Dmitry Nekrasov’s Philosophy — on the Past, Present and Future of Ukrainian Brewing IndustryA meeting with Dmitry Nekrasov always turns into a training course: “Introduction to brewing business“. We are talking to a clever “playing trainer“ a person that can be called a godfather of the Ukrainian craft. He has a dozen of successful projects to his name. Dmitry told us about craft beer in Ukraine, on market cycles, on specifity of operating in retail and HoReCa, on union of Ukrainian brewers and certainly, how a brewery of his own, First Dnipro Brewery is doing.
The market of import beer in Russia: review and databasesThe market of import beer is rapidly growing and changing. But while in the past years it was growing due to brands variety, in 2019 major and affordable brands from TOP-10 were developing actively. It seems that the fact of a brand origin from far abroad counties, even if it is not well known but has moderate price and good distribution provides for million liters of sales in the territory of Russia. Among distributors AB InBev Efes was far behind, yet the role of Baltika and suppliers of the second row got more important. The boom of German brands was followed by stagnation of import from other traditional regions (and Belarus) instead the supplies from Mexico, Lithuania and Asian countries grew considerably.
Russia: Positions of Brewing CompaniesThe 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 brandsIn 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 2019During 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.
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. ...
Recession hangover as Romanian beer market shows no signs of frothing
Summer is a busy time for brewers, when sales usually go up by about 25 percent compared to the average of the rest of the year, Constantin Bratu, general director of the Brewers of Romania Association, told Business Review, adding that it is too early to make estimations for this year’s hot season.“One thing is for sure, this summer’s results will depend on two factors – purchasing power and the weather,” Bratu said.
A pick-up would be more than welcome given how sales have decreased in the past couple of years. The Romanian beer market shrank by 3.5 percent last year, falling to a volume of 17 million hectoliters, according to the Brewers of Romania Association. Over the past two years it has declined by 16 percent against 2008, the year when the volume of beer sales reached a peak of 20.2 million hectoliters.
About 99 percent of the beer consumed in Romania comes from local production, according to the Brewers of Romania Association. The five members of the association – Bergenbier, Heineken Romania, Romaqua Group, United Romanian Breweries Bereprod (URBB) and Ursus Breweries – invested EUR 51 million in 2010, while their contribution to the state budget through various taxes amounted to EUR 270 million, up by EUR 7 million compared with 2009, according to data from the association. 2010 also saw the closure of several factories due to harsher market conditions. Ursus, Heineken and Bergenbier each shut down one production unit last year.
Beer consumption per capita fell to 78 liters in 2010, continuing the decline that started in 2009, further evidence that the economic climate has affected consumers and their consumption habits, according to the association. In terms of packaging, drinkers’ preferences remained constant in 2010 – PET (49.3 percent), glass bottle (31.7 percent), can (16 percent) and draught (3 percent).
Shrinking personal budgets have meant that Romanian consumers have both drunk and also spent less, switching to cheaper brands. Reducing the time spent out has also impacted sales volumes. “Ask any bartender and he will tell you that two years ago the average Joe used to order three beers, and now he’s eking out a single beer for an entire day. This is pretty much what has happened – a drastic decline in consumption,” Tiberiu Mercurian, marketing director of Bergenbier SA, told Business Review.
So far, 2011 hasn’t significantly changed the trends, with the market declining by another 2 percent in the first quarter against the same period of last year, according to Bratu. “Our estimation for 2011 is from flat to a small, single-digit decrease. Consumer confidence is improving; however, the conservative shopping habits that consumers have learned during the last two years are still there and we have yet to see a return to previous behavior. On premise sales are particularly affected as people now go out less frequently to bars and restaurants,” said Grant McKenzie, marketing vice-president at Ursus Breweries.
The prospects of higher sales means that summer is that time of the year when brewers throw big money at promoting their brands. From launching new products to sponsoring music festivals and sports teams, brewers aggressively promote their products in order to boost sales.
“The summer contributes a higher percentage of annual sales volume: three hot summer months can count for about 40 percent of a brand’s sales,” Doron Zilberstein, marketing VP at URBB, told Business Review.
He added that the company’s business strategy during this period has focused on investments in marketing and increasing market presence for a better adaptation to consumer behavior.
In 2010 URBB also entered a new market segment, mineral water, by launching the Bilbor brand. “This year we will continue investments in the Bilbor plant and the exploitation of new sources in the area, investments in the distribution system and other operational investments to improve the bottling lines for beer and juice, as well as in the IT system,” added Zilberstein. The company’s campaign for the beer segment focused on the Skol, Carlsberg and Tuborg brands.
“Our latest research, conducted in June, shows that the three criteria that influence consumers' purchasing decisions when buying beer are, in order: brand preference, choosing one of the available brands but cold, and preference for a particular type of packaging,” he added. Regarding the packaging choice, no changes have occurred from previous years, the order of popularity being PET, followed by glass bottle, can and draught.
This year URBB hopes to see an increase both in volume and sales compared to 2010. “In the first half of this year our company recorded positive results. These are however interim results – sales in the summer months will influence our turnover expectations this year,” the VP concluded.
“In the first half, the market continued to decline, but at a much slower pace than last year. We expect that 2011 will end with a slight decrease from last year, the main reason being the low incomes,” said Mercurian.
Last year the company chose to invest more in its Bergenbier brand and resumed communication for the Beck's and Noroc beers. “We started the year with a brand re-launch for Noroc, we continued with the Man’s Day campaign and summer brought the launch of three new products: Bergenbier Nefiltrata din Grau, Bergenbier Fresh and Staropramen,” added Mercurian. Without disclosing the actual promotion budget for 2011, Mercurian said Bergenbier had “considerably” increased this year’s budget.
At Ursus Breweries the marketing budget for this year is similar to figure for last year, said McKenzie. “In fact it has remained stable through the ‘crisis years’. The costs of marketing have reduced over this period so we now get more for our money,” he added. This summer the company focused on campaigns for the Ursus, Timisoreana, Redd’s, Peroni and Grolsch brands. “Beer market sales in July and August can be close to double the sales in January and February,” he added.
2 Авг. 2011