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.
Malaysia. GAB: Business As Usual Despite Ownership Change
GAB MD Hans Essaadi said despite having a new parent entity, GAB is committed towards its business model which has propelled it to become a leading brewer in the market with a strong product line.
“We also do not expect any rebranding or renaming by GAB post-Heineken acquisition. GAB has always been a local entity. The advantages of being a locally listed company are enormous. Although we have foreign owners and shareholders, we are perceived as a local brewer.
“With the Guinness, Anchor and Tiger brands, we are perceived as a fantastic local brewer and we want to stay that way,” he told The Malaysian Reserve last Friday.
Heineken now wholly owns GAPL, which in turn holds a 51% interest in GAB.
GAB produces and sells a portfolio of beers and non-alcoholic malt beverages including Tiger, Anchor, Guinness and Malta brands.
GAPL, on the other hand, is the licensee for Guinness and ABC Stout distribution for the Singapore market.
GAPL was one of the two joint ventures that Amsterdam-based Heineken had taken control of in a deal worth US$781 million (RM3.38 billion) in October.
Besides GAPL, Heineken also bought a 57.9% stake in Jamaicanlisted Desnoes & Geddes which sells the Red Stripe beer brand.
That purchase effectively raised its stake to 73.3%.
Due to the changes in stakeholding, he said GAB is migrating its information technology system to suit Heineken’s.
“It would keep our people busy in the short term. But we are trying to make the integration as seamless as possible,” he said, adding that the integration requires minor adjustment at the company level.
“Otherwise, it’s business as usual,” he said.
Meanwhile, Essaadi said GAB has inked a long-term brewing and distribution agreement with Diageo plc, for the former to continue brewing and marketing Guinnessbrand beverages.
“The ownership change was a significant step for GAB. But the Guinness products are still very important for us, and Heineken is fully aware of that,” he added.
On projections for 2016, Essaadi said it would be a tough business environment for fast-moving consumer goods (FMCG) companies like GAB.
He said the Goods and Services Tax and political landscape are among the reasons behind the weak market sentiments.
“If you listen to the market, it is telling you that it’s not easy out there. People are quite scared and that depresses consumer demand.
“When we talk to competing FMCG companies, they all feel the pressure,” he said.
However, he said GAB’s business is quite resilient with a strong market position to absorb any drop. GAB recorded a 15.6% year-on-year increase in net profit to RM63.1 million for the first-quarter ended Sept 30, 2015.
The brewer also achieved 3% revenue growth to RM405 million, driven by higher sales and improved cost efficiency.
17 Dec. 2015