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.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
Sapporo expands target market in Vietnam
According to the Asian Nikkei Review, the new label will be launched on July 28 and is expected to be sold for between VND13,000 and 15,000 (US$58 and 67 cents) per 330 ml can at volume retailers, around 19 cent cheaper than the company’s mainstay Sapporo Premium lager.
The new product will target the middle class. In Vietnam, food stands and large cafeteria-style restaurants sell mid-to-low-price brews that account for the majority the market. The company apparently aims to sell some 150,000 cases of the new product this year.
Sapporo has been exclusively targeting the high-end segment with the Sapporo Premium label.
This segment has recently seen increasing competition, with Vietnam Brewery Limited Company (VBL)’s Heineken, AB Inbev’s Budweiser, Carlsberg Vietnam’s recently launched Tuborg and state-run Sabeco’s Saigon Special.
Competition is tough in the lower-priced segment, too. Low-cost beers in Vietnam, with brands such as Sabeco’s 333 and Saigon or Habeco’s Hanoi beer, and the only foreign player, VBL’s Tiger, all sell at about US$55 cent per 330 ml can or lower.
Sapporo launched Sapporo Vietnam as a joint venture with state-run tobacco company Vinataba in 2010. Last year, Sapporo Holdings bought the partner’s stake to turn Sapporo Vietnam into a wholly owned subsidiary. The company sells the Sapporo Premium beer brand it manufactures at its Long An factory.
The company reported growth in sales in 2015. Sapporo’s plan in Vietnam, according to its 2015 annual report, is to continue expanding and establish its subsidiary as a base for strengthening exports to the region.
In the conference call with general manager of the investor relations section regarding Sapporo Holdings’ results in the first quarter of this year, director Shinichi Soya said the growth of Vietnam’s premium beer market is curbed “due to increased liquor taxes and other factors and competition in the market is also becoming intensified.”
“We made our presence in Vietnam as a bridgehead whereby the Sapporo brand can penetrate Southeast Asia as a premium brand. Currently, we are still more in the phase of gaining recognition rather than securing profit,” he said.
Data by released by Vietnam Beer-Alcohol-Beverage Association showed that 3.4 billion litres of beer was consumed in Vietnam in 2015, up 10% on-year. The growth rate of the beer sector in the last few years is lower than in the 2005-2010 period.
The association forecasted that in 2016 the freshly signed free trade agreements will result in tariffs being lifted on many products, including beer, which is going to pose a big challenge for local companies.
18 Jul. 2016