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. ...
India. United Breweries’ profitability may remain under pressure
With its flagship brandKingfisher, UBL accounts for over 52% of the domestic beer market of 20 crore cases annually. Traditionally, Indian beer consumers have a higher preference for strong beer, but a taste for mild varieties is gradually developing. UBL has expanded its key brand in both segments. According to analyst reports, for UBL, both strong and mild beer segments are growing at above industry average rates. UBL clocked a three-fold increase in strong beer volumes in the last four years, with a 27% increased. Its mild beer segment grew nearly two times faster than the industry growth rate, according to a recent brokerage report.
UBL's revenue grew at a compounded annual growth rate of over 25% in the five years ended March 2011. The company was also able to improve its profit margins during the period. This is reflected in a relatively faster compounded growth of 27% in operating profit and 38% jump in net profit during the said period. In FY11, the company's net profit shot up by 73.2%, helped by a 41% growth in sales at Rs 2,788 crore. Its operating margin (before accounting for depreciation) expanded by nearly 200 basis points to 12.9%.
GROWTH DRIVERS AND CONCERNS
Beer consumption forms less than one-fourth of the total organised alcohol beverages market in India. Hence, UBL may have limited scope for overall growth. However, on the positive side, the beer market has been growing in double digits over the last few years. The latest ruling by the Maharashtra government to restrict consumption of spirits to consumers above 25 years of age may impact the growth of this segment.
It includes vodka (which is growing at the fastest clip among other alcohol drinks), whisky ( a healthy double-digit growth), and rum (stable demand pattern). Such a move, if adopted by other states in the country (apart from Delhi, which also has similar restrictions on consumption of spirits) may result in higher consumption of mild beer. UBL has chalked out plans to increase brewing capacity from the FY10 level of 388 million litres. It has announced plans to add nearly 20 million litres of capacity according to data from CMIE's Prowess. The company has initiated expansion at its Karnataka brewery to add 10 million litres. The company plans to spend over `300 crore for expansion. The capacity additions will help UBL to tap more opportunities in the Indian market.
UBL faces steep competition from foreign brands. This may lead to higher advertising expenditure in the future thereby impacting margins. To counter competition, UBL has partnered with Netherlandsbased Heineken to distribute beer in India under the Heineken brand.
UBL is one of the few large liquor companies to grow at a faster pace than peers and to remain profitable over the years. It currently trades at a P/E of 73 which appears to be on the higher side. The stock price has doubled in the last one year and a further increase looks limited since the current valuations more than compensate for the company's future growth potential. Investors may reduce their exposure to the counter and consider fresh buying only at lower levels.
25 Июл. 2011