Beer market of Russia 2018
- General market picture
- Foreign trade setting records
- Demography as challenge to branding
- Aged consumer
- Declining of youth brands
- Nostalgia on trend
- DIOT feels at home
- 5.0 Original is the new face of import
- Positions of Market Leaders
- Carlsberg Group
- AB InBev Efes
- AB InBev
Ukrainian beer market 2018
- Better than yesterday
- Performance by value
- Positions of Ukrainian brewers
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. ...
Why beer giants are scrambling for Nigerian market
But if local players didn’t know or knew, but showed no interest, SABMiller, a South African brewing giant knew and made a grand entry into the market. Its coming has since rattled the market, giving the hitherto two giants in the industry a run for their money.
SABMiller, South African world brewing giant, in 2009, bought Pabod Breweries, Port Harcourt where it owns 57 per cent and Voltic Nigeria Limited (Voltic produces tablewater), Lagos owning 80 per cent of the company, and Standard Breweries in Ibadan, using these companies for soft landing in Nigeria. For over five years or thereabout, this world number two brewer tried to open shop in Nigeria. In its quest to tap is not a $3 billion (N45.9 billion) informal market, the giant brewer is encouraging farmers to raise cassava and barley for its new discount beers.
Beer sales in developed markets, according to industry sources, are losing sparkle so SABMiller is looking to the relatively untapped African market to help drive future growth. But with an estimated 315 million Africans living on less than $1 (N150.90) a day—roughly the same cost as a bottle of beer—commercial brews such as SABMiller’s Peroni and Miller Genuine Draft are beyond the reach of vast swathes of the population.
Low-income consumers have traditionally made home-brewed hooch from local ingredients that range from bananas and watermelons to root vegetables. In Nigeria for instance, we have local beers called Burukutu and Pito. Other variants which fall into the ‘hot drink’ group are known as Shepee and Aburo in the local parlance.
But in an apparent response to SABMiller’s entry into the Nigerian market, Heineken N.V., Nigerian Breweries Plc parent company stepped up the struggle for domination of the Nigerian beer market in Nigeria with its acquisition of two holding companies from the Sona Group which has controlling interests in five breweries in Nigeria.
Heineken’s buying of Sona Group’s Sona Breweries PLC, Sango Ota, Ogun State, International Beer & Beverages Ind. Ltd., Kaduna State, Champion Breweries PLC, Uyo, Akwa-Ibom State, Life Breweries Co. Ltd, Onitsha, Anambra State, Benue Brewery Ltd, Makurdi, Benue State is seen by industry players as a move to strengthen Nigerian Breweries position in the Nigerian beer market and a further response to SABMiller’s entry into Nigerian market. Of the five breweries being acquired, Champion Breweries is listed.
Analysts believe that the acquisition provides Heineken with an additional technical capacity of 3.7 million hectolitres, helping to alleviate the company’s current capacity constraints in the market and improving the geographic location of its breweries.
And interestingly, this Heineken’s move is clearly a smooth move to puncture SABMiller’s momentous strategic entry into the Nigerian beer market from the fringes, what with acquiring breweries in Onitsha, Uyo, and Makurdi. SABMiller which is currently operating from Port Harcourt, moved Voltic Nigeria Limited from Lagos to the South East, and is putting up a brewing plant in Onitsha. Heineken is taking the battle to them.
Guinness has just commissioned a new brewery that has taken its production capacity to about 5.5mn hectolitres, and capacity utilization is expected to be more than 80 per cent. So it is expected the entire beer market will grow by a further 15 per cent to about 22.5mn hl this year.
This will enable Heineken to take advantage of the attractive future growth opportunities that exist in different regions of the country. The acquisition has been funded from existing resources. The transaction price has not been disclosed. It was gathered that Heineken would explore the possibility of consolidating the newly acquired breweries into its existing business structure in Nigeria during 2011. Discussions with Nigerian Breweries and Consolidated Breweries will begin now that the transaction has been finalised.
The acquired breweries will continue to provide and expand contract brewing services to Nigerian Breweries and Consolidated Breweries for the meantime, while continuing to own, brew and support the Goldberg, Williams Dark Ale and Malta Gold brands as well as various smaller regional brands.
Commenting on the Heineken acquisition, Tom de Man, President Africa & Middle East of Heineken, said: “This important move reflects Heineken’s strategy of increasing our exposure to and growth from developing markets. Nigeria is one of the world’s most exciting beer markets and one of the most important countries for Heineken. This acquisition underlines our ongoing commitment to the country and will significantly strengthen our platform for future growth.”
And only two weeks ago, Guinness Nigeria Plc, the local unit of Diageo Plc (DGE), heightened the ongoing beer war tempo by announcing plans to spend 52 billion naira ($335.8 million) on expanding brewing capacity in the country this year. The Guinness move, is no doubt, an apparent response to the Heineken N.V.’s acquisition of two holding companies from the Sona Group, which has controlling interests in five breweries in Nigeria, and SABMiller Africa’s entry into Nigeria.
What Vetiva, other analysts say about the unfolding scenario
Vetiva Research predicts a blooming market for investors in the beer market in Nigeria. It argues according to the IMF, the Nigerian economy is estimated to grow at an average of 7 per cent over the next four years while the population is expected to grow at about 3 per cent. “This along with a youthful population enmeshed in a culture in which entertainment has gained a foot-hold, present key drivers for the Nigerian beer market. A growing, largely youthful population, with increased disposable incomes is expected to drive beer consumption, leading us to estimate that the Nigerian beer market will grow at an average of 8 per cent over the next 5 years,” the Lagos based research company says.
It adds: “The ‘two big giants’ (Nigerian Breweries and Guinness) have long operated in Nigeria, controlling about 90 per cent of the market- Guinness with its niche stout brand and Nigerian Breweries with its prime Star Lager Beer. Both owned by world beer giants (Diageo and Heineken respectively), these two have wielded control of the market, with essentially only each other as competition. With the entrance of another beer giant, SABMiller into the space in 2008, competition has begun to heat up. However, it is unlikely that the ‘two giants’ would concede their hold on the market, without putting up a good show of strength to defend their market shares.
“Nevertheless, the low level of penetration in the Nigerian beer market (as evidenced by the beer consumption per capita of about 10 litres, compared with an African average of 14.6 litres) clearly leaves room for brewers to take advantage of the underlying growth potentials in Nigeria. While the premium end of the beer market still has some play for the brewers to make, the current competition seems set to re-shape the low end of the market. Improving levels of disposable income following economic expansion, means that there is some market to capture at the low end, as drinkers switch from home brewed drinks to low end beers.”
Biodun Adedipe, chief consultant, B. Adedipe Associates Limited, a frontline management and financial consulting company argues that the expansion of breweries will create more jobs, “but the technology being more sophisticated than what existed before now, might mean more capital intensive production technology”. “The number of jobs created might not match the volume of investments. But surely, new jobs will come on line,” he says.
For Adedipe, the volume and efficiency demands that will enable any of the breweries take best advantage of the market opportunities will require investments in new technology. “In particular, for all the existing breweries acquired, it is not so much as engaging them as they are, but completely replacing the plant, which will naturally come with new technology.”
He argues the variety of products in the market that will arise from the consolidation and expansion of the brewery industry will create value for the consumers, while the looming heightened competition will be an incentive for innovation and creativity.
28 Мар. 2011