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’s Chief Financial and Executive Officers about performance in Asia Pacific in 2015
Asia Pacific continued to show strong momentum with consolidated beer volume up 6.3% organically. Strong volumes in Vietnam, Cambodia, Myanmar, Korea, and Sri Lanka offset weaker volumes in China and Indonesia.
In Vietnam beer volume grew double digit driven by a strong performance of the Tiger brand. Heineken also had a strong start to 2015 boosted by the Vietnamese Tet new year, and was up low single digit for the year. Volume in Vietnam benefited from improved consumer confidence, as well as the success of the portfolio strategy, and strong commercial execution.
Regional revenue per hectolitre was down 2.1%, adversely impacted by negative country mix, and adjusting for this it would have been up 1%. The region also delivered strong organic profit growth of just under 10%, particularly driven by the strong performance in Vietnam as well as Mongolia, Singapore, Sri Lanka, and Korea.
Projects in 2015 included extensions in Brazil, China, Cambodia and Ethiopia.
Heineken opened a new brewery in Myanmar in July and will open one in Shanghai during the first half of 2016. Also the company announced that in the coming years, they will be building breweries in Mexico, Brazil, Ivory Coast and East Timor.
“It goes with stop and go, like we see in China today, like we see in Brazil today, like we see in Nigeria today, you have some countries which definitely are going into a stop. We believe medium and long term that those countries remain a go. And therefore we invested in these countries” – Jean-François van Boxmeer told to investors.
On Asia Pacific Heineken is particularly pleased with the evolution of the margin of Vietnam, and this is supported by the strong growth in Vietnam and also by the fact the positive effect of the currency of Vietnam.
“So while some other emerging markets had actually a headwind on transactional - on currency, Vietnam had a little bit of favourable wind on that. So that's the combination of the two. But really the strong growth of Vietnam is what drives the margin in Asia Pacific” - Laurence Debroux mentioned.
17 Feb. 2016