The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
India. Singh Sheikhawat: consumer is far more promiscuous today than he ever was
Samar Singh Sheikhawat knows a thing or two about wooing the Indian consumer. Even before taking over as senior vice-president of marketing at India’s biggest beer maker United Breweries Ltd in 2009, the consumer goods veteran played an instrumental role in putting Tropicana (now owned by PepsiCo) on the map and as Dabur’s head of sales and marketing.
Samar Singh Sheikhawat Sheikhawat completed his MBA from Symbiosis, Pune. Post this, he started his career with Cadbury India Ltd in 1989 and then went on to work with companies such as Hindustan Unilever Ltd (ice cream business), Energiser Batteries Ltd, PepsiCo and Spencer’s Retail Ltd in various capacities. He joined United Breweries Ltd as senior vice-president of marketing in November 2009.
In an interview, the teetotaller lamented the death of customer loyalty and spoke about the struggles tied to wooing younger drinkers and why India is not ready for diet beer. Edited excerpts:
Why do you say it is harder to win customers these days?
In the old days, availability and making sure your product reached point of sales/point of consumption was perhaps sufficient to ensure trial. Today, like in every other category, consumers are buying in wider repertoire than ever before. Loyalty is a fickle bedfellow so to speak. The consumer is far more promiscuous today than he ever was. Earlier on, we would say your most-often-used brand is, let’s say, six or seven times out of your last ten purchases. Today, if you are buying it four times out of ten, then that’s your most-often-used brand.
Are you spending more on marketing now than before?
Every brand is on TV. We have done some six films with our packaged drinking water which is a legitimate brand, which I think is the fourth-largest in the packaged drinking water brand in the country. You have Tuborg on air, have Carlsberg on air, you have Fosters on Air, you have got us on air, you have 4-5 different brands that are on TV, so the amount of spends on mainstream TV for beer has increased significantly. Digital is a huge area of intervention.
Traditionally you have focused on a few key events such as IPL to promote your brands. Will that change?
Kingfisher has always been associated with sports, food, fashion and music. Sports is the single largest. The single largest sporting event in this country is IPL. It is bigger than Euro, World Cup, Copa America, Olympics and Champions League. More importantly, it’s not just sport: it’s entertainment, glamour. I call it “India’s largest reality show”. So yes, we will continue to invest very heavily there.
Tell us about Pitchers and how it came about.
Pitchers is a story about four young people who quit their jobs to start up a business and how their lives are governed by KF (Kingfisher) beer. It is a new web series that is based around an office situation. Very interestingly, we took the idea of Pitchers from the start-up web series that TVF had produced and we have actually launched a real world app called Pitchers, which we hope will become the Zomato of the drinks and night life world. We will be launching in Delhi, Mumbai.
Has your job as a marketer become easier because of your wider reach through social media and new selling channels?
I think it has become much tougher because consumers expect much more—they want it here, they want it now. If you don’t give it, they will go somewhere else. They will not spend extra time looking for your brand. They get turned off by pure sponsorship, by pure advertisement. They believe every advertisement has an agenda. There need to be checks and balances in digital.
We are not allowed to sell alcohol through e-commerce for instance. Otherwise I guarantee you that we would have dominated that segment as well.
What is your biggest challenge these days?
The repertoire is the single biggest consumer challenge for us. The same consumer is buying on a regular basis 4-5 different brands of beer. Increasingly, loyalty is much harder to come by and they are just buying wider numbers which means one brand may not necessarily have all the solutions. The larger challenge for us is change of consumer taste. A youngster does not want to drink the beer his father drank or driver drinks.
What amount of your revenue goes into marketing?
Six to seven percent. Revenues also increase. Even if it (marketing spend) remains flat, the absolute numbers keep going up.
Are Indians still partial to a stronger brew of beer?
About 85% of the Indian beer market is strong. (It won’t change) till alcohol gets consumed in our country as refreshment.
What are some of the things you are experimenting with?
We have been very proactive with our brand launches.
Seven new brands in seven years is unthinkable in the alcohol industry. It is a scorching pace in any consumer product industry. You cannot address all consumer choice and preference in a single offering.
Do you worry about the rise of micro breweries?
It is still small volumes—90% of them are still making losses. It’s really small but growing at a good pace. We are closely watching it, analysing it, evaluating it.
The whole philosophy of microbrewery is different in India from that of America. In America, it’s anti-establishment. In India, it’s a cool place to go, be seen.
Is India ready for a diet beer?
We have tried KF Diet, maybe it was ahead of its time. Low calorie in India gets decoded as low alcohol. That’s what people don’t want. They want high alcohol. So, if you sell something diet, it gets decoded as low alcohol. Unlike in the cigarette business, where you have Marlboro lights and Kings Lights, here low calorie is decoded as low alcohol. (For many in India), the main reason to drink is to get a certain kick. But never say never.
How are you dealing with the liquor ban in Bihar and closures in Tamil Nadu?
How do you prepare for something like that?
We work in whatever environment we are given. You cannot prepare for something like this. Sometimes you get an indication. That’s the nature of business. We been in this business for a long time, we are used to policy changes.
Whatever the law is in letter and spirit, we are compliant. Foster ad, Tuborg ad... that product does not exist (their ads promoting soda in beer-shaped bottles). You are unnecessarily playing with fire, pushing your boundaries.
What is your read on rural demand?
Too early to tell. The year has just started. Hinterland is all about strong beer, driven by daily wage labourers, truck drivers, field labourers. All of this is related to agricultural income. This year is supposed to get 104-106% of monsoon compared to last year. This is good news for us because it fuels income in the hinterland and therefore drives consumption. We can only tell in the third quarter.
6 Jul. 2016