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. ...
Molson Coors: Anyone But Income Seekers Should Avoid
An article on a beer stock is not interesting without some history, and this company has a lot of history. John Molson started his brewery in Montreal in 1786 and Adolph Coors built his Golden, Colorado, brewery in 1873. Molson offered shares to the public in 1945 and Coors started to trade publicly in 1975. In 2002, Coors acquired Bass Brewers of the U.K. to become the largest brewer in that country. Molson and Coors merged as a partnership of equals in 2005 to become the fifth largest beer company in the world. In 2008, Coors and SABMiller (SBMRY) formed a joint venture to produce and market the two companies' brands in the U.S. The main markets for Molson Coors are the U.S., Canada, and the U.K., and the company opened a brewery in China in 2010 as part of a plan of international expansion.
With a market cap of $8 billion, Molson Coors competes with large cap companies like Anheuser-Busch InBev (BUD), with a market cap of $100 billion, down to craft brewers like The Boston Beer Company (SAM), at $1.3 billion, and Craft Brew Alliance (HOOK), worth $120 million. Competing in the crowded beer market requires a large amount of advertising spending to build brand recognition and the beer version of sex appeal. To cap off the competitive difficulties, Anheuser-Busch controls more than 50 percent of the U.S. beer market, leaving less than half for the rest of the brewers to fight over. The Molson Coors alliance has benefited the company and Canadian beer sales generate over half of the company's underlying pre-tax income.
For the third quarter of 2011, Molson Coors reported an 11 percent decline in underlying to $1.14 per share on a 9 percent increase in sales compared to the 2010 third quarter. Corporate management attributed the profit decline to less beer being purchased by the company's core customer base due to high unemployment and higher costs of raw materials and higher general expenses. Lower U.K. sales volumes were a surprise to company management in the quarter. For the full year 2011, Molson Coors is forecast to earn $3.50 per share, down slightly from $3.56 earned in 2010.
Another point of worry for investors is the company's string of quarterly earnings misses. Molson Coors has come up short of the Wall Street consensus for the last four consecutive quarter. The result is actual earnings of $3.46 for the four quarters compared to a total of $3.69 when the individual consensus estimates are totaled together. The fourth quarter and year-end financial results will be released on Feb. 16. The consensus earnings estimate for the quarter is 70 cents per share, compared to earnings of 66 cents in 2010's Q4. It will be interesting to see if Molson Coors can make the expected number or post another miss.
At this point, Molson Coors is not a compelling buy as an investment. The company generates nice profits in Canada, but that is a smaller market than the U.S. In the U.S. the high level of competition plus slow economic growth makes meaningful growth problematic. The company's international ventures ??? not including the U.K. ??? results are still posting losses. The biggest change the company could make to return to growth would be a rapid rise in profitability of the international operations.
Molson Coors does pay an attractive dividend with a current yield of just under 3 percent. The quarterly rate has been doubled since the first quarter of 2008, so investors could be primarily interested in a growing dividend stream if they choose to buy shares of TAP rather than the product from a beer tap.
23 Янв. 2012