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.
Interflour is taking a punt on Vietnamese beer drinkers
Interflour, which is jointly owned by Australia’s biggest wheat exporter and co-operative CBH Group and Indonesian company Salim Group, has nine processing facilities in five countries, including Indonesia, Malaysia, Vietnam and Turkey, processing approximately 1.5 million tons of flour a year, according to the company.
Vietnam’s demographics and preference for beer is driving Interflour’s malting plans. Beer is overwhelmingly the country's drink of choice. About 97 percent of all alcohol drunk by Vietnam’s population of 94 million is beer. With beer consumption more than doubling in the past decade, almost one million people reaching the legal drinking age of 18 each year, and incomes on the rise, it is clear why the company has made the move.
“Vietnamese love beer and its demand is increasing rapidly, Heineken [which brews locally] can’t keep up with its supply of beer and production,” said Interflour Group Project Director Joe Pampano.
The company currently has two Vietnamese sites; the recently purchased mill in the port city of Da Nang, and at Cai Mep, about 80 kilometers south of Ho Chi Minh City.
The Cai Mep flour mill and grain storage facility also has a port, which is where the malting plant is being built.
“The port gives us an advantage because we can buy the barley in bulk, but we also shift grain in containers and bags,” said Pampano.
He says barley will not be sourced solely from CBH Group or Australian growers, but from other countries when prices are competitive.
The malting plant will be the first in Southeast Asia, as it is difficult to malt in the tropics. Malting generally needs low temperatures and dry conditions to assist the process. But with modern technology and an expert team, Pampano is confident Interflour will be able to successfully manufacture malt and compete in the growing market.
Interflour hopes to start the malting operations next March, and plans to supply 40 percent of the 460,000 tons of malt currently imported each year.
“Margins on malt will far exceed the margins that we get on flour at the moment,” Pampano says.
“Once we are established it will make it harder for our competitors," the Interflour executive was confident.
28 Jun. 2016