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.
Global Beer Wars
As the world's largest energy companies continue to make discoveries off the eastern coast of Africa, they will soon have several choices of refreshment after a long day of drilling.
Diageo (NYSE: DEO ) and SAB Miller have both closed deals in East Africa and are poised to duke it out over market share in Uganda, Kenya, and Tanzania. Diageo has invested $1 billion in Africa over the last four years. The company's Kenyan subsidiary, East African Breweries, recorded a first-half profit increase of 17%. Sales for the unit were up 36%.
SAB Miller invested $80 million to build a new beer plant and double the capacity of its Nile Brewing subsidiary. It has also invested $1.75 billion in Africa over the last four years.
Many companies are making an effort to expand their presence in Eastern Europe before this summer's Euro 2012 soccer tournament in June, and Anheuser-Busch InBev (NYSE: BUD ) is no exception. The company plans to open six to 10 new locations for its Belgian Beer Cafe franchise in Poland, where half of the games will be played.
Anheuser-Busch also has its eye on a pricey Czech lager. Competition is stiff for StarBev, the brewer of Staropramen, as SABMiller (SBMRY.PK), Heineken (HINKY.PK), and Molson Coors (NYSE: TAP ) are expected to look at the $3 billion operation as well.
An interesting point here is that Anheuser-Busch actually used to own StarBev and sold it to CVC Capital Partners in 2009. The potentially lucrative developing economies in Eastern Europe may prove to be a strong enough siren song for the beverage giant to repurchase the company.
Though China's economy is huge compared to the examples above, it will continue to grow at a breakneck pace. As a result, Anheuser-Busch is competing with the likes of SABMiller, Tsingtao, and China Resources Enterprise to purchase Chinese company Kingway Brewery Holdings.
Kingway is the third-largest player in Guangdong province, one of the wealthiest in China. The brand holds a 15% market share there, and the unit is expected to sell for $550 million.
China is the world's largest beer consumer, but I like the East African play the best. There isn't as much competition, and those economies could really take off as energy investments pour into the region in the next five years.
29 Feb. 2012