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3-2019

Russia: Positions of Brewing Companies

The review contains an analysis of interim performance of brewers in the first half of 2019. There are rather dynamic changes behind a modest industry growth. Baltika is again experiencing a stage of volumes and market share slid due to competition with AB InBev Efes. Because of the price competition and presence expansion in the modern trade company #2. has come close to the leading position. At the same time sales of Heineken Russia have continued growing which makes the premium part of the portfolio heavier. The market premiumization trend had been also confirmed by import brands. MBC and Zavod Trekhsosenskiy have been the most successful among federal market players. The market share of independent regional brewers and Ochakovo have continued falling as they are being squeezed out by the market leaders at their competitive fields.

Ukrainian beer market 2019: companies and brands

In 2019 beer production and market have been still fluctuating about zero point. However, the past season was successful for brewers judging by the sales profitability. The price mix has improved due to rapid general market premiumization, as well as its particular aspect, the growth of import beer sales. By the season end AB InBev Efes improved its positions considerably. It turned out that consumers had not forgot Efes brands that had to leave the market, but started to recover rapidly. Against the stagnating market that meant sales decline of other companies, in the first place Carlsberg Group that most of all beneficiated from Efes exiting the market. PPB turned out to be stable to branding activity of its competitor and Obolon kept the same volumes and at the moment it is the absolute leader of the economy segment. The share growth of independent producers took place thanks to leading craft breweries, that so far do not have a big market weight, but they are rapidly gaining it.

Brewing industry in Kazakhstan 2019

During the first half of 2019, the majority of Kazakh brewers made their contribution into positive dynamics. Yet it was companies of the lower division, not the two transnational leaders that raised their production and sales. The shares of draft beer and aluminum can which is rapidly squeezing glass bottle out of the market, have been growing. The price segmentation has remained stable despite the substantial rise of retail prices and fluctuations of brand market shares, while the borders between segments have become blurred. The main events in the industry have been: the announced revision of the beer excise policy, launch of BeerKhan brand in the strong beer segment, and most important – purchasing assets of Shymkentbeer by Arasan.

Global brewers: too much froth

Order a beer in Amsterdam and it is served with a big foamy head, something that can make drinkers feel they are the victim of the publican’s cost saving programme. Investors in Dutch brewer Heineken may feel the same way. At first read, its first-quarter results on Wednesday appeared sound. On a like-for-like basis, Heineken sold 5.5 per cent more beer than in the same quarter last year. Things were similar at rival SABMiller. On Tuesday, the London-listed brewer, revealed volume growth last quarter rose by 3 per cent.
Sounds great; but hold the backslapping. At Heineken, underlying revenues grew by only 3.6 per cent as its price and sales mix fell 2 per cent. At SABMiller, revenue per litre produced rose only 3 per cent. Much of this is attributable to pricing pressures in European economies with high unemployment. So to keep bottom line growth in double-digits, the only option is to continue ripping out costs – a strategy most brewers have employed with aplomb.
But costs can only be reduced so far before long-term effects crop up. Of particular concern is the potential effect on penetration into emerging markets if brewers attempt to subsidise their shaky western European business with a spendthrift attitude in fast-growing regions such as Africa, where costs are often higher because of poor infrastructure and the need to import machinery.
The large brewers trade at about 16 times their forward earnings, almost a 50 per cent premium to the S&P Euro 350 index. Clearly investors expect growth. But if revenues continue to underperform volumes, delivering on those expectations will be difficult. That could leave investors in the same position as Dutch drinkers; paying for a full glass but not quite receiving one.

21 Апр. 2011

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