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.
India. Under Michael Jensen, Carlsberg has more than doubled its business
"It's not difficult if you are little young at heart. But you want to remind yourself constantly that what I know might not be what other people want. So listen to consumers," said Jensen. So far, he has his ears to ground. For a man with an MSc in Marketing, Market Analysis and Consumer Behaviour and another in International Business, Trade, and Tax Law, that shouldn't be difficult, even if the country is as diverse as India.
Unlike most other markets, where Carlsberg's top seller is the milder version of lager, Jensen has been focusing on brands such as Tuborg Strong and Elephant in India because strong beer accounts for 80% of country's overall sales volume of 300 million cases.
His bet seems to be paying off — while the Copenhagen headquartered firm is still a fifth in size compared to Heineken-owned United Breweries in India, the company has managed to take its share to nearly 16% of the market from about 6% five years ago. And Tuborg is the largest premium international beer brand in the country.
Carlsberg is the third largest player in India, trailing market leader United Breweries which has 51% share and SabMiller with 23% share of the market. But in a country that, for the past three years, have seen tipplers sobering up and market growth slowing to 5%, Carlsberg has been growing by more than 40% each year. The company attributed the growth to focus on key markets, especially cities, keeping its brand portfolio limited and expanding its manufacturing footprint.
"We have doubled our reach to 40,000 outlets but have kept our focus on top 140 cities. By forgeting the rest, you can concentrate on offering coolers and use of signboards in a better way," said Jensen.
The parent company in its long term strategy — Sail 22 — has identified China, India and Vietnam as key drivers for growth. This fuels Carlberg's aggressive expansion — it now has seven breweries on ground and 2 co-packers in India.
The alcoholic beverages industry in India is heavily regulated, with excise and other taxes forming an important source of revenue for state governments. In states that collectively account for 70% of the industry's revenue, the government controls manufacturing, distribution, retailing and pricing of liquor. This makes it difficult for most companies to make higher profits.
For instance, a 650 ml bottle of Carlsberg costs Rs 60 in the western coastal state of Goa but in West Bengal, it sells for Rs 130 and in Maharashtra, Goa's bigger neighbour, its retails at Rs 160. While the industry has been lobbying to sort the multiplicity of tax issues with the government, Jensen likes to deal with it in his own Danish way. "I grab a cold beer and put my feet up. The world suddenly becomes far better."
19 Aug. 2016