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.
Vietnam. Saigon Beer Can Quench Asahi’s Thirst
AB InBev and SABMiller, Heineken, Asahi, Kirin, ThaiBev and Singha Asia have all registered to bid for stakes in state-owned Sabeco, maker of Saigon Beer and 333. With a price tag of at least $1.8 billion and a government facing a ballooning budget deficit, interested parties don't need to beat down the door.
"The government wants to sell its stake as soon as possible," Sabeco CEO Le Hong Xanh told Bloomberg News. "All we care about is who will pay the most."
Vietnam had one of the world's fastest rates of growth in GDP per capita during 2015
Vietnam has real attractions for brewers, whose revenue tends to be linked to the size and wealth of a country's key beer-drinking demographic, its working-age population.
The Southeast Asian nation was one of the world's 10 fastest-growing economies in 2015, and its demographic statistics are even more attractive. By 2030, it's likely to add about five million people between the ages of 15 and 64, giving it a bigger working-age population than Japan:
Vietnam's working-age population will overtake Japan's by 2030
Japan is the player to watch in this contest. Most brewers based in rich countries with stagnant local demographics have worked hard in recent decades to give themselves global reach, but Japan's local heroes have fallen behind. Asahi makes 86 percent of its revenue at home, followed by Sapporo at 82 percent and Kirin at 65 percent.
Drinking at Home
Domestic sales make up a bigger share of revenue at Asahi than at any other big rich-country brewer
It's Asahi that most needs a deal of this sort. Kirin has already struck alliances with Tsingtao and the Philippines' San Miguel in Asia, and it owns Brazil's second-biggest brewer, the former Schincariol. Asahi's biggest deal to date, an acquisition of AB InBev's Peroni and Grolsch brands in Europe, makes much less sense.
Vietnam's government doesn't look to be asking an excessive amount for its 90 percent stake, either. Sabeco has a 40 percent share of the local market, but the $1.8 billion value the state has put on the business is only 11 times forecast 2016 net income of 3.76 trillion dong ($169 million). That's a steal relative to the median 40 times net income multiple in 17 brewery deals worldwide over the past five years.
Analysts expect Asahi to generate 214 billion yen ($2.1 billion) of free cash flow by the end of 2018, so it certainly has the money to make an acquisition. Its problem is slow top-line growth: After seeing revenue climb 27 percent in the four years through 2015, forecasts show a 4.1 percent increase in the same period to 2019.
Vietnam is still something of a frontier market, and Asahi's overseas forays haven't always ended happily. But in this instance it shouldn't be put off by the substantial lineup of interested players. There may be a crush at the bar, but Asahi is a company badly in need of refreshment.
9 Sep. 2016