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.
Nigeria’s huge beer market offers opening for more investments
Before now, two traditional big players in the Nigerian brewing sector, Nigerian Breweries Plc and Guinness Nigeria Plc, had been engaged in stiff competition for control of the nation’s beer market.
SABMiller, a global brewing giant with headquarters in South Africa has recently joined the fray.
The battle for market dominance in Nigeria ’s robust beer market was kick-off by the entry of SABMiller of South Africa in 2009.
A report from Imara, a pan-African financial services group, reveals why the beer industry giants, local and international, are at war over who controls this important liquor market.
The beer market is growing by about 7 per cent in volume terms a year, yet consumption per capita remains low in comparison to many international markets, suggesting continued growth is in prospect, says the Imara report.
Figures from the Imara report indicate the market growth potential for successful players in the country’s non-oil sector. According to the report, the Nigerian economy grew by an annualised 7.4 percent in the first quarter; the non-oil economy was the major driver, growing by 8.5 percent versus the 2.9 percent contribution from the oil economy. The report says first quarter sales at Nigerian Breweries are up 30 percent, while net profits have risen by 22.7 percent. For the three months to the end of March, Guinness announced a sales growth of 11.4 percent and a rise in net profit of 32 percent.
Analysts believe the latest revelations by Renaissance analysts on the nation’s attractive beer market will stimulate fresh robust competition in the sector, among the current three big players and possible new entrants who will want to have a piece of the action.
A series of ground -breaking research reports on African brewers, covering the markets of Nigeria , Zimbabwe , Kenya , Uganda , Tanzania , Rwanda , Burundi , East DRC, Southern Sudan and Ethiopia , shows that these African countries are huge markets for beer.
“The breweries sector in Sub-Saharan Africa is very attractive,” says Nothando Ndebele, Head of Research, Sub-Saharan Africa (SSA) at Renaissance Capital. “While per-capita consumption of alcohol is as high in SSA as in most developed markets, consumption of commercial beverages remains low relative to home-brewed alternatives. With rising income levels and increasing rates of urbanisation, we expect commercial beverages to continue gaining market share. This should support strong volume growth for the sector.”
Demand for beer in Nigeria and East Africa has traditionally been constrained by supply, according to the research. Analysts conclude that accelerating market growth – driven by the ongoing shift to commercially produced beverages – will be supported by increased investment by major local brewers.
Nigeria is the most attractive beer market in SSA, note Renaissance analysts, with the highest alcohol consumption per capita (mostly home-brewed) and the largest population of drinkers. The market – Africa’s largest (excluding South Africa ) – reached 18 mn hl in 2010, with consumption per capita of 11.6 litres. Analysts expect the Nigerian beer market to expand at a Compound Annual Growth Rate (CAGR) of 13 percent over the next 10 years.
Market leaders, Guinness Nigeria (rated BUY at Renaissance Capital, with a target price of N303/share) and Nigerian Breweries (rated HOLD, with a N97/share target price) have committed to substantially increased capital expenditure, with Guinness Nigeria upping capital spending five times on previous years. Competition has been relatively low so far, with supportive regulation, and Renaissance analysts expect this to continue. They see Guinness Nigeria as a more attractive investment than Nigerian Breweries, offering greater valuation upside and clearer expansion plans.
In the broadly defined East Africa region, beer consumption reached 18.6 million hectolitres in 2010, and increased at a CAGR of 12 percent over 2005-2010. Renaissance analysts expect this strong growth to continue, particularly in Uganda , Tanzania and Rwanda ; and initiate coverage of East Africa Breweries.
Excluding Kenya , competition in the East African countries is more intense than in other regions, such as West Africa , Renaissance says, noting that this has incentivised brewers to innovate, expanding their market through low-cost beers. Analysts see further upside to volume growth, driven by continued innovation in low-cost products and improvements in distribution.
29 Aug. 2011