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.
Kirin Follows Heineken With $2.2 Billion Offer; Shares Tumble
Kirin is seeking to acquire Fraser & Neave Ltd.’s food and beverages unit as part of a proposed takeover of the Singapore- based company by a group led by Overseas Union Enterprise Ltd. (OUE) The OUE group offered S$13.1 billion for F&N yesterday, topping a bid from Thai billionaire Charoen Sirivadhanabhakdi, and said Kirin will buy the food and beverage unit.
Shares of Kirin tumbled the most in a year today on concern whether the investment will pay off. The Tokyo-based company, which generates a higher percentage of sales from overseas than any other Japanese drinks maker with revenue exceeding $1 billion, is seeking further expansion abroad as demand weakens at home and growth at its Australian unit stutters.
“Investors are now worried,” Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo, said by telephone today. “They’re concerned whether it will turn out to be expensive shopping without rewards.”
Kirin, which owns a 14.8 percent stake in F&N, will tender its shares to OUE and won’t accept any competing proposal, OUE said. Kirin is “aware of the announcement,” Kan Yamamoto, a spokesman, said by telephone. He declined to comment further.
Kirin fell 2.6 percent to 965 yen as of 10:28 a.m. in Tokyo trading. The stock earlier dropped 4.7 percent, headed for the largest decline since November last year. The drinks maker’s shares have lost 33 percent in the past three years, compared with a 13 percent decline for the broader Topix index.
The company cut its 2015 sales forecast in October, citing weakening demand in Japan as a reason. Industrywide beer sales in Japan fell 3.7 percent to 442 million cases last year, the lowest level since records began in 1992.
Heineken got shareholder approval in September to buy F&N’s stake in its brewing joint venture, Asia Pacific Breweries Ltd. (APB), giving it full control over sales and distribution of its brands and F&N’s Tiger beer brand in Southeast Asia. Heineken had been spurred to increase its original offer for APB after Charoen purchased shares in F&N and APB.
Kirin had been considering a bid for the F&N food and drink unit in July, three people with knowledge of the situation said at the time, after Heineken’s initial bid for APB.
The Japanese company also has a 48 percent stake in the Philippines’ San Miguel Brewery Inc. In November last year, Kirin agreed to buy out shareholders in Brazil’s Schincariol Participacoes e Representacoes to diversify its beer sales footprint. The deal at the time valued the brewer at about $3.6 billion, excluding debt.
Leuven, Belgium-based AB InBev, the world’s biggest brewer, agreed to buy control of Mexico’s Grupo Modelo SAB for $20.2 billion this year.
F&N has been in the food and beverage business since 1883, producing soft drinks, milk drinks, ice cream and isotonic drinks under F&N Foods Pte. and Malaysia’s Fraser & Neave Holdings Bhd. (FNH), according to its website.
16 Nov. 2012