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.
Thailand. Bottoms up! ThaiBev bucks weak demand as beer sales fuel growth
When ThaiBev launched a sleek new green bottle for its flagship Chang Beer brand, the market reaction was almost inebriating. The group’s net profit from beer surged by a staggering 207% year-on-year, while its total market share jumped from 30% to 38% in the span of a few quarters.
Analysts note that the extremely good performance from ThaiBev’s beer segment exceeded expectations. Kenneth Ng, analyst at CIMB, noted that the strong Q4 beer sales were not due to channel restocking effect, but was due to more positive market feedback after Chang’s makeover.
“The reality is, customer feedback was good, domestic sales surged and market share gains have come at the expense of [Chang’s rival] Leo. In fact, Thai Bev has actually kept channel inventory relatively light to ensure the freshness of beer stock,” Ng said.
Ng highlighted that thanks to the new green bottle, the price differential between Leo and Chang has narrowed, from THB4-5 two years ago to just THB1 for the big bottles. Small bottles are at price parity.
“Leo is not cutting retail prices but has increased trade rebates, which is effectively a price cut. Management does not believe that the beer fight this round centers around price, but thinks it is possible that Boon Rawd [Leo’s manufacturer] will react in some manner,” Ng noted.
Meanwhile, Jodie Foo, analyst at OCBC Investment Research, noted that apart from strong beer sales, corporate restructuring might prove to ThaiBev’s key growth catalyst this year.
“We understand from management that the corporate restructuring, which has been in talks, is also likely to happen this year. We could see a clearer alignment of business on the shareholdings front,” Foo noted.
2 Mar. 2016