The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies 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