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.
Thirsty for growth, foreign brewers pile into Myanmar
Japan's Kirin Holdings and Dutch company Heineken are among those flocking to the market, which was opened after the democratization process began in 2011.
Kirin, which acquired local beer giant Myanmar Brewery last year, is aggressively making inroads with such premium offerings as the flagship Ichiban brand. Heineken, meanwhile, is planning an investment to boost local production capacity this year.
Affluent customers pour into Shan Yoe Yar, an upscale Yangon restaurant, nightly, escaping the humid, hot monsoon weather. The eatery started carrying Kirin's Ichiban draft beer in June. A 31-year-old car dealership manager says he enjoys the beer with friends, noting the beverage's smoothness. Kirin markets Ichiban as a premium 100% malt offering. Without promotional discounts, the beer is priced at 3,000 kyat ($2.53) per mug -- double that of popular local offering Myanmar Beer, sold by Myanmar Brewery. But well-off people who like to try new things are interested, according to the restaurant's manager.
In Myanmar, eateries are a major channel of beer sales, accounting for more than 80% of overall beer consumption in the country. The situation differs greatly from Kirin's home market of Japan, where "drinking in" at home makes up about 70% of beer consumption.
Kirin Senior Executive Officer Takeshi Minakata, who oversees Myanmar Brewery as managing director, says the Myanmar unit will promote Kirin offerings as premium brands at restaurants. By working with wholesalers, the goal is to increase the number of eateries serving Ichiban from around 100 or so now to 150 by the end of the year.
Outstanding growth potential
In Myanmar, per-capita beer consumption is a mere one-tenth that in Thailand or Vietnam -- at three to four liters yearly. The economic stagnation under the military regime and the stigma of women and youth drinking alcohol -- based on Buddhist customs -- kept a lid on demand for years.
But since the country began democratizing in 2011, demand has surged in urban areas. The market is expected to more than double from 2013 levels to around $700 million in 2018, according to research company Euromonitor.
In May of last year, Danish company Carlsberg launched production in Myanmar, and Heineken followed suit the following month. The Dutch company rolled out Myanmar exclusive brand Regal Seven, aiming to be the leader in premium brands. It plans to spend about $10 million this year to boost its Myanmar output capacity by about 40% to 45,000 kiloliters annually.
Kirin introduced its Black Shield Stout last fall after acquiring Myanmar Brewery. It also has rolled out the 100% malt craft beer Myanmar Premium.
It usually takes about a year to launch a new product. But Kirin halved the process by allocating managers with production expertise -- including Minakata -- to the project. "We now have a complete portfolio ready to compete in the market," Minakata says.
With a market share of 70-80%, Myanmar Brewery has an overwhelming edge over Heineken and Carlsberg, who have shares of around 10%.
But in a rapidly growing market, the competitive landscape could change suddenly.
For Kirin, the battle is a nerve-racking one, especially after a slump in Brazil. The company shelled out about 300 billion yen ($2.97 billion at current rates) for the acquisition of Schincariol five years ago, only to see its market share tumble. Kirin had to write down the operations last year and is urgently trying to turn the business around.
"We can't fail in Myanmar," says a Kirin official in charge of group strategy.
With the Japanese beer market contracting since peaking in 1994, overseas expansion is a must. But Japanese beer brands generally lack global recognition -- posing a challenge for homegrown breweries. Kirin took a 48% stake in Philippine brewer San Miguel in 2009, hoping to use its brands to propel Asian expansion.
3 Aug. 2016