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.
Uganda. Beer sector leaps in profits as economy soldiers on
NBL: Over 100 billion in 2011 in VAT and Excise Duty
UBL: Over 80.8 billion in 2011 in VAT and Excise Duty
Uganda’s one of the biggest five beer consumers in Africa with a consumption capacity of 8 liters/individual/annum
• Czech Republic—135 liters: biggest beer consumer in the world
• South Africa—60 liters: biggest beer consumer in Africa
• Uganda—8 liters per annum: among the top 5 biggest beer consumers in Africa. (South Africa, Gabon, Namibia, Uganda and Kenya)
Commercial Beer Production Capacity
• NBL (Jinja Plant)-1.8 million hectoliters per year
• UBL (Port Bell Plant) -1 million hectoliters per year, expected to increase by 50 percent to 1.5 million hectoliters before the end of this year.
• Parambot (Gayaza Plant)-0.1 millionhectoliters
Despite their shrinking spending power, Ugandans are consuming large volumes of beer. This is backed by the 36 per cent growth in profits that players in the beer sector have registered in the past year.
Statistics on beer consumption for the financial period ended December 31 2011 alone show that commercial beer consumption in Uganda grew by more than 28 per cent throughout the 12 months, a trend which is expected to continue in the coming years as there are still unexploited opportunities in the local beer market, even with the consumption of commercial beer compared to locally brewed alcohol is still very low.
Both the World Health Organisation (WHO) and Canadean; an international beverage information specialist ranks Uganda among the countries with the largest frequent beer drinkers in Africa.
Reports from WHO for example, rank Uganda as one of the highest consumer of beer in Africa with an average consumption of eight litres per annum. However, it’s important to note that commercial beer consumption only accounts for 5 per cent of the total alcohol consumption for Uganda. This is still very low compared to the 94 per cent informal alcohol (locally brewed) consumption in Uganda.
The growth of beer consumption is boosted by a string of factors that include; GDP growth, rapidly growing population, laissez-faire government policies on beer, aggressive marketing and improvements in the quality and appearance of beer brands.
In an interview with Prosper, Mr Nick Jenkinson, the managing director of Nile Breweries Limited (NBL), a subsidiary of SABMiller Group, majorly attributes the positive outlook of the sector to the fast growing population and GDP growth in Uganda.
“Uganda is indeed a viable market for beer in Africa. The consumption of commercial beer has greatly improved in the past years. GDP growth and a rapidly increasing population are driving consumers to trade up from cheap informal alcohol to more expensive commercial branded alcohol,” Mr Jenkinson said, adding: “This trend is likely to continue for the foreseeable future while the economy expands and consumers become more affluent. The western region is the fastest growing beer market with about 25 per cent growth.”
Contrary to this, in an interview, Mr Oscar Kintu, a distributor of beer in the southern region, related the current beer consumption to hard economic times that leave Ugandans with fewer alternatives apart from drinking in order to manage stress.
“Several people are drinking beer but not because they have free money to spend. Many are in bars because the situation has dictated. With this endless load shedding and growing unemployment, people are forced to be in bars during both day and night. Because of this idealness, more beer bottles are sipped and this is reflected in the growth figures. It does not necessarily mean that people have money as they are spending the very little they earn on beer.”
The beer sector has three main players. These are Jinja based NBL, Uganda Breweries Limited(UBL), a subsidiary of East African Breweries Limited based at Port Bell and Parambot Breweries, manufacturers of Moonberg lager based in Gayaza.
As of the end of 2011, NBL announced that it had acquired a slightly higher stake on the Ugandan market, overriding UBL that had dominated this sector for quite a while.
“I will not give specific figures but by the end of 2011, we were the market leaders in this sector. Our production and revenue figures reflect this. We even hope to do much better this year,” Mr Nick Jenkinson, NBL managing director said.
To this, Mr Alasdair Musselwhite, the managing director of UBL said; “The sector is very volatile and market situations change very swiftly. They can be leading today and in the next couple of months we are in the lead again. We need to see their source of information. But then UBL posted very good results in the last quarter. This shows that we too are doing well.”
Today, both NBL and UBL are involved in active battles over control of the local beer market with each of them investing massively in increasing production capacity and streamlining distribution lines.
NBL currently operates one brewery in Jinja, which was originally completed in 1956, and underwent a USD 29 million expansion in 2009. This doubled its production capacity from 0.9 million hectoliters to 1.8 hectoliters annually.
However early this year, NBL, commissioned the construction of a new $80 million (Shs190 billion) plant in Mbarara, which is expected to begin producing by mid-2013 with a starting production capacity of 0. 65 million hectoliters of beer per year.
According to Mr James Mulwana, the chairman of NBL, the construction of a plant in Mbarara is in direct response to the high beer demand that in a few years will no longer be manageable with only the Jinja Plant.
On the other hand, UBL, has also already increased its production capacity at the Luzira based Port Bell Brewery from 0.75 million hectoliters per annum to 1 million hectoliters per annum, plus revamping its bottling section to meet the market demands. The Port Bell brewery is currently undergoing renovation to increase its production capacity to 1.5 million hectoliters before the end of 2012.
Uganda records highest beer consumption regionally
The recently read EABL half-year results for the period up to December 31 2011 show that the Uganda section had the highest growth in beer consumption with top-line revenue growth of 43 per cent.
While speaking to Prosper, Mr Alasdair Musselwhite, the managing director of UBL, said; “With the big market available reflected by our high turnover, we are now concentrating on capacity expansion in order to meet demand. Our investments in capacity expansion will allow us to fully utilise local grain content, increase our brewing capacity and ultimately enable us build sufficient capacity to fully satisfy the needs of our ever growing customers,” Mr Alasdair said.
In a separate interview, Mr Tom Burunguriza, the acting executive director of Uganda Investment Authority, said the continued investments by these companies is good for both revenue generation and employment creation.
“These companies give strong support to our economy. The more they invest, the more the economy benefits. Minus them contributing direct revenue, through their old and new investments they continue to employ more people from within us.”
Parambot Breweries; the local manufacturers of Moonberg Lager are the other player in the sector. Their contribution to the sector is minimal but growing with more presence in urban areas. Last year, they put on the market about 0.1 million hectoliters of beer.
By the end of 2011, more than 70 per cent of the resources used to manufacture beer by these companies were got from Ugandan soils. These include water, cereals; sorghum, millet, and barleys among others.
Globally, average beer consumption stands at about 27 litres with Czech Republic as the highest beer consumer in the world with a consumption level of 135 litres per annum.
In Africa, South Africa is the biggest beer consumer at an average of 60 litres/individual/annum. This is followed by Gabon, Namibia, Kenya, and Uganda at 8 litres/annum.
7 Mar. 2012