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. ...
Influx of brands comes to Russia despite new law on beer
“This was made just two days ago. It’s fresh,” said Masaru Hemmi, chief brewer of Japan’s Kirin Ichiban, pouring at the Moscow Beer Company’s factory in Mytishchi. The occasion was last month’s start of licensed local production of Ichiban.
Both sides feel justified in pouring a few well-earned drinks. The Moscow Beer Company reckons it can sell Ichiban, which is one of the most popular beers in its home country, to Japanese restaurants and food enthusiasts. Ichiban is confident it has secured its foothold in the $20 billion Russian beer market.
Despite the optimism, these are not easy times for Russian brewers. Over the past decade, the beer market surged by 40 percent, but then the global economic crisis, increased taxes on alcohol and saturation depressed the market by as much as 15 percent, causing the country to slip from third to fourth place worldwide for total consumption.
“Russia has lost 12 [million] to 15 million hectoliters [roughly 10.26 million to 12.78 million U.S. beer barrels],” said Igor Dementyev, general director of The Moscow Beer Company, a midsized brewer. “That means that approximately five or six breweries like us should be closed. And it is happening; a lot of breweries have been closed and will be closed.”
Domestically produced beers, like cars, carry a certain amount of stigma. Even foreign brands produced under license are widely considered to be inferior to genuine imports. Specifically, this is linked to an alleged propensity to cause headaches.
“Abroad, drinking a six-pack of Heineken is no problem. Here, two bottles will give me a headache,” complained one beer aficionado.
One urban legend links the mysterious headaches to extra alcohol — or more sinister chemicals — added to popular brands to keep the population docile.
However, there’s not much choice but to buy Russian. High import tariffs mean that imported beers make up just 0.5 percent of the market — compared with about 15 percent in the United States.
In Russia, that segment is largely replaced by licensed domestic production. There are more than 40 foreign brands now produced locally — ranging from classic Czech lagers such as Pilsner Urquell (produced by SABMillerin Kaluga) to iconic Irish stout Guinness (produced by Heineken in St. Petersburg).
The Moscow Beer Company has seven licenses on the books, including a 40-year contract to produce German Oettinger and a 25-year contract with Denmark’s Faxe, as well as its new deal with Kirin. The local beer market is a battlefield of giants, with little room for small independent breweries. Carlsberg Group, AB InBev, Efes Breweries International, Heineken and SABMiller together control more than 85 percent of the market.
Baltika, which is the biggest brand and part of the Carlsberg Group, has a total brewing capacity of 5.2 million hectoliters [approximately 4.4 million U.S. beer barrels] per month.
By comparison, The Moscow Beer Company, which started out as an importer of beers and soft drinks in 1994 and only began producing its own brews in 2008, turns out just 2.5 million hectoliters [approximately 2.1 million U.S. beer barrels] per year.
Market analysts now say Brazil has displaced Russia from its place as the world’s third-largest beer maker, and Germany is snapping at Russia’s heels to move into fourth. So what went wrong?
For a start, Russia is not really among the great beer-drinking nations. Even after the rapid growth in consumption over the past decade, Russians consume just 66 liters (about 139 U.S. pints) of beer annually per capita, according to estimates by Baltika.
Czechs get through a staggering 151 liters (about 319 U.S. pints), while Germans drink 108 liters (about 228 U.S. pints) annually, according to a 2010 report by Carlsberg.
Experts put the drop down to three factors: The market was probably saturated anyway; the financial crisis of 2008 ate into disposable incomes; and the government has drastically ratcheted up taxes on beer.
The beer excise went up 200 percent, from three rubles per liter to 9 rubles per liter, in January 2010. This year the tax is up to 11 rubles, and plans exist for further hikes.
The real heavy hitters are the Russian brands — which account for the remaining 85 percent of the market. The biggest selling local brand (and the jewel in Carlsberg’s Russian crown) is the Baltika product line, which accounts for 40 percent of all beer sales in Russia.
16 Авг. 2011