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.
ABInbev may use AmBev shares to buy SABMiller
The market value of AmBev is currently around USD 83 billion, being about the market value of mother company AB InBev, which is traded on the Belgian stock exchange for about USD 85 billion. SABMiller is worth 33.4 billion pounds, or USD 51.4 billion. Ambev may also use USD 3.2 billion USD cash in the operation.
While AmBev’s shares trade at 18.6 times estimated profit for 2012, SABMiller shares equivalent to 13 times the expected result for the year. This would give an advantage to the Brazilian company in the negotiations.
One analyst believes, that the acquisition of SABMiller by ABInbev makes “perfect sense”, because the two breweries are complementary. There is only overlapping business in the U.S. and China. Antitrust authorities in these countries may impose restrictions, but that should not disable the operation as a whole .
This year, AmBev has become the darling of the market and is among the best performing roles in the Bovespa. Investors believe that the brewery is an active “defensive” in times of uncertainty. The price of beer keeps pace with inflation, even with a slowing economy, people do not stop consuming it.
This strong demand for shares of AmBev, however, created distortions in the market, which explains the fact that the brazilian brewery is worth as much as its Belgian parent company.
12 Oct. 2011