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.
Carlsberg To Boost Russian Operations As Profit Surges
Carlsberg, the world's fourth-largest brewery group, gave a cautious guidance for the current year, even as it said net profit rose strongly, helped by a temporary stocking effect in Russia as well as by cost cuts, a better price mix and solid growth in its Asian markets.
For 2012, Carlsberg expects a slightly-growing adjusted net profit, while earnings before interest and tax are seen at the same level as in 2011: A single-digit beer volume decline in Northern and Western Europe is seen balanced out by continued cost cuts, growth in Asia and a reversion to modest growth in Russia, helped by the full acquisition of Baltika and the replacement of its chief executive and several senior managers.
Carlsberg, which holds a majority of about 85% in Baltika, intends to buy the rest of the shares at a net cost of a maximum of DKK4.4 billion, and then delist the company.
"Full ownership of Baltika will give the Carlsberg Group greater operational flexibility," it said, adding that the transaction--expected to complete in May--will be immediately earnings-enhancing.
St Petersburg-based Baltika is the largest brewery in Eastern Europe, and its Baltika-branded beer the most widely sold in the vast Russian market.
Carlsberg Chief Executive Joergen Buhl Rasmussen said the company's performance in Russia was "unsatisfactory" and it would aim to recover market share lost to its peers in the past year, as it abstained from taking part in a large-scale promotions to protect its margin. But he added that, if market dynamics don't change as predicted during 2012, the brewer may step up promotions to match peers.
The Russian beer market was challenging in 2011, as steep inflation, high input prices and the introduction in 2010 of a hefty new levy on alcohol sales forced brewers to hike sales prices by as much as 30%, causing the market to contract as consumers turned to other drinks or scaled down their intake.
But stocking up in Russia ahead of the implementation on Jan 1, 2012, of a new tax, boosted Carlsberg's sold beer volumes in the country by 14%, helping the quarterly earnings surge.
Fourth-quarter net profit rose sharply to DKK912 million from DKK316 million, comfortably beating the DKK827.7 million analysts expected. Group sales rose 11% to DKK14.85 billion from DKK13.40 billion, slightly above expectations.
Sales growth was also driven by continued strong growth in Carlsberg's Asian markets and higher prices as Carlsberg pushed ahead with its gradual shift towards higher-premium beers. In the full year, the product mix improved 5%, it said, helped partly by 7% growth within the premium segment of its flagship Carlsberg brand.
At 1031 GMT, Carlsberg's shares were up 1.8% at DKK436.7, in an overall Copenhagen OMX C20 index, which traded up 1.3%.
23 Feb. 2012