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. The Beer Cafe is looking to raise nearly $40 mn from PE funds
“The beer chain is looking to raise fresh round of growth capital to expand its business in newer geographies. BTB has been out in the market to raise capital and is expected to close the round by the middle of next month (February),” said one of the two persons quoted above.
The company has hired investment bank Avendus Capital to help raise the funds. This would be the third round of fund-raising for the chain, and comes after a gap of over a year.
The company had previously raised two rounds of funding from venture capital firm Mayfield Fund. During its last round of fund-raising in December 2014, it raised Rs.30 crore from Granite Hill Capital and Mayfield Fund.
“Its existing investor Mayfield is expected to back the company during this round and they have also met all the large funds,” said the second person cited above.
Both spoke on condition of anonymity.
Rahul Singh, the founder of The Beer Cafe, said in an email response to queries from Mint that the process of raising funds would start “in April 2016, so should be able to close in 3-4 months from there”.
Nikhil Khattau, managing director at Mayfield Advisors Pvt. Ltd, declined to comment for this story.
The beer chain, which started operations in 2012, runs 29 outlets across 10 cities, including Mumbai, New Delhi, Chandigarh, Bengaluru, Amritsar, Gurgaon and Pune.
It offers imported and craft beers and has been looking to expand to the southern part of the country. The chain offers its customers 50 brands of beer from across 17 countries.
According to data available with the Registrar of Companies (RoC), The Beer Cafe’s revenue more than doubled to Rs.33 crore during financial year 2014-15, from Rs.13.7 crore the previous year.
The company reported a loss of Rs.11.3 crore in 2014-15.
Fund-raising by restaurant and cafe chains increased last year. According to VCCEdge, the financial research platform of VCCircle, private equity investors infused $232.5 million in the restaurant space in 2015, a jump of 80% over the previous year.
“It’s still an early stage of market development in beer cafes. There is a lot of interest from consumers as well as from investors in this format of cafes,” said Ravi Wazir, a hospitality business consultant based in Mumbai.
The number of beer cafes and microbreweries will increase in the coming years, he added.
1 Feb. 2016