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. ...
CR Snow Breweries Bids for Houli Beer; Eyes Guangdong Market
The bid for the Shaoguan-headquartered brand comes 6 months after CR Snow Breweries lost out on a 21.37% stake in another local brewer, Kingway Brewery Holdings Ltd., to Belgium’s Anheuser-Busch InBev NV.
“We lost the bid for Kingway, but that doesn’t mean the end of our acquisition drive, which is core to our strategy of gaining market share first, even if that means profitability has to come later,” Zhao Xifang, general manager of CR Snow Breweries’ Guangdong branch, told the Southern Metropolis Daily.
Huoli Beer has a production capacity of 150,000 tons per annum and distributes Huoli-branded beer products in Guangdong, as well as neighboring Jiangxi and Hunan provinces.
“After being incorporated into the CR Snow Breweries family, Huoli Beer is expected to face a better future in the Pearl River Delta market, and with its geographical advantage in Shaoguan, it would also help CR Snow Breweries to entrench its position in the Hunan and Jiangxi markets,” Zhou Maohui, secretary general of the Guangdong Provincial Alcohol Industry Association, told the Southern Metropolis Daily.
Huoli Beer has all but halted production and is going through the process of bankruptcy, after which its assets will be auctioned off, according to Zhao.
CR Snow Breweries hasn’t the disclosed financial details of the deal, but Zhao said money is of little concern for the brewer, which is a joint venture between London-based SABMiller Plc. and China Resources Enterprise Ltd. (2319.HK).
CR Snow Breweries is looking to boost its presence and production capabilities in Guangdong, where it has only 1 plant compared to the 3 run by its biggest domestic rival Tsingtao Brewery Co. Ltd. (600600.SH), which have a combined annual output of more than 1 million tons from Guangdong.
The current plant’s 400,000 ton annual production capacity is far from enough to ease the brewer’s production pressures, according to Zhao.
“Our parent China Resources Group signed an agreement with the Guangdong Provincial Government at the beginning of the year to invest RMB 10 million in the province, and investments in the beer sector are part of that [agreement],” Zhao said.
“Under that backdrop we are going to seize opportunities in the market; that could mean both mergers and acquisitions and the establishment of new production plants,” Zhao said.
Shenzhen-based CR Snow Breweries is slowly shifting its focus from more mature markets in East China to growth opportunities in south and southwestern China. Last month the company inked a deal to buy a 70% stake in Moutai Beer for RMB 270 million.
Moutai Beer is a brand under liquor producer Kweichow Moutai Co. Ltd. (600519.SH), located in southwestern China’s Guizhou province.
“Beijing, Shanghai, Guangzhou and Shenzhen are the 4 most important cities in China, and for us that means we must have a solid foothold there to match our position as the country’s largest beer producer,” Zhao said, hinting that Guangdong’s capital Guangzhou would be the brewer’s next target.
Local brand Pearl River Beer currently has a dominant 46% market share in Guangzhou, followed by Tsingtao Brewery with 15% and AB-InBev’s 10%, according to data provided by private information house Societ Insights & Decision.
6 Сен. 2011