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.
US. Craft Retail Pricing Grows in October 2nd Scans
There may be some impact of the amount of feature and display craft is getting at retail relative to other high-end beers. While craft appears to be succeeding in getting shelf space, it remains difficult for craft to get the feature and display that it may merit in the marketplace. It is fortunate for craft brewers that the quality has remained high across nearly all brewers, encouraging trial for the category and that beer drinkers continue to move toward craft.
Craft volume growth continues to impress. Craft volume was up 17.2% against the previous month's growth of 20.7%. The past several months we have seen that volume growth and pricing growth appear to be closely related.
Last month I focused on the recent decline of the companies that reformulated their caffeinated 12% ABV products last fall. Phusion Products was down 30% and United Brands down over 60% this scan period. Did the presence of caffeine make that much of a difference for these products?
Other companies down in volumes in the latest scan period included Anheuser-Busch InBev, MillerCoors, Heineken USA and Diageo, which has started marketing a new product in the U.S. 19 of the top 25 companies grew volumes in scan data. The largest private label contract company, World Brews/Winery Exchange, saw 130% growth in beer volumes, showing that private label for grocery and drug channels is getting more traction in beer. Many in the beer industry do not think this trend bodes well for overall industry volumes as it could lead to the perception among some of commoditization of beer and that beer succeeds with strong brands.
4 Weeks to October 2, 2011--up 52 cents per case.
Year to Date 2011--up 44 cents per case
52 Weeks (October 2010-early October 2011)--up 43 cents per case.
Here's a rundown of some of the other craft figures from the SIG report for food/drug and convenience stores.
4 Weeks to October 2, 2011--17.2% volume growth; 19.1% dollar growth. (All beer -0.1/+2.0)
Year to Date 2011--14.3% volume growth; 15.9% dollar growth. (All beer -0.7/+1.8)
52 Weeks (October 2010-early October 2011)--14.6% volume growth; 16.2% dollar growth. (All beer -0.9/+1.6)
Craft gained 0.5 share points over the scan period by volume and 0.7 share points of dollars. Imports and domestic superpremium also gained 0.5 share points in volume. So the low and middle sections of the beer industry are losing 1.5 share points to the high end right now.
The beer drinkers love for hops and the march toward India pale ale remains a solid trend. IPAs gained 2.3 share points in craft and showed 42 percent growth as a style in scans. Variety packs also re-emerged as growing over 1 share as the calendar hit autumn. There is also something very interesting going on with the stout style bucket. I know stouts don't drive a huge amount of volume (at least in this period of beer drinker taste evolution) and are usually not consumed in multiple bottles in an evening. While stouts are up over 25% in volumes, the retail dollar price per case is up $5.55. That is a huge jump, most likely explained by growing sales in the stronger stout styles that traditionally have commanded a higher price--imperial stout, Russian imperial stout and barrel-aged stouts. As the weather turns colder, this seems to be a stylistic area that has significant growth potential for craft brewers, distributors and retailers, and the source of great enjoyment for beer drinkers.
17 Oct. 2011