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. ...
Heineken sinks as damp summer, economy hit profits
Rounding off earnings from the world's top four beer makers, the Dutch group painted a familiar picture of economic uncertainty and unemployment driving Europeans and Americans away from bars and cafes, while emerging market consumers drink more.
"It's an implicit profit warning of 13 percent," said Trevor Stirling, beverage analyst at Bernstein Research.
"If you were an optimist you could say that tourists will go back to Egypt and summer in Europe would not be as bad next year, but Greece is unlikely to be better, Russia maybe not and barley prices will be a lot higher."
Heineken is Europe's largest beer maker, with the market leadership in Greece and Italy and number two spots in Ireland, Portugal and Spain, countries either bailed out or seen by many in the financial markets as in line for rescue.
The company's shares were the weakest in the FTSEurofirst 300 index (^FTEU3 - News) of leading European stocks in initial trading, dropping by as much as 16 percent to 30.40 euros, their lowest level in 21 months.
Food and beverage stocks were among the weakest in Europe. Shares of Anheuser-Busch InBev, with half of the sluggish U.S. market, were down 2.6 percent. Carlsberg (Copenhagen:CARLB.CO - News), which cut its outlook last week due to problems in Russia, were 1.9 percent lower.
Heineken trading conditions remained favorable in Latin America, sub-Saharan Africa and Asia-Pacific, but not in developed markets.
"We have seen a very bad summer ... At the same time, we also see in a number of markets, more in Europe and the USA, weak consumer confidence. You see uncertainty reflected in lower on-premise sales," CEO Executive Jean-Francois Boxmeer told a conference call.
Heineken has pushed into Mexico with its purchase last year of the brewing activities of FEMSA (Mexico:FEMSAUB.MX - News; NYSE:FMX - News) and has been buying breweries in Africa, notably Nigeria where it has some 70 percent of the market.
However, western Europe still represented 45 percent of revenue and 65 percent of operating profit in the first half.
Shares in SABMiller (LSE:SAB.L - News), with 70 percent of earnings outside Europe and North America and looking to push into Australia with its Foster's (ASX:FGL.AX - News) bid, were down a more modest 0.6 percent.
The Dutch brewer said it had already experienced weak beer sales in the normally high-selling season of July and early August due to poor summer weather in Europe and worsening consumer sentiment there and in the United States.
The company said this would affect second-half volumes and profit and it now expected full-year net profit before exceptional items and amortization of brands to be broadly in line with last year's level on a like-for-like basis.
Analysts had on average believed Heineken would forecast net profit growth of 12-13 percent.
In the first half, the comparable net profit rose 5.7 percent, excluding new consolidations and currency effects, to 694 million euros ($999 million), below the average forecast in a Reuters poll of 746 million euros.
The company reported first half operating profit of 1.26 billion euros, up 3.9 percent, compared with analysts' consensus forecast of 1.32 billion euros.
Heineken had said in April it expected higher planned marketing spending to hit profit after the first quarter, particularly across Europe. Analysts said it was unlikely to have yielded the desired benefits given unseasonably damp and cold weather in northern Europe in July and August.
"Developing and building brands are long-haul efforts. It's not because we witness an exceptionally bad summer -- you just look out of the window -- that we should take ourselves away from the efforts we are currently doing," Van Boxmeer said.
Heineken said it expected a single-digit percentage increase in cost of inputs such as barley, much of which are bought a year in advance. Sharply higher prices for raw materials will have a larger impact on brewing costs next year.
Malt barley future prices are 20 percent higher than a year ago.
24 Авг. 2011