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.
Anheuser-Busch InBev, Modelo deal could pave way for SABMiller ‘mega-merger’
The 81-page study – Global Beer: the Road to Monopoly – published by advocacy group the American Antitrust Institute, examines recent consolidation in the sector and assesses its future make-up. A-B InBev last week said it is “working proactively” with US regulators over the Modelo deal, having had approval in Canada, the UK and Mexico.
“The manner in which the DOJ (Department of Justice) treats the A-B InBev-Modelo transaction will provide clues to how it might treat a merger of the two leading suppliers of the US market and the world market,” the report says.
In July, A-B InBev's CEO, Carlos Brito, argued that the combination of A-B InBev and Modelo will make "no change" to the US beer market.
On the long-rumoured merger between A-B InBev and SABMiller, the report highlights that “it is becoming more difficult for beer companies to expand their businesses without entering new markets and absorbing existing facilities”.
It adds: “Some analysts see this as a good geographic match for the two companies. A-B InBev is strong in North America and China. SABMiller has greater international presence, particularly in high-growth emerging markets in Latin America and Africa.”
However, the report's author, Bernard Ascher, also flags one commentator's view that a combination of the “bitter rivals” would be like “a merger of Catholics and Protestants”.
"The two giant firms are keen rivals with different strategies and business cultures," Ascher says in the report. "Both firms, however, are publicly owned and need to show profits and growth to their stockholders at a time when it has become more difficult to grow without mergers and acquisitions”.
Ascher also suggests that further acquisitions of US craft brewers by larger companies is likely, following A-B InBev's purchase of Goose Island last year.
22 Nov. 2012