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. ...
Carlsberg creates fizz
The distinctive green bottles bearing the Carlsberg and Tuborg labels are beginning to catch the attention of the Indian consumer. Danish beer major Carlsberg has silently emerged the number three player in India in just over four years.
Carlsberg today has an all-India market share of about six per cent (excluding Tamil Nadu, where it has no presence) in comparison to leader UB’s over 50 per cent and number two player SABMiller’s 23 per cent.
While it still has miles to go before it can take on the two big boys in beer — Carlsberg has been growing fast in the last few years. On an average, the firm has added some two per cent share per annum in the last three years, according to Carlsberg India’s Managing Director Soren Lauridson. “Our outlook for the long-term is good,” he says.
For a company that began operations in 2007 with the acquisition of a small brewery in Himachal Pradesh, Carlsberg’s India strategy has been predicated on green field projects. Its second, third, fourth and fifth breweries were set up in places including Alwar in Rajasthan, Aurangabad in Maharashtra, Kolkata in West Bengal and Hyderabad in Andhra Pradesh.
Lauridson declines to indicate the investment the Danish major has made so far in the country. But he does say the firm is here for the long haul. “Growth in Europe and the US is stagnating. The Asian beer market including India offers a platform for growth,” he says.
The Danish major began its run four years ago in the north grabbing share from local rivals such as Mount Shivalik, maker of Thunderbolt, and Diwan, which produces Godfather beer. Today these players rank behind Carlsberg at four per cent and three per cent shares respectively. Lauridson admits its strategy of coming in from the north then moving to the central, eastern and western parts of the country has helped it cover significant ground. “But the south will not be as easy,” he says. That is because key players UB and SAB are strongly entrenched there.
The Karnataka and Andhra markets are also large beer markets. Andhra especially contributes about 13-14 per cent to industry sales, while Karnataka contributes about 7-8 per cent and Tamil Nadu about 17-18 per cent. Kerala is relatively smaller contributing about four per cent to industry sales, say market experts.
With Carlsberg ruling out a presence in Tamil Nadu for now at least, the pressure then to find its feet in Karnataka and Andhra becomes important, say market experts. It entered Kerala last year, where it has a share of about eight per cent.
The firm is counting on its line-up of products to take it through in Andhra and Karnataka. The Danish major has three strong beers in its portfolio in a market that is ruled by the strong beer segment. Eighty per cent of the beer market in India comprises the strong segment, while 20 per cent is mild. Abroad it is the other way round, with the mild beer segment making up the bulk of the market there.
Unlike most other international majors, Carlsberg has been quick to realise this addressing the strong beer segment with its discount brand Palone 8 since 2007. It launched Tuborg Strong last year and has now come out with Carlsberg Elephant, each of them at a different price point. Palone 8 is priced between Rs 60-80 for a quart, while Tuborg Strong is priced between Rs 70-90 and Carlsberg Elephant between Rs 100-125 for a quart.
While the beer market in India from April 2011 to now has declined thanks to an unusually mild and wet summer as well as steep price hikes of about 20-22 per cent due to changes in excise and value-added tax (VAT) in different states, the case wasn’t so till last year. The beer market, which closed the 2010-11 financial year at 230 million cases, grew at a clip of about 15-20 per cent per annum in the last seven years.
Most beer majors expect a sales uptick in the third quarter this fiscal especially around the months of November and December going right up to the end of the fourth quarter.
For Carlsberg too, the period will be crucial as it looks to find a foothold in markets such as Karnataka and Andhra Pradesh, which it has stepped into this year.
20 Окт. 2011