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.
Vietnam. Who is the most profitable beer maker?
The Vietnamese beer market is fertile land for beer manufacturers. According to the Vietnam Beverage Association (VBA), Vietnam consumed 3.1 billion liters of beer in 2014, worth $4.56 billion.
The domestic beer market is dominated by three names – Sabeco, a 100 percent Vietnamese owned enterprise which owns Sai Gon Beer and 333 brands; Habeco which owns Ha Noi Beer; and VBL which distributes foreign branded products.
Sabeco has been leading the domestic market for many years. With revenue of VND30 trillion in 2014, it could not be outstripped by any other manufacturer. The company made a high jump in the last four years with the double growth rate.
Euromonitor, in its report released in 2014, put Sabeco on the first position in the list of the breweries with the market share of 46 percent.
An analyst noted that Sabeco enjoys many great advantages. First, it sells products with prices affordable to the majority of Vietnamese and the taste suitable to the majority of consumers in the south. If compared with Habeco, whose products are dominant in the northern market, Sabeco, which is more popular in the south, has a larger market where consumers are more willing to pay for beer.
However, Sabeco is the manufacturer which has highest turnover. It is VBL, a joint venture between SATRA, the Saigon Trade Corporation and Heineken Asia Pacific, which makes the biggest profit, though its turnover is lower than Sabeco’s.
Focusing on providing foreign branded beer products such as Heineken, Tiger and Biere-Larue, VBL’s turnover in 2014 was the second biggest in the market, which was equal to 2/3 of Sabeco’s, but the profit was much higher than Sabeco’s.
Sabeco’s last year made a profit of VND3.9 trillion, much lower than that earned by VBL. And even the profit of Sabeco and Habeco, the two Vietnamese biggest breweries, in total was still lower than that of the distributor of foreign branded products.
The figures show that the profit margin in the sales of foreign products is far more attractive than Vietnamese.
The analyst noted Vietnamese breweries cannot make fatter profits than foreign ones despite the larger market shares they are holding because Vietnamese manufacturers target common people and sell products at reasonable prices, while foreign ones target high income earners, who are willing to pay high for high-end products and stay unhurt from any economic crisis.
18 Dec. 2015