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3-2019

Russia: Positions of Brewing Companies

The 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 brands

In 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 2019

During 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.

Brazil’s AmBev Shaping Up As Potential Leader

The market's uptrend is still quite new, and leaders from a host of industry groups may yet emerge. But so far, beverage makers are taking the lead in Latin America.

This column on Wednesday mentioned some of the highest-rated stocks from Latin America. Two names appeared in that search.

From Mexico, Fomento Economico Mexicano (FMX), or Fomex, is Latin America's largest nonalcoholic beverage company.

View Enlarged Image
From Brazil, Companhia de Bebidas das Americas (ABV), or AmBev, is Latin America's biggest brewery. The company also distributes Gatorade in a country that goes wild over sports.

Leader In Latin America

AmBev dominates Brazil's beer market with a 68% share. It also delivers several beer brands to 12 other Latin American markets.

Global beverage giant Anheuser-Busch InBev (BUD) bought a majority stake in AmBev seven years ago. AmBev now distributes Budweiser and Stella Artois in Canada, where it holds a 42% market share. AmBev also is the regional PepsiCo distributor.

Scrutiny of AmBev's chart shows a good — but not perfect — base.

AmBev is now in the eighth week of a cup-shaped base with a potential buy point at 34.78.

So what's wrong with the base? The right side is a bit steep, especially compared with the more evenly shaped left-side decline.

Accumulation and distribution are about evenly matched within the base, which has seen a large amount of volume. The base is V-shaped, which is poor form. It does reflect the market's volatility to some extent, though.

So what's right with AmBev's chart? Its base is a second-stage structure. Third- and fourth-stage bases reflect an older uptrend and are more prone to failure than first- or second-stage bases.

Its price action has been less volatile than the corrections of many other leading stocks.

Strong Earnings

AmBev posted earnings gains in the past four quarters ranging from 32% to 55%.

Estimates for the current period predict a rise of just 17%. That would be the softest such gain in five quarters.

Sales rose just 18% in the second quarter, the most recent report. That's lower than you'd want to see in a market leader.

But AmBev has accelerated its sales growth for three straight quarters. Taken together, AmBev's sales picture may be seen as a positive.

Finally, AmBev boasts the highest annual pretax margin — 39.2% — in its industry group.

Its 32.8% return on equity is second only to China New Borun (BORN), a Chinese small cap with its own set of problems.

AmBev is in IBD's alcoholic beverages industry group. It ranked 62nd out of 197 groups in Thursday's IBD, but the group has been climbing. It was 94th three weeks ago and 132nd six weeks ago.

29 Авг. 2011

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