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.
Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Heineken, Carlsberg Forecast Profit Gains as Asia Sales Rise
Sales and profit will both increase in 2016 even with an “increasingly challenging external environment,’ Amsterdam-based Heineken said in a statement Wednesday. Carlsberg forecast operating profit will rise by a low single-digit percentage on an organic basis as the Copenhagen-based maker of Tuborg beer reported fourth-quarter earnings that beat analysts’ estimates.
Beer sales in oil-producing countries such as Russia and Nigeria have been weighed down by a decline of about 40 percent in the crude price since February last year. Heineken said the Chinese market slowed down last year, especially in the second half, though it offset that growth in other Asian markets. Heineken and Carlsberg are preparing to face an even-bigger competitor from Anheuser-Busch InBev NV’s planned purchase of SABMiller Plc.
“Vietnam is a market that Heineken points out as growing, I would expect the same thing for Carlsberg,” Javier Gonzalez Lastra, an analyst at Berenberg, said by phone. “China is changing, I’m not sure it will be such an exciting market in 2016, but Vietnam and southeast Asia are definitely up and running.”
Heineken shares rose as much as 1 percent in Amsterdam. Carlsberg gained as much as 2.3 percent in Copenhagen. Vietnam is Heineken’s third-largest market, after Mexico and Nigeria.
Profit before some items rose 16 percent to 2.05 billion euros ($2.32 billion) in 2015, Heineken said, matching the average estimate compiled by Bloomberg.
“Russia is not looking good,” due to the collapse in oil prices, Jean-Francois van Boxmeer, Heineken’s chief executive officer, said in an interview. “There is slight pressure in Africa and the Middle East.” The company said margins should expand “in line with our guidance.” The company has a medium-term target of a 40-basis point increase in operating margin.
Market leader Anheuser-Busch InBev agreed to buy nearest rival SABMiller last year in a deal now valued at about 72 billion pounds ($104.1 billion). The companies expect the deal to close in the second half of 2016. Smaller brewers have also gained market share from the larger producers in Europe and the U.S.
Carlsberg is cutting jobs and closing breweries after years of declining profit tied to Russia’s shrinking beer market. Turmoil in Ukraine and the ruble’s decline have dented consumer confidence in the country, where Carlsberg is the largest beermaker through its ownership of Baltika Breweries. The company said it will unveil its new strategy for growth to investors on March 16.
Fourth-quarter earnings before interest, taxes and one-time items fell 21 percent to 1.41 billion kroner ($210 million). The average of analyst estimates compiled by Bloomberg was for 1.22 billion kroner.
“Our businesses in western and eastern Europe had a challenging year,” Cees ’t Hart, chief executive officer since June, said in the statement. “As a consequence of the strong Asian results, however, 2015 marked the inflection point when the growth markets of Asia accounted for a larger part of the group than eastern Europe.”
The brewer has had a good start to the year in Russia and Carlsberg is interested in the craft beer segment, the CEO said on a call with reporters.
10 Feb. 2016