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.
Global burger chains add fizz to draw Indian consumers
Both the US-based burger icons have decided to include these new beverages in their menus. While Carl’s Jr has tied up with the country’s largest selling beer brand, Kingfisher, Wendy’s is seeking licences to forge partnerships with Indian wine and beer brands.
“Bringing in wine and beer is a new initiative that we have taken for the Indian market. We are trying to get licences for Indian brands in this segment and keep it as affordable as possible. At the same time, we are not a bar but a burger joint,’’ says Jasper Reid, Director, Sierra Nevada, the franchise company for Wendy’s.
With its mascot as a little freckled girl, Wendy’s positioning may not exactly encourage beer and wine drinkers, but the burger brand has decided to tweak its stance specifically for the Indian market.
Since making money is going to be a long haul for these burger chains, adding new beverage categories is likely to shore up its revenues. “We are aware that India is challenging in terms of getting investment returns. But we want to keep the brand as affordable as we can and are looking to bring in good quality Indian beer and wines into our portfolio,’’ added Reid.
However, it was Carl’s Jr which had the first mover advantage when it decided to introduce beer at its first outlet last year.
“The rest of the burger players got a jolt when we introduced beer in our first outlet in India. But since we address an age group of 18-40, we took the decision to bring beer in India having tried it in certain markets in the US and Russia,’’ said Samir Chopra, Group Chairman, Cybiz Corp, the franchise for Carl’s Jr.
Some of the burger chains have experimented in other markets in these new categories as they want to graduate to an all-day casual dining format. “Burgers and beer go hand-in-hand in continental Europe as many QSRs and burger brands like Johnny Rockets are getting into the casual dining space,’’ observes Chopra.
Meanwhile, the second largest burger brand Burger King, which already has it’s ‘Whopper Bars’ in certain markets may also consider entering such categories in future.
Raj Varman, Chief Executive Officer, Burger King India, said: “We are not ruling out entering wine and beer since we have Whopper bars in certain places like Miami in the US.’’
14 Jan. 2016