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.
Foreign beers gain in China
The country's drinks market is shifting away from beer and towards wines and spirits as incomes grow and tastes change; per capita consumption has dropped from 37.4 litres to 34.7 litres in two years.
According to a survey by FT Confidential Research, asking which two brands of beer were bought most regularly during the second quarter of 2016, 59.2% selected two domestic beers, with 17.3% choosing two foreign brands.
But a very different picture emerged when looking at higher-income respondents (those with a household income of Rmb300,000 ($41,000) or more).
Among this group, just 33% chose only domestic brands, lower than the 35.1% opting for two foreign brands; the latter figure represented an increase of 16.9 percentage points on a similar survey in the third quarter of 2015.
Local brand Tsingtao remains the most popular brand overall, being chosen by 38% of respondents, but that was 19 percentage points down on Q3 2015, when 57% chose it as one of their regular beer buys.
This shift was especially noticeable among higher-income respondents: just 27.2% of this group opted for Tsingtao in Q2 2016, down a massive 31.2 percentage points in a year.
These consumers are now more likely to pick Budweiser (33.5%), the AB InBev beer. Carlsberg saw the biggest gains, up 10.8 percentage points from a low base, while Heineken and Suntory also increased in preference among higher earners.
A similar if less dramatic picture was evident among lower income groups. Tsingtao saw a 17.3 percentage point drop in preference among those with a household income of Rmb100,000-299,000, while third-placed Budweiser gained 5.2 percentage points; Carlsberg and Heineken also made modest gains.
And for those earning Rmb99,000 or less Tsingtao registered a 19.0 percentage point decline; more were opting for Harbin (up 5.6 percentage points), the AB InBev-owned local brand. And, again, more were choosing Budweiser, Carlsberg and Heineken among their regular beer purchases.
FT Confidential Research noted that foreign-branded beer brewed in China sells for an average $0.67 a litre more than domestic brands, but that consumers appear willing to pay the premium.
It suggested that Chinese brewers needed to build brand identities that are attractive to the country's growing consumer class, something Tsingtao is attempting around its premium ‘1903' product.
Edward Bell of FCB Greater China recently held up the brand as an example of inconsistency in marketing, blaming frequent changes in management.
"Tsingtao is not much more than a bland, but familiar, face in China," he said, "and outside of China, is little more than a cliché for sale in Chinese restaurants."
8 Aug. 2016