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.
MillerCoors Reports Challenging Third Quarter
"Despite the toughest headwinds we've seen as a company, we slightly improved our sales to retailer trend this quarter versus last quarter and continued to deliver our cost savings commitments," said MillerCoors Chief Executive Officer Tom Long. "We remain focused on driving profitable top-line and share growth with a strong and steady commitment to our brands."
Key operating results for the third quarter are compared to the prior year comparable quarter and include MillerCoors operations in the U.S. and Puerto Rico.
THIRD QUARTER HIGHLIGHTS
(Unless otherwise indicated, all amounts are in U.S. dollars and calculated in accordance with U.S. GAAP, and all percentages are versus the prior-year comparable period.)
?Underlying net income (a non-GAAP measure) decreased 14.1 percent to $286.9 million
?Total net sales decreased 2.5 percent to $1.965 billion
?Domestic net revenue per barrel, excluding contract brewing and company-owned distributor sales, increased 1.8 percent
?Total cost of goods sold (COGS) per barrel increased 3.2 percent
?Special charges for the quarter totaled $110.9 million
For the quarter, MillerCoors domestic sales-to-retailers (STRs) were down 2.0 percent, a slight improvement from the second quarter. Domestic sales-to-wholesalers (STWs) were down 4.7 percent. The STW decline was higher than the STR decline due to the timing of shipments year over year.
Third Quarter Brand STR Highlights
Premium Light STRs were down low-single digits, as Coors Light grew low-single digits, Miller Lite declined mid-single digits and MGD 64 declined double digits.
Tenth and Blake Beer Company grew the MillerCoors Craft and Import portfolio by 17.2 percent in the quarter driven by double digit increases in Blue Moon and Leinenkugel's. The company continues to drive success with its innovative seasonal craft brand extensions, such as Blue Moon Summer Honey Wheat and Leinenkugel's Summer Shandy. Peroni Nastro Azzurro also delivered good growth in the mid-single digits.
The Below Premium portfolio declined mid-single digits, as the company reduced price gaps between Premium and Below Premium beers.
The Premium Regular portfolio was down mid-single digits, with a double-digit decline by Miller Genuine Draft, partially offset by a mid-single-digit increase by Coors Banquet.
Third Quarter Financial Highlights
MillerCoors total net sales declined by 2.5 percent to $1.965 billion.
Domestic net producer revenue per barrel grew 1.8 percent primarily due to front line pricing and favorable brand mix.
Total company net producer revenue per barrel, including contract brewing and company-owned distributor sales, increased by 1.7 percent. Third-party contract brewing volumes were up by 1.0 percent.
Total COGS per barrel increased 3.2 percent driven by higher freight, fuel and packaging costs, an out-of-period depreciation charge of $5.2 million, as well as lower absorption of fixed-costs, partly offset by cost savings.
Marketing, general and administrative costs increased 3.2 percent driven primarily by higher information system spending, an out-of-period depreciation charge of $7.3 million and higher marketing costs.
Depreciation and amortization expenses for MillerCoors in the third quarter were $87.0 million and additions to tangible and intangible assets totaled $62.2 million.
Special charges for the quarter were $110.9 million, which included a $60.0 million write-down in the value of the Sparks brand and a charge of $50.9 million related to the planned assumption of a multi-employer pension plan for brewery workers.
In the third quarter, $27 million of cost savings were realized driven by a variety of initiatives primarily within the integrated supply chain. Annualized cost savings realized since the inception of the joint venture total $192 million. Synergies remain at $546 million as the program completed at the end of the second quarter.
MillerCoors has delivered $738 million in total annualized synergies and cost savings since July 1, 2008, and now expects to deliver on its target of $750 million of total synergies and other cost savings by the end of 2011, a year earlier than originally planned.
Overview of MillerCoors
MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. Built on a foundation of great beer brands and nearly 300 years of brewing heritage, MillerCoors continues the commitment of its founders to brew the highest quality beers. MillerCoors is the second-largest beer company in America, capturing nearly 30 percent of U.S. beer sales. Led by two of the best-selling beers in the industry, MillerCoors has a broad portfolio of highly complementary brands across every major industry segment. Miller Lite is the great-tasting beer that established the American light beer category in 1975, and Coors Light is the brand that introduced consumers to Rocky Mountain cold refreshment. MillerCoors brews premium beers Coors Banquet and Miller Genuine Draft, and economy brands Miller High Life and Keystone Light. The company also offers innovative products such as MGD 64, Miller Chill and Sparks. Tenth and Blake Beer Company, MillerCoors craft and import company, imports Peroni Nastro Azzurro, Pilsner Urquell and Grolsch and features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz-Weinhard Brewing Company. MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel's craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver. MillerCoors vision is to create the best beer company in America by driving profitable industry growth. MillerCoors insists on building its brands the right way through brewing quality, responsible marketing and positive environmental and community impact. MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Company.
3 Nov. 2011