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.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
Russia. Beer roams the regions
In 2015, four international brewing companies such as Carlsberg, Heineken, Anheuser-Busch InBev and Efes lost their share on the Russian beer market. As a result, the production of small local breweries, which in 2010 accounted for about 15%, for the first time occupied more than one-quarter of the market. Economics plays against transnational giants: due to the crisis, consumers increasingly prefer inexpensive local varieties. Beer consumption in Russia, at year-end was the lowest over the past 12 years.
In 2015, the Russian beer market decreased by 10%, the Danish concern Carlsberg stated in its report. Its volume amounted to 698 million decalitres, Baltika, the Russian of Carlsberg, explained, noting that beer consumption last year was the lowest over the past 12 years – 50 litres per capita (the peak of consumption was in 2007-2008, with 77 litres). According to the Federal State Statistics Service (Rosstat), in 2015 beer production in Russia has decreased by 5.1% to 782 million decalitres.
The shipments of Carlsberg in Russia have decreased by 17% over the past year, its closest competitor Heineken (the company also reported yesterday) by 7-9%. “The negative impact on the overall situation on the beer market had difficult trading conditions and low consumer activity”, Heineken commented the results. The decrease of shipments Carlsberg explained by to the reduction in warehouse stocks at distributors due to “the continued rapid shift of sales from the chain of the traditional trade into the chain modern trade”, as well as the company has raised prices on their products before its competitors.
Carlsberg mentioned that the growing popularity of cheap local brands is another factor which negatively impacted last year's shipment.
For the same reason, obviously, the company, as well as of its three multinational competitors, in 2015 reduced its market share (see table). At the same time, as we can seen from the Nielsen data, the total share of other companies amounted to 26.5 %, having risen by 3 percentage points over the year.
Pavel Erankevich, the director of development national and regional brands of Baltika notes that local manufacturers (over 700 breweries) have been increasing their market share largely due to sales of “take-home” draught and packed beer in the low-price segment. According to him, the prerequisites for this, was the current macroeconomic situation.
Marina Lapenkova, the head of Nielsen group on work with companies in the beer industry explains the success of small breweries primarily by price. “They have, on average, lower price than the federal producers, and it is growing more slowly,” Mrs. Lapenkova explained. Moreover, she notes, local beer is perceived by consumers “as familiar and accessible”.
Nielsen believes that the trend of the growth of local manufacturers will continue in 2016, explaining that in the next couple of years there will be no radical changes in consumer behavior in this product category.
In the meantime, the major beer companies stopped their Russian enterprises, due to the reduction of beer consumption. In total, they had closed 12 breweries since 2008: five breweries had been closed by Anheuser-Busch Inbev, two by Heineken, three by Carlsberg and two by Efes.
|Name||Brands||Market share in 2015 (%)||Market share in 2014 (%)|
|Carlsberg||Baltika, Carlsberg, Holsten||34,7||36,8|
|Heineken||Heineken, Krusovice, Okhota||12,9||13,1|
|Anheuser-Busch InBev||Bud, Klinskoe, Stella Artois||12,8||13,2|
|Efes||Efes Pilsener, Stariy Melnik, Miller||13||13,4|
Source: "Nielsen Russia".
*Shares are given by volume.
11 Feb. 2016