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.
Vietnam. Why are investors attracted to Sabeco?
It is the largest brewery in the Vietnamese market, dominating the middle-class beer market segment.
Sabeco has been a joint stock company for eight years, after equitization. However, the state now still holds 89.95 percent of shares, while Heineken holds 5 percent.
Therefore, the joint stock company, by nature, is still a state-owned enterprise. The chairs of the company’s board of directors and other key positions are appointed by the Ministry of Industry and Trade (MOIT).
Sabeco’s managers suggested selling stakes in two campaigns, about 20-30 percent of stakes each. The second campaign will come one year after the first.
Meanwhile, MOIT has recently submitted to the government the plan to sell Sabeco stakes, to reduce the state’s ownership ratio from 89.59 percent to 36 percent.
This means that the new investors will have opportunities to hold controlling stakes in the company.
However, to many people’s surprise, the plan to withdraw the state’s capital and list shares on the bourse was not put into discussion at Sabeco’s shareholders’ meeting held on May 27.
Answering shareholders, Vo Thanh Ha, chair of Sabeco, said Sabeco could not make a decision on the issue and only the state can determine the capital withdrawal process and how much to sell.
As such, Sabeco still does not intend to list its shares, while investors have become impatient. Since equitization, Sabeco has changed its chair of the board of directors twice, but has not fulfilled the promise to list shares.
Some sources said Sabeco doesn’t want to list shares on the bourse at this moment because the brewery fears it may be swallowed by foreign investors. The drink market is a fertile soil which brought VND3-4.5 trillion worth of pre-tax profit every year in the last five years. Its major task in the immediate time is to preserve its strong brand.
Commenting about Sabeco’s value, the Vietnam Association of Financial Investors (VAFI) said 10 years ago, Sabeco, the nation’s leading brewery, was much larger than Vinamilk, the nation’s leading dairy producer with its profit double that of Vinamilk. But nowadays, Vinamilk’s profit is three times higher than Sabeco.
Sabeco’s financial report showed that in 2015, the holding company could create VND8 trillion worth of revenue, or 30 percent of Sabeco’s total revenue, while the remaining was brought by associated businesses and joint ventures.
1 Jun. 2016