobra Beer India President Ravi Kaza said: "If the government wants multiple players it should give smaller brewers a longer shot at it." He, however, felt it would be tough for SABMiller to win back market share because consumers would have moved on.
The company plans to launch Cobra Premium and King Cobra beer in Andhra Pradesh next month. Danish brewer Carlsberg said it can compete well on any procurement policy.
Carlsberg India Managing Director Soren Lauridsen said the maker of Carlsberg, Tuborg, Palone and Elephant beer has had a 4.5% market share in Andhra Pradesh in the first half of the calendar year, up from just 1% a year earlier.
He attributed this to the introduction of Tuborg Strong beer, opening up of a brewery and setting of a sales team in the state over the past year.
24 Aug. 2011