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.
Beer trouble: Why South Korea’s local brewers are crying foul
South Korean beer drinkers are drinking to the more robust flavours of imported brands, encouraged in part by attractive discounts for multi-packs – so much so that local brewers are crying foul over pricing tactics and have asked for government help.
Beer imports surged 43 per cent last year in South Korea, as consumers, among the most enthusiastic beer drinkers in Asia, move beyond often-bland local lagers. Lighter domestic beers may be well-suited to accompany traditional spicy food but Korean drinkers increasingly crave variety.
The jump in imports has seen the two main local brewers – Anheuser-Busch InBev SA’s Oriental Brewery and Hite Jinro – go from commanding 99 percent of the market in 2012 to sliding to 82 percent in the first half of last year – a swift encroachment that is expected to take further ground.
“Foreign beer has boosted its share of the household retail market rapidly and I expect the same trend will emerge as they find favour in bars and restaurants over time,” said Park Sang-jun, an analyst at Kiwoom Securities Co Ltd.
Asahi Group Holdings Ltd and Kirin Holdings Co Ltd have led the invasion – aided by a weak yen, with Japanese products alone accounting for more than a quarter of imports.
European and US brands, helped by free trade agreements in 2011 and 2012, account for about half of imports led by the likes of Heineken. Chinese labels have also made inroads with E-mart, the country’s biggest hypermarket chain noting that Tsingtao’s flagship brew is now its top-selling beer.
The drastic increase for foreign beer is no trivial matter in a country known for consuming the most alcohol per person in the Asia-Pacific region. Beer accounted for 42 percent of the country’s 9.1 trillion won ($8 billion) alcohol market in 2014, government data shows.
But South Korean brewers, including new domestic entrant Lotte Chilsung Beverages Co Ltd, are keen to stem the tide – rolling out new products with higher malt content, expanding exports and making their case to authorities that local laws hamstring their ability to compete.
Where imported brands have no restrictions on discounts or promotions, local brewers cannot by law discount below factory prices.
“Domestic brands have suffered from reverse discrimination as imported beers have more flexibility in their pricing,” said Lee Eun-a, deputy general manager at Oriental Brewery.
South Korea’s Fair Trade Commission said last month it is conducting a review of competition in the beer industry- a statement that analysts view as heralding fewer discounting restrictions for local players.
An Asahi spokesman said that while the company does offer discounts, changing tastes have been the primary force driving the success of imported beer in South Korea.
Yu GoEun, a 24-year-old student in Seoul, who often joins friends for a pint of Hoegaarden, a Belgian wheat beer made by Anheuser-Busch InBev, seems to agree.
“I don’t drink domestic beer for the taste, only when I want to get drunk cheaply,” she said.
14 Apr. 2016