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.
Korea. Sales of imported premium beer swell
Sales of imported premium beer are on the rise with a growing number of young consumers preferring foreign beers to domestic brands, prompting Korean brewers to pump up imports of Japanese brands.
About 45 million liters of imported beer was sold in Korea last year, up 11 percent from a year ago.
Japanese beer was the most popular with 18,252 tons worth $12.35 million sold, followed by Dutch (9,509 tons worth $10.92 million) and American (5,601 tons worth $8.82 million), according to statistics from the Korea Customs Service.
Imported beer still accounts for only about 4 percent of the annual Korean beer demand which amounts to 3.5 trillion won. The share of imported beer used to be in the 3 percent range two to three years ago, but is now nearing 5 percent.
According to the nation’s largest supermarket chain E-Mart, sales of imported beer in the first month and half of this year jumped 56.2 percent from a year ago, while sales of most other booze dropped.
Imported premium beers selling in Korean market
Only sales of imported beer gained in the same period at third largest retail outlet Lotte Mart as well.
Market watchers said Korean retailers are increasing imports of European beers as the Seoul-Brussels free trade agreement phases out tariffs on European beers within seven years. The FTA took effect on July 1 last year.
E-Mart, which sells 200 types of imported beer including Tibetan and Brazilian brands, increased the volume of beers in its imported beer corner this year.
Imports of Japanese beer have soared most.
Japan’s Asahi has the biggest share ? 30 percent ? of the imported beer market, which excludes foreign beers that are produced in Korea, such as Budweiser and Hoegarden. Asahi beat Heineken, which had kept the No. 1 spot for years, for the first time last year.
Sales of Asahi surged 20 percent from 2010 to some 12.6 million liters last year, which translates into more than 100 billion won in revenue.
Lotte began importing Asahi in 2000. Starting with sales in hotels, Japanese restaurants and clubs, Asahi expanded into supermarkets and convenience stores, showing an annual average sales growth of 48 percent between 2005 and 2011.
“We aim at a 20 percent growth to sales of 1.5 million boxes this year through an aggressive sales promotion policy,” a Lotte Asahi Co. official said.
The company plans to increase the number of bars that sell Asahi draft beer from last year’s 500 to 4,000 this year.
As Asahi, which takes up more than 90 percent of the Japanese beer sales in Korea, is produced in China, it tastes fresher than beer imported from further away, according to industry watchers.
They attribute Asahi’s success also to Koreans’ preference for Japanese companies’ brewing methods and Lotte’s distribution power.
With the demand for Japanese beer expected to keep growing, other Korean companies have jumped into the import business.
Oriental Brewery Co. has imported Suntory Premium Malts of Japan’s third largest brewer Suntory since late 2010.
Hiscot Co., a subsidiary of Hite-Jinro Group, has imported Kirin’s premium bottled beer Ichiban Shibori since 2004, and added canned beer and draft beer to its import list this year. Hite-Jinro is reviewing domestic production of Kirin beers through a technological partnership.
Maeil Dairies Co. began sales of Sapporo beers last year through a subsidiary named M’s Beverage Co. To reinforce the sales of Sapporo premium beers in Korea, Sapporo International Inc. acquired a 15-percent stake in M’s Beverage last month.
Maeil is also reportedly seeking to import Yebisu, Sapporo’s premium beer brand.
Korean breweries are taking steps to expand the sales of imported premium beer in a bid to improve profitability, as it is easier to raise the prices of imported booze compared to domestic beverages, market analysts say.
The decades-old rivalry between Oriental Brewery and Hite, which acquired soju maker Jinro in 2005, is expected to enter a new stage when Lotte Chilsung Beverage Co. builds a beer factory by 2017.
The beverage arm of Lotte signed a preliminary agreement with the municipal government of Cheongju, North Chungcheong Province, last month to build a brewery with an annual beer production capacity of 500 million liters in the city’s new industrial park from 2015 to 2017.
29 Feb. 2012