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.
Carlsberg creates fizz
The distinctive green bottles bearing the Carlsberg and Tuborg labels are beginning to catch the attention of the Indian consumer. Danish beer major Carlsberg has silently emerged the number three player in India in just over four years.
Carlsberg today has an all-India market share of about six per cent (excluding Tamil Nadu, where it has no presence) in comparison to leader UB’s over 50 per cent and number two player SABMiller’s 23 per cent.
While it still has miles to go before it can take on the two big boys in beer — Carlsberg has been growing fast in the last few years. On an average, the firm has added some two per cent share per annum in the last three years, according to Carlsberg India’s Managing Director Soren Lauridson. “Our outlook for the long-term is good,” he says.
For a company that began operations in 2007 with the acquisition of a small brewery in Himachal Pradesh, Carlsberg’s India strategy has been predicated on green field projects. Its second, third, fourth and fifth breweries were set up in places including Alwar in Rajasthan, Aurangabad in Maharashtra, Kolkata in West Bengal and Hyderabad in Andhra Pradesh.
Lauridson declines to indicate the investment the Danish major has made so far in the country. But he does say the firm is here for the long haul. “Growth in Europe and the US is stagnating. The Asian beer market including India offers a platform for growth,” he says.
The Danish major began its run four years ago in the north grabbing share from local rivals such as Mount Shivalik, maker of Thunderbolt, and Diwan, which produces Godfather beer. Today these players rank behind Carlsberg at four per cent and three per cent shares respectively. Lauridson admits its strategy of coming in from the north then moving to the central, eastern and western parts of the country has helped it cover significant ground. “But the south will not be as easy,” he says. That is because key players UB and SAB are strongly entrenched there.
The Karnataka and Andhra markets are also large beer markets. Andhra especially contributes about 13-14 per cent to industry sales, while Karnataka contributes about 7-8 per cent and Tamil Nadu about 17-18 per cent. Kerala is relatively smaller contributing about four per cent to industry sales, say market experts.
With Carlsberg ruling out a presence in Tamil Nadu for now at least, the pressure then to find its feet in Karnataka and Andhra becomes important, say market experts. It entered Kerala last year, where it has a share of about eight per cent.
The firm is counting on its line-up of products to take it through in Andhra and Karnataka. The Danish major has three strong beers in its portfolio in a market that is ruled by the strong beer segment. Eighty per cent of the beer market in India comprises the strong segment, while 20 per cent is mild. Abroad it is the other way round, with the mild beer segment making up the bulk of the market there.
Unlike most other international majors, Carlsberg has been quick to realise this addressing the strong beer segment with its discount brand Palone 8 since 2007. It launched Tuborg Strong last year and has now come out with Carlsberg Elephant, each of them at a different price point. Palone 8 is priced between Rs 60-80 for a quart, while Tuborg Strong is priced between Rs 70-90 and Carlsberg Elephant between Rs 100-125 for a quart.
While the beer market in India from April 2011 to now has declined thanks to an unusually mild and wet summer as well as steep price hikes of about 20-22 per cent due to changes in excise and value-added tax (VAT) in different states, the case wasn’t so till last year. The beer market, which closed the 2010-11 financial year at 230 million cases, grew at a clip of about 15-20 per cent per annum in the last seven years.
Most beer majors expect a sales uptick in the third quarter this fiscal especially around the months of November and December going right up to the end of the fourth quarter.
For Carlsberg too, the period will be crucial as it looks to find a foothold in markets such as Karnataka and Andhra Pradesh, which it has stepped into this year.
20 Oct. 2011