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.
India. Select FMCG shares trade weak; HUL, Dabur, Colgate hit 52-week low
ITC, Marico, Emami, Dabur India, Colgate-Palmolive (India) and United Breweries trading lower by 1% each on the BSE.
At 11:36 a.m. S&P BSE FMCG index was up marginally by 0.13%, while NSE FMCG index down 0.08% as compared to nearly 1% gain in the benchmark indices.
Thus far in 2016, HUL, Dabur India, Godrej Consumer Products, Britannia Industries, GlaxoSmithkline Consumer Healthcare and United Breweries seen their market price decline by an over 10% each till Friday. The S&P BSE FMCG index dipped 8% and S&P BSE Sensex fell 6.4% during the same period.
ITC was down 1% at Rs 306, after hitting intra-day low of Rs 304 on the BSE. The company’s cigarette revenues for the quarter ended December 2015 (Q3) grew 5.7% year-on-year (YoY), while FMCG growth moderated to 7.1% YoY on sluggish demand and supply disruptions caused by Chennai floods.
Weak demand - particularly in rural markets – coupled with a price deflationary environment and supply chain disruption caused by heavy rainfall and floods in Chennai impacted revenue growth, ITC said in a statement.
HUL was up 1.4% at Rs 783, recovering nearly 2% from its 52-week low of Rs 770 touched on BSE in early morning trade. Colgate-Palmolive (India) down 1% at Rs 871, also its 52-week low, ahead of its Q3 earnings tomorrow.
Revenue growth for large multinational FMCG companies would remain weak on back of decelerating rural demand and economic slowdown. Further the withdrawal of tax benefits would impact net sales growth, said Centrum Broking in Q3 preview.
According to Elara Capital, despite favorable contribution from a late festive season aiding Q3 sales, volume growth does not bring a lot of cheer to companies.
A late winter this year that impacted sales of winter products, along with floods in Chennai and closure of India- Nepal border affected sales of FMCG companies, the broking firm said in a report.
25 Jan. 2016