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.
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.
Chinese beer slowdown but silver lining emerging
However, while this is a huge concern to Australia’s malt barley industry, leaders from within the malt industry have said the change in drinking habits in China towards a preference for imported premium beer and lower malt production from Europe may soften the blow.
Speaking at the Barley Australia forum in Adelaide last month, Paul Rigoni, Barrett Burston Malting, said the slowdown in the Chinese economy was lowering consumption among poorer consumers while the more affluent were switching towards imported beer.
Trevor Perryman, Malteurop, said the Chinese malting sector also had an image problem among its neighbours.
“Throughout Asia, consumers are often a little suspicious of food products of Chinese origin and this applies to malt.
It all boils down to a slowdown in the Chinese malting industry, but Mr Perryman said it was not necessarily bad news for Australia’s barley sector, saying Australian-produced malt would be in demand.
“Australian malt still has that premium image so it may be that we have the odd situation of us being a niche player on a macro scale.”
“We’ve got good authenticity and good accreditation process and that will go a long way.”
The scale of the production numbers in China are staggering, there is still more unused capacity for malting that can be turned on than the entire malting capacity in Australia.
However, Mr Perryman said it would not necessarily translate into competition for malt exports.
“A lot of the capacity is inland and it can’t be exported economically.”
Mr Rigoni said Australia also had good opportunities in emerging beer drinking markets such as Vietnam and Myanmar where beer consumption is rising quickly.
He also highlighted India as a market to watch.
“The country will be a complex market, but it is big and will get bigger.”
Domestically, Australian farmers are benefiting from the rise of the high value craft beer industry.
“In Australia, nine per cent of the total dollar value of the beer industry is from craft brewers and we have seen over 100 new breweries come on line over the last couple of years.”
“The craft beer industry is now worth $400 million out of a total beer market of $4.3 billion.”
Mr Rigoni predicted potential further growth, saying in the US, a similar market to Australia, the craft sector was worth 19.3pc of the total beer market.
He said craft beer was good for maltsters and barley producers as it had high inclusion rates of barley.
And it will not just be the Australian craft beer boom that benefits Aussie barley producers.
“We are starting to see craft beer made in Japan and Korea and they may look to use Australian barley in their product.”
6 Oct. 2016