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.
China contributing to growth of SABMiller revenue
The world’s second-biggest brewer by sales after Anheuser-Busch InBev SA said net producer revenue—which accounts for excise and other taxes—fell 8% for the quarter, a sharper decline than the 5% the company logged a year earlier as SABMiller’s key operating currencies slid against the dollar.
At constant currencies, revenue rose 7% in the three months ended Dec. 31, compared with a 4% rise for the same period a year earlier.
A host of companies that have exposure to emerging markets and report results in U.S. dollars have been hurt lately, as many currencies have tumbled against the dollar. In the last few months of 2015, the South African rand, the Colombian peso, the Tanzanian shilling and the Angolan kwanza all depreciated by more than 20%, while the Polishzloty and the Kenyan shilling have depreciated by more than 10%, noted Berenberg analysts.
SABMiller is currently in the process of being acquired by AB InBev, with the deal expected to close in the second half of this year. The companies have moved to sell parts of SABMiller’s business in the U.S. and Europe to appease regulators, but haven’t yet said what they will do with SABMiller’s 49% stake in a joint venture in China that makes Snow, the world’s largest beer brand by volume.
SABMiller reported a 5% jump in net producer revenue at constant currency for the Asia Pacific region, with China contributing growth of 6% despite lower beverage volumes in the country.
For the quarter, SABMiller logged a 12% increase in Africa, with South Africa growing by 16% as volumes were helped by warm weather. The company recently said it would likely pull out of South Sudan because it can’t access enough foreign exchange to buy raw materials. On Thursday it said it is “evaluating our options.”
Net producer revenue rose 8% in Latin America, buoyed by growth in Colombia and Peru. However volumes of SABMiller’s nonalcoholic malt beverage, Pony Malta, declined following what SABMiller described as “an unfounded rumor that went viral on social media in October.” Media reports last year described a story allegedly circulated in Latin America on popular messenger service WhatsApp about a plant operator’s body being discovered in a Pony Malta storage tank.
In Europe, revenue climbed 6% helped by Romania, the U.K., Poland, the Czech Republic and Slovakia. SABMiller last month confirmed that AB InBev is exploring the sale of its premium brands Peroni and Grolsch and their associated businesses in Italy, the Netherlands and the U.K.
Sales in North America, where SABMiller operates through its MillerCoors joint venture with Molson Coors Brewing Co. fell 1%, a similar decline to a year earlier. Large brewers have struggled to grow sales in the U.S. as consumers have shunned big name lagers for craft beer and spirits.
Soft drinks volumes grew 8%, with double digit growth in Africa and what the company described as a “subdued performance” in Latin America.
21 Jan. 2016