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.
Will a big brewery be the price for A-B’s Modelo deal?
Antitrust newsletter The Capitol Report last week wrote the U.S. Dept. of Justice may force A-B InBev to sell off Modelo's giant Piedras Negras brewery, to appease its concerns about unfair competition in the wake of the deal.
Capitol Report cited unnamed antitrust attorneys and beer industry sources. And neither the Justice Department nor ABI have been commenting on the $20 billion merger, which is set to close in the first quarter of 2013. But antitrust concerns have dogged the deal since its announcement in June, and were a big reason why A-B handed off U.S. distribution rights for Corona and other Modelo brews to Constellation Brands.
But simply giving up rights to sell beer may not be enough to pass federal muster. A-B would still make the stuff and could, theoretically, influence its price.
Selling off the Piedras Negras brewery — which has enough capacity to fill much of Corona's U.S. demand and sits just minutes south of the border — would add yet another layer of separation between A-B's Modelo products and the U.S. market.
It's unclear who the buyer would be, but the arrangement would resemble DOJ's orders in 2008, when InBev agreed to sell off rights to its Canadian brand Labatt in the U.S. market in order to acquire A-B.
Selling off the U.S. rights to Modelo — which is the third best-selling brewer in the country with nearly 6 percent of the U.S. beer market — would obviously be a bigger thing. But given ABI's global ambitions for Corona, analysts say giving up the U.S. market may well be a deal they're willing to make.
"We do not view this as a deal-breaker," wrote Bernstein Research analyst Trevor Stirling in a note on the topic.
Meanwhile, the principals in the deal are still sounding an optimistic note. Constellation chief executive Rob Sands was upbeat Monday at a conference held by trade publication Beer Marketer's Insights, saying the process "is going entirely as expected." When asked if "major concession" - i.e. selling a brewery - would be necessary to close the deal, according to BMI, Sands said: "We don't anticipate that that will be necessary."
14 Nov. 2012