The trend of complication of Russian beer market is going on and in several directions at the same time. The range has got wider, the import and small segments are growing, namely craft beer, alcohol-free beer and special flavor beer. At the same time, all ex-mega brands and light lagers by Russian brewers are experiencing a decline of their shares. AB InBev Efes, Heineken, MBC and Pivzavod Trekhsosenskiy have exceeded the market, Carlsberg was developing slower than the market and Ochakovo as well as some other mid-sized breweries have been cutting down their volumes. To a big extent brewers’ performance was connected to their ability to reach agreement with networks, sacrifice their margin and enter new markets. Craft brewers are facing a serious danger of producers’ registration introduction – de facto licensing. ...
The global outlooks of the legal market of cannabis are excellent. It is possible to simultaneously imagine dry law repeal and craft brewing boom but not in one but in several consumer categories. For alcohol is contained in liquids and cannabis derivatives can be in three physical forms.The value of legal market of cannabis and its products can reach 10% of the world beer market in five years, and in 2030-2040 even reach the same scope provided the current rates of legalization and development of market infrastructure remain at the same level. Cannabinoids are actively integrating into the food industry from chewing gum to beverages deforming the pharmaceutical and alcohol markets, they influence the trends of healthy lifestyle and beauty. ...
Beer market of Kazakhstan acquired both traits of East European countries and South Eastern Asia taking a transitional position between them by many criteria and consumption style. Yet there is a positive trend in beer production which differs Kazakhstan from most of the neighboring countries. The market has remained consolidated in the hands of two international players because of its small size. However, it faces dynamic processes such as fast growth of draft beer sales, up and downs of regional companies and Carlsberg Group’s ultimate expansion. Excessive mainstream segment has declined over the recent years, yet, Zhigulevskoe and national brands with regional links have yielded their positions to a range of new products. In our review special attention was paid to regional analysis of the markets. In 14 regions of Kazakhstan we compared the companies’ positions, the market price segmentation and DIOT channel development. Besides we have compared the beer market of Kazakhstan to neighboring countries. ...
Brewing giants spoil for another battle in Africa
In most markets that it operates and particularly those it considers critical for growth, the company has developed an irritating habit of manufacturing competitive chaos through strategies packaged as symbiotic partnerships or subtle acquisitions but whose objectives are targeted at taking control of the market.
The tactic has always worked. In most of the 33 African countries the company has operations, SABMiller either entered through a partnership with a small player or acquisition of a little known manufacturer.
But it often doesn’t take long before it disrupts the status quo with massive investments and unleashes its financial muscle and experience to generate chaos and excitement, something that always catapult it from a player on the periphery to the core of the beer market in these markets.
"As a company, we are always looking for growth prospects and we believe Africa offers numerous opportunities," observed SABMiller Head of Media Relations Nigel Fairbrass in a past interview.
The strategy of causing distress to competitors has worked in many markets but in Kenya, a market that SABMiller considers extremely important but which success has been elusive, has largely failed.
Having entered Kenya once and failed to make a lasting mark despite committing significant resources, and today being forced to watch powerlessly as its products in the Kenyan market command a miserable one per cent market share, SABMiller is increasingly getting agitated albeit in boardroom circles.
The company’s flagship product in Kenya, Castle Lager, in the late 90s had threatened to dislodge Tusker Lager as the country’s most popular brand but has over the years fizzled into oblivion.
"SABMiller execs have their guns pointed at Kenya. Already strategies to have the company take another but serious swipe at the local beer market are in motion," a PR consultant who has been consulting for the company told FJ.
Over the past three years, SABMiller has been amassing a massive army in terms of consolidating its operations in countries neighbouring Kenya.
While the investments adding to billions of dollars has propelled the company in terms of increasing its presence in these markets, the bigger objective rotates around putting in place backup mechanisms that would be necessary when SABMiller sets out to wrestle the control of the Kenyan market from the grip of East Africa Breweries Limited (EABL).
During this time, SABMiller has been extremely active in Kenya’s neighbours, including South Sudan, Uganda, Tanzania and Ethiopia with new acquisitions, partnerships and securing long-term contracts with farmers for production of raw materials and investing in new plants or upgrading existing ones.
Though the company maintains its strategies in these countries have no bearings on Kenya, and are entirely designed to grow its market share, it is not lost to observers how they are shaping out like planting the insect called cricket on a competitors’ backyard.
For Kenya’s leading beverage manufacturer, EABL, the chirping sound is becoming unbearable and is causing the company’s top executives sleepless nights.
"SABMiller considers Kenya an important market and whatever is happening in neighbouring countries is meant to lay the foundation for an onslaught on Kenya," said the consultant who has been engaged by SABMiller occasionally.
He added that the company is determined to avoid the mistakes of late 1990s when it entered Kenya without a clear strategy only for it to be overwhelmed by EABL and eventually exited the market in embarrassment.
"Back then SABMiller decided to take on EABL in a rather abrasive manner. Now it is looking at a more sustainable strategy," he stated.
In December last year, SABMiller officially re-entered Kenya after acquiring Crown Foods Limited, the producer of Keringet brand of natural mineral water.
The company, in its typical opaqueness, only said the move was in line with its strategy to grow its continental market reach in the water business.
"It is correct we have acquired 100 per cent of Crown Foods, but we cannot disclose the amount. The deal was completed in December last year," said Fairbrass recently.
Going by the fact that SABMiller has made similar acquisitions in countries like Uganda and Ghana, the decision to buy off Crown Foods might pass as just another acquisition in another country.
But according to people closely monitoring the company’s strategies and possible intentions, the acquisition is part of a scheme to suffocate its competitors in the region and in particular Diageo, which owns a majority stake in EABL and which is a key player in East Africa.
In other words, the company has decided to maintain an active roll in neighbouring countries because an agreement signed in 2002 and which led to its exit of Kenya bars it from engaging in the Kenyan beer market.
SABMiller owns a 20 per cent stake in Kenya Breweries Limited, the EABL subsidiary that distributes its products in Kenya.
"SABMiller will continue to brew its beer brands with Kenya Breweries Ltd under the terms of the 2002 distribution agreement," Brenda Mbathi, EABL corporate affairs director told FJ recently.
Tied by the agreement, and considering EABL is frustrating all efforts to terminate it until it expires – it is unclear that when the agreement expires – SABMiller is not just sitting on its laurels but is gathering an army of investments.
In Kenya, a quiet transformation of Crown Foods is ongoing. Since December, the company has forwarded about 10 expatriates to the local operation, ostensibly to oversee the water business that it is less interested in.
"We have discontinued the only juice brand at Crown and we will be focusing on the water business," Fairbrass told FJ from London.
Jason Schmidt, former Managing Director of Voltic Ghana Ltd, a subsidiary of SABMiller and the leading producer of natural mineral water in Ghana, is heading the team.
In Uganda, the company has enhanced its determination to secure the production of raw materials both barley and sorghum.
Recently, Nile Breweries Limited (NBL), a subsidiary of SABMiller, increased the farm gate barley buying prices by 20 per cent for its contracted farmers across Uganda.
SABMiller owns 60 per cent of NBL, which dominate the Ugandan market with 55 per cent market share ahead of Uganda Breweries Limited (UBL), a subsidiary of EABL.
SABMiller has also invested Sh256 million in a malting plant to process the locally grown barley.
While the move is bound to secure supply of raw materials, reports that the company is encouraging farmers who are not in its fold even in neighbouring Kenya to supply it with the sorghum is raising indigestion at EABL.
EABL, which has been struggling to have a steady supply of sorghum, has engaged about 10,000 farmers in various semi-arid areas across the country and is seeking for more farmers to produce the crop.
Thus EABL is dreading a situation whereby SABMiller would take their bitter rivalry to farmers by enticing them with good buying prices.
In South Sudan, SABMiller announced recently that it plans to invest an additional Sh225 million to increase production capacity of its subsidiary Southern Sudan Beverages Ltd (SSBL).
The company, which is the leading brewer in South Sudan, operates a brewery in Juba whose capacity is set to increase to 500,000 hectolitres in November when the upgrade is completed, up from 350,000 hectolitres.
Considering that South Sudan is still a relatively small market but which is anticipated to growth fast if the new African nation holds together and commits resources for reconstruction and economic growth, analyst contend SABMiller could be increasing production in South Sudan but with eyes directed at Kenya.
It is imperative to note that SABMiller’s tight control of the South Sudan market has made it extremely difficult for EABL to make inroads in the newest nation in Africa, which is a target of many companies seeking diversification and growth.
Though EABL’s has operations in South Sudan, the market is yet to make any significant contribution to its bottom line. According to the company’s 2009/10 financial results, Southern Sudan posted a 14 per cent decline in volumes.
In Tanzania, where SABMiller is the leading brewer through Tanzania Breweries Limited, a battle royale is shaping up after EABL completed the acquisition of a majority stake in Serengeti Breweries Limited.
10 мая. 2011