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.
China. Crafting a new beer boom
"I had never imagined beer-drinking could produce varied experiences of tastes wildly different from one another. Until now, beer was just an economical refresher for me, particularly on scorching summer days. All those cans and bottles of different brands tasted the same more or less. But craft beer－phew, it's different, and like wines now ... high-end beverages, with qualities that match their high price," Li said.
In Shanghai these days, consumers can buy more than 200 varieties of craft beer at high-end groceries, brewery-run outlets, boutique dining bars or through home-delivery services. Prices range between 30 yuan ($4.5) and 100 yuan per liter.
Investors are eyeing the craft beer market as segment expansion appears on the horizon and demand for niche products rises, said experts.
According to Wang Deliang, brewery research director with the China National Research Institute of Food & Fermentation Industries, investments in the craft beer segment have been rising in recent years because of prospects of high profits of up to 30 percent.
Investments need not be high as in other liquor segments like whisky because craft beer, a niche product, is not produced on a mass scale, said Wang.
Take Beijing-based Panda Brew that started in 2013. It has so far received 20 million yuan from a handful of investors, including venture capital firm Tiantu Capital. Its capacity has increased to annual output of some 1,000 metric tons, which is supplied to 50 cities across China.
Seeing such market potential, large brewers are jumping on the craft beer bandwagon. Earlier this year, Guangzhou Zhujiang Brewery Group Co Ltd announced it will launch four facilities to produce craft beer and use online distribution channels to sell it.
Investments in consumption-driven sectors, particularly high-end food and beverages, picked up in recent years because consumers have been upwardly mobile. Supply-side reforms have also helped improve operational efficiencies, improving prospects for profits. An increasing number of consumers have been exposed to a wider range of choices due to travel for work, tourism or education, thus creating demand for new products in the domestic market.
The fizz in the craft beer market reflects consumers' rising individualism and assertiveness with regard to preferences. As the market opens up, more and more imported beer brands, particularly craft beer labels, have increased their offerings in China, according to a research note from consultancy Roland Berger.
While the traditional beer market in China is highly consolidated and dominated by a handful of players, the craft beer brewery market is highly segmented. According to data of Dianping Holdings, China's biggest online food service ratings website and a key information provider, China has more than 3,000 craft beer breweries. Their output and sales revenue are less than 3 percent of the entire beer market.
In the US, craft beer takes about 13 percent of the market share, according to an estimate in a research note of Founders Securities.
Unlike the mild-tasting canned and bottled beer, which is distributed through supermarkets under the big players' brands, craft beer usually has a stronger taste, a result of high-gravity brewing. Each variety of craft beer has a distinct taste as the raw materials used, brewing conditions, techniques, and brewers' flavors vary. Output is usually to the tune of just 1,000 liters per day.
"Limited supply, unique flavors, distinct experience and high-end branding all appeal to the younger generation of consumers who like to have something different," said Michael To, marketing specialist with Shanghai-based Focus Strategy Consultancy Ltd.
Shi Dechuan, a 34-year-old software programmer based in Shanghai, said craft beer made by a local brewery along the road to Yunnan province was most impressive. He discovered the beer while traveling in summer this year.
"You don't really want to drink the same beer when you travel to different places, so craft beer, which uses local fruits, tea leaves, malt and yeast, gives you that sense of locality, and makes a tour different," said Shi.
17 Oct. 2016