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.
Carlsberg’s turnaround plan in Russia bears fruit
Like other big brewers, Carlsberg is relying on emerging markets and price rises to offset sluggish demand in western Europe and stiff competition in mature markets.
But its leading position in Russia has been hampered by a government drive aimed at curbing alcohol abuse, with measures taken including excise tax increases and a ban on advertising in all media, including the internet.
The world's fourth-largest brewer said on Wednesday its share of Russia's beer market, where its brands include top-seller Baltika and Tuborg, rose to 38.9 percent in the third quarter from 37.9 percent in April-June.
Its Russian beer sales rose about two percent, contrasting with a 2-3 percent fall in the market overall.
"We are seeing clear signs that we are on the right track in Russia," chief executive Jorgen Buhl Rasmussen told analysts.
A year ago, Carlsberg replaced the head of Russian division Baltika Breweries to address slowing sales.
It has increased its focus on best-selling brands, cutting out those which have not sold well, and taken a more targeted approach to marketing in a country which is seeing a shift from small, local stores to large supermarkets.
"The market share data for the third quarter is an indication that these initiatives are starting to bear fruit," Rasmussen said.
A BATTLE FOR GIANTS
With the improvement in the third quarter, Carlsberg has increased its market share in Russia for three consecutive quarters following a string of declines.
Rivals including Anadolu Efes (AEFES.IS), which is owned by world No. 2 SABMiller (SAB.L), and Dutch group Heineken (HEIN.AS) lost market share in the quarter, while Anheuser-Busch InBev (ABI.BR) held its ground, Carlsberg said.
Carlsberg shares were up 3.8 percent at 537.5 Danish crowns by 1250 GMT, one of the biggest rises by a European blue-chip stock .FTEU3.
"The result is particularly positive in Russia," said Sydbank analyst Morten Imsgard. "I see this as a sign that they are in control of the Russian business."
Group operating profit rose almost 10 percent to 3.6 billion crowns ($618 million) in the quarter, compared with a forecast for 3.72 billion crowns in a Reuters poll. Sales grew to 18.8 billion crowns against a forecast 18.6 billion.
Eastern Europe and Asian sales cushioned continued sluggish demand in western Europe, where sales contributed 55 percent of total group revenue while eastern Europe made up 32 percent.
"The positive is that they grew in Russia in the third quarter," Alm Brand analyst Stig Nymann said.
Carlsberg kept its 2012 outlook for operating profit before one-off items to be at the same level as in 2011 when it reached 9.82 billion crowns.
($1 = 5.8276 Danish crowns) (Editing by Dan Lalor and Mark Potter)
13 Nov. 2012