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.
Russian market hammers Carlsberg
The drop, flagged in an August profit warning, comes as Russian efforts to tackle alcoholism led to a 30 per cent jump in the price drinkers pay for their beer over 18 months. That, combined with soaring input prices and intense competition, has created a toxic cocktail for the industry.
While this year saw a bigger Russian barley harvest, the quality was poor. Consumer sentiment in the region, meanwhile, remains weak. Russia contributes 40 per cent of group profits.
J?rgen Buhl Rasmussen, chief executive officer, anticipates a rebound in volume growth at some point next year, although he said it was “too early” to make any forecasts on any improvements in margin.
Overall, the Denmark-based brewer is sticking by its full-year guidance for a slight dip in reported operating profit to DKr10bn and 5-10 per cent growth in net profits.
Net revenue fell 2 per cent year-on-year in the third quarter to DKr17.4bn and the underlying growth was flat. Net sales in Asia, the smaller part of Carlsberg’s portfolio, were up 20 per cent in the quarter, while organic operating profit was up 18 per cent.
China, the biggest Asian markets in volume terms, is one of the world’s less profitable beer markets. In Northern and Western Europe, net revenues were down 2 per cent.
Michael Steib, analyst at Morgan Stanley, reckoned Russian margins would bounce back somewhat – not least due to the arithmetic of improving off a lower base – but expects most of this to be invested back in sales and marketing activity to revive growth.
Carlsberg is also losing market share in Russia, from over 40 per cent in 2009 to under 37 per cent this year. “That’s obviously a worrying trend and to a degree challenges the view that Baltika [Carlsberg’s Russian arm] is an unassailable fortress in Russia,” said Mr Steib.
Last month Carlsberg replaced Anton Artemiev as its head for eastern Europe with Isaac Sheps, who heads up the UK business for Carlsberg. The switch will take place on December 1.
Carlsberg, which has invested more than $12bn in Russia since the 1990s, has had a bruising year so far. In August it issued a profit warning that sent its shares tumbling 17 per cent on the day.
14 Nov. 2011