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. ...
Big beer merger excites investors, not analysts
As some of the season's last baseball games play out in stadiums named Busch and Miller, Wall Street is buzzing about a different kind of match between the two beer brands.
For the past couple of weeks, rumors have been swirling about a possible combination of the world's No. 1 and No. 2 brewers, Anheuser-Busch InBev and SABMiller. The merger speculation has popped up before, and the latest gossip doesn't add anything new except a potential price tag: $80 billion.
Still, investors seem to want the rumors to be true. SABMiller shares jumped 7 percent in London trading on Oct. 6, the day a Brazilian website published a report about the potential deal.
The rumors seem plausible for several reasons. Anheuser-Busch InBev's biggest shareholders came from the investment banking business, and they have built the world's largest brewer through a series of opportunistic mergers. It has been three years since they bought St. Louis-based Anheuser-Busch, so perhaps they're hungry for another deal.
Then there are the savings to be had. Mike Gibbs, an analyst at JPMorgan, estimates that the sharp-penciled folks at A-B InBev could squeeze $1.3 billion out of the combined companies' cost structure.
Plus, beer sales have been stagnant in the U.S. and Europe, where A-B InBev does the bulk of its business. Why not buy some growth, along with exposure to Africa, where SABMiller has a leading position?
A deal would face significant hurdles, starting with the U.S. Justice Department. A-B InBev and MillerCoors (a joint venture that is majority-owned by SABMiller) sell more than three-quarters of all beer consumed in this country.
Analysts presume that MolsonCoors, the other joint venture partner, could buy all of MillerCoors. But agreeing on a price might be difficult, and Gibbs says MolsonCoors might have difficulty financing its part of the deal. The joint venture agreement bars either party from selling before December 2012.
China also would probably raise antitrust concerns, analysts say.
For A-B InBev, a mega-acquisition would represent a sudden about-face in strategy. It has paid down nearly half of its debt load from the Anheuser-Busch acquisition, and management has been "vocal about focusing on organic growth," says Gimme Credit analyst Dave Novosel.
"It's highly unlikely, in my opinion, that this deal goes through," Novosel said.
Tom Pirko, managing director of consulting firm Bevmark, is also skeptical about the deal rumors.
The companies' cultures are very different, and Pirko says he thinks A-B InBev would have difficulty imposing its tough-on-costs culture on SABMiller. "It's a Latin American mentality versus a South African mentality, and those two wouldn't mix very well," he says.
Pirko thinks Wall Street may be a little too eager to see a big merger and the big fees that go with it. He doesn't deny, though, that the beer industry is in a consolidation phase. "One thing the analysts have right is there's a tremendous drive right now, like a sex drive, for consolidation and mergers," Pirko said.
Combining the two industry giants, though, might be a merger too far. "I can pencil this out and come up with the same valuation numbers," Pirko said, "but it's a deal I would have great trepidation about. I'm not sure the synergies are as easily available as some people think.
"Coke and Pepsi shouldn't merge, and these companies should think of themselves as the Coke and Pepsi of the beer business," Pirko adds. "It's about beating your competition, but also about being sharpened by them. The more you compete against each other, the stronger you both become."
17 Окт. 2011