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. ...
SABMiller plc Trading Update
Lager volumes for the first six months were 3% ahead of the prior year. Beer consumption continued to vary across markets with further healthy growth in Latin America and Africa and underlying weakness persisting in North America and Europe. Growth slowed in the second quarter, in part reflecting stronger prior year comparatives, and some particularly poor weather in Europe and China in the current period. Soft drinks volumes grew by 6% for the half year. Volume growth combined with selective price increases and mix benefits increased group revenue by 6% and group revenue per hectolitre by 3% in constant currency. Raw material costs rose moderately and investment in the group's brands and market facing capabilities was increased, which together with higher central costs constrained margins. Overall, financial performance for the half year was in line with our expectations.
In Latin America, lager volumes grew 8%. Colombia's lager volumes increased by 7% benefiting from improved trade execution and our strategy of price restraint, the cycling of the February 2010 VAT increase and the impact of extreme weather conditions in the prior period. In Peru lager volumes grew by 11%, underpinned by gains in beer market share, in part reflecting the successful repositioning of Pilsen Callao in the upper mainstream segment, and assisted by a buoyant economy. Ecuador's lager volumes increased by 5%, with growth of 11% in the second quarter, following the roll-out of the direct service model into rural areas and the cycling of Sunday trade restrictions introduced in June 2010. Double digit lager volume growth was achieved in both Honduras and El Salvador as a result of national introductions of bulk packs. Soft drinks volumes in Latin America ended the first half 12% ahead of the prior year driven by stronger distribution of non-alcoholic malt drinks in Colombia and the recent launch of a non-alcoholic refreshing malt variant, Maltizz, and strong performance across our Central American markets.
Lager volumes in Europe were level with the prior year. Beer markets were affected by the continuing fragile economic environment which further reduced consumer confidence and expenditure during the period. Poland's volumes were down by 2%, impacted by weak consumer spending and continued significant competitor price reductions. Phasing within the half year was affected by a low base in the first quarter of the prior year and heavy rains in the second quarter of the current year. In the Czech Republic, domestic volumes declined by 1% in the half year, significantly impacted by heavy rain and cold weather in July tempered by continued good performance of brand and pack innovations in the convenience segment. Volumes were up by 3% in Russia with growth in the first quarter, compared with a weak comparative period, partly offset by a decline in the second quarter reflecting an exceptionally hot summer in the prior year. In Romania, a difficult economic environment and government austerity measures continued to impact consumer demand which, combined with intensified competition in pricing and marketing, drove volumes down by 8%. Volume performance for Europe as a whole benefited from significant growth in Ukraine as well as continued positive performance in the United Kingdom.
In the six months ended 30 September 2011, MillerCoors domestic sales to retailers (STRs) were down by 2.3% in a market which continued to be impacted by high unemployment and subdued consumer spending. In the second quarter, MillerCoors STRs were down 2.0% against the prior period. Premium light volumes were down by low single digits in the quarter, with a mid single digit decline for Miller Lite being partially offset by growth in Coors Light. The Tenth and Blake crafts and imports division drove double digit growth, led by the continuing strength of Blue Moon and Leinenkugel's. Below premium volumes were down mid single-digits. Domestic sales to wholesalers (STWs) for the second quarter were down by 4.7% against the comparative period and for the half year were down 3.9%. The STW decline in the first half was higher than the STR decline due to the timing of shipments in the prior year.
In Africa lager volumes for the six months grew by 15% with strong growth across the region. Robust lager volume growth of 20% was delivered in Tanzania aided by strong growth of the local brand portfolio. In Uganda, volumes grew by 23% driven by increased penetration in the west of the country and enhanced outlet branding and sales execution. Zambia volumes ended 22% ahead of the prior year assisted by favourable economic conditions and a strong performance by the Castle brands. Lager volumes in Mozambique grew by 11% driven by healthy growth of the mainstream portfolio. In Ghana, strong economic conditions and improved availability resulted in lager volume growth of 54%. Zimbabwe's lager volumes continued to benefit from capacity upgrades in the prior year and grew by 30%. Our associate Castel delivered 11% lager volume growth with good performance in the Democratic Republic of Congo and Cameroon. Soft drinks volumes grew by 10% with robust performances in Ghana and Zimbabwe.
Asia's lager volumes were up by 4% for the first half, but with the benefits of regional acquisitions in China were up by 9%, in absolute terms. In China, lager volumes grew 5%, with double digit first quarter growth followed by a slight decline in the second quarter as a result of prolonged heavy rains in the Central region which limited consumer demand. The second quarter cycled strong growth in the comparative quarter last year in which volumes grew by 16%. In India, volumes declined by 7% with robust growth in September, following the lifting of trading restrictions in Andhra Pradesh, partially offsetting the impact of excise increases implemented across a number of key states at the beginning of the half year.
In South Africa, lager volumes were level in the first half year compared with the prior period in a market that declined slightly. Although volumes benefited from an Easter peak in the first quarter, performance was impacted by weaker consumer demand and a higher base in the prior period reflecting the impact of the 2010 FIFA World Cup. The portfolio continued to benefit from targeted investments in its core power brands as well as continuing improvements in retail execution and customer service. Castle Lite remained the top performer, growing strongly, while Castle Lager also made good gains, and the successful repositioning of Castle Milk Stout translated into solid growth. Soft drinks volumes declined by 3% during the first half year, cycling strong growth in the second quarter of the prior year. Volumes in the period were adversely affected by colder and wetter weather and consequent subdued consumer demand.
20 Окт. 2011