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.
Kirin Forecast Misses Estimates on Australia, Japan Declines
Net income may reach 48 billion yen ($618 million) in the 12 months ending Dec. 31, the Tokyo-based company said in a statement yesterday. That compares with the 62.5 billion yen average estimate of 16 analysts based on data compiled by Bloomberg.
Earnings from its Lion unit in Australia will miss budget as discounting by the nation’s biggest retailers stymies its ability to raise prices, higher ingredient costs curb profitability and stalling consumer demand cuts sales. Declines in the Japanese drinks market will result in revenue missing target and limiting the benefit of overseas acquisitions such as Brazil’s Schincariol Participacoes e Representacoes.
“We want to take a medium to long-term view for Lion,” President Senji Miyake told reporters in Tokyo yesterday.
Kirin expects 2012 earnings from Lion of A$96 million ($103 million), lower than the A$350 million target set in 2010, it said in a presentation on its website. Kirin owns Australia’s second-largest brewer and largest milk processor.
Lion’s management will focus on more profitable products, such as cheese and flavored drinks, to reduce the impact of plain milk discounting by retailers.
Kirin and rivals Sapporo Holdings Ltd. (2501) and Asahi Group Holdings Ltd. have expanded overseas to offset a slump in demand at home. Industrywide beer sales in Japan fell 3.7 percent to 442 million cases last year, the lowest level since records began in 1992.
Schincariol, San Miguel
Among other acquisitions last year, Kirin agreed to buy out shareholders in Schincariol Participacoes e Representacoes in November 2011. The deal at that time valued the Brazilian company at about $3.6 billion excluding debt, when combined with the initial purchase of a 50.45 percent stake.
The brewer increased its stake in Manila-based San Miguel Brewery Inc. (SMB) to 48 percent in 2009, bought a 14.7 percent of Singapore’s Fraser and Neave Ltd. (FNN) in 2010 and purchased a majority stake in Vietnam’s Interfood Shareholding Co. for an undisclosed sum in March 2011.
Kirin’s 2011 annual profit dropped 35 percent as the value of its Sydney-based Lion unit and investments declined. Net income fell to 7.4 billion yen in 2011 from 11.4 billion yen the previous year, the Tokyo-based company said yesterday.
Kirin’s rival Asahi Group Holdings Ltd., which spent at least $1.8 billion on acquisitions in 2011, yesterday forecast 2012 profit will rise 18 percent, in line with analyst estimates.
Asahi, Japan’s largest brewer by volume, said net income may climb to 65 billion yen ($837 million) in the 12 months ending Dec. 31 from 55.1 billion yen in 2011, according to a statement yesterday. The forecast compares with the 64.9 billion yen average of 15 analyst estimates compiled by Bloomberg.
Kirin, Asahi and Sapporo were forced to temporarily shut factories after the March 11 earthquake in northern Japan. Beer shipments by the nation’s five biggest brewers plunged more than 8 percent in the months of March, May and June from a year earlier.
Sapporo forecast net income of 6.3 billion yen in 2012 and 7.4 billion yen in 2013, compared with the 7.95 billion yen mean estimate of five analysts for 2012 and 8.8 billion yen estimate for 2013.
The company posted 2011 net income of 3.2 billion yen, according to statement to Tokyo Stock Exchange.
Kirin’s shares rose 1.9 percent to 967 yen at the close in Tokyo yesterday before the earnings were released. Asahi climbed 0.8 percent to 1,731 yen, while Sapporo gained 0.7 percent to 294 yen.
14 Feb. 2012