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. ...
The global outlooks of the legal market of cannabis are excellent. It is possible to simultaneously imagine dry law repeal and craft brewing boom but not in one but in several consumer categories. For alcohol is contained in liquids and cannabis derivatives can be in three physical forms.The value of legal market of cannabis and its products can reach 10% of the world beer market in five years, and in 2030-2040 even reach the same scope provided the current rates of legalization and development of market infrastructure remain at the same level. Cannabinoids are actively integrating into the food industry from chewing gum to beverages deforming the pharmaceutical and alcohol markets, they influence the trends of healthy lifestyle and beauty. ...
Beer market of Kazakhstan acquired both traits of East European countries and South Eastern Asia taking a transitional position between them by many criteria and consumption style. Yet there is a positive trend in beer production which differs Kazakhstan from most of the neighboring countries. The market has remained consolidated in the hands of two international players because of its small size. However, it faces dynamic processes such as fast growth of draft beer sales, up and downs of regional companies and Carlsberg Group’s ultimate expansion. Excessive mainstream segment has declined over the recent years, yet, Zhigulevskoe and national brands with regional links have yielded their positions to a range of new products. In our review special attention was paid to regional analysis of the markets. In 14 regions of Kazakhstan we compared the companies’ positions, the market price segmentation and DIOT channel development. Besides we have compared the beer market of Kazakhstan to neighboring countries. ...
Euromonitor: Carlsberg Needs to Find Growth Opportunities if it is to Retain its Global Position
Geographical bias hindering performance
Carlsberg has been struggling with falling beer consumption in its main markets in Eastern and Western Europe as the financial crisis has hit both regions' economies. Its sales have been further hit by regulatory measures in its key Russian market (200% duty increase in 2010, new legislation to prohibit beer sales from kiosks from 2013 and a ban on stores selling alcohol between 23.00-08.00hrs). In the nine months to September 2011, the company reported 4% growth in its net revenue thanks to a positive price/mix, but its operating profit declined by 12% due to higher input costs and marketing spend as it had to increase investment to maintain sales, primarily in Eastern Europe.
Due to weak performances in mature beer markets in Europe and North America in recent years, major brewers have made strong efforts to create a more balanced geographical footprint so as to be able to take advantage of volume growth in fast-growing emerging markets and value growth in high-value mature markets. Global leader A-B InBev has been taking advantage of its dominant position in Brazil and its growing presence in China, and in 2011 generated nearly half of its total beer volumes in Latin America and Asia Pacific. The global beer industry's second-ranked SABMiller, the least exposed to mature beer markets among the major brewers, has been enjoying solid volume growth thanks to its leading position in the Middle East and Africa and its strong presence in Latin America, while Carlsberg's closest competitor, Heineken, has also been benefiting from its increased footprint in emerging markets, and by 2011 43% of its total beer volume sales derived from Latin America, the Middle East and Africa and Asia Pacific. Carlsberg has also started working on its expansion in developing markets, particularly in Asia Pacific. In 2011, it increased its equity stake in Chongqing Brewery in China to 30%, acquired the remaining 50% share in Hue Brewery in Vietnam and agreed to set up a joint venture with Chongqing Brewery, although its global presence still remained heavily biased towards Eastern and Western Europe. According to Euromonitor International, the two regions accounted for 84% of the company's global volumes in 2011.
Rise of Chinese brewers
While companies face economic uncertainty and restricted consumer spending in Europe and North America, Chinese brewers have continued to capitalise on the robust growth in their domestic market. In 2011, China Resources, the leading Chinese brewer, registered 11% beer volume growth, increasing its global share to 5.4%, while Tsingtao Brewery and Beijing Yanjing Brewery also posted dynamic growth and secured their places among the top 10 global beer companies.
Source: Euromonitor International
Note: SABMiller 2011 share includes Foster's Group
As China is forecast to continue to drive global beer volume growth with an additional 13.9 billion litres (5% CAGR) over 2011-2016, local players are expected to continue to post strong results, and if Carlsberg is not able to improve its performance, it may well lose its fourth position in the coming years.
Need for further expansion to enhance growth prospects
According to Euromonitor International, Carlsberg's core Eastern and Western European markets offer limited growth prospects over 2011-2016, with predicted volume CAGRs of +1% and -1%, respectively. Hence, the company should switch its focus from volume to value generation and should push its high-margin brands, accompanied by strict cost management to improve its margins.
In order to enhance its growth prospects, Carlsberg should seek to further expand its coverage in fast-growing emerging markets. The company has already been working on strengthening its position in Asia Pacific, particularly in China, which will continue to enjoy the strongest beer volume growth over the forecast period. The company can benefit from its share in Chongqing Brewery and their newly set up joint venture, but it should also continue its expansion in the country, particularly in North/Northeast and East China, which are expected to see the strongest growth (9.2 billion litres) over 2011-2016. Moreover, it could push its premium brands to take advantage of the premiumisation trend as premium lager is forecast to outperform the wider beer market with a 15% volume CAGR, albeit from a low base. Its other markets in Asia Pacific, such as India and Vietnam, also offer strong growth potential, so the company should continue to invest in broadening its distribution in the region.
Furthermore, it should also look for opportunities to establish a footprint in the Middle East and Africa and Latin America, which are forecast to register volume CAGRs of 5% and 4%, respectively, over 2011-2016. The quickest way to enter would be through acquisitions but as these regions are highly consolidated, with one or two brewers dominating each market, the company's potential for inorganic growth is fairly limited. Carlsberg's sales are likely to remain focused on the niche but growing imported lager category, and the company should try to create partnerships with local brewers to boost its brands' international presence.
Carlsberg's ambition is to become the fastest growing global beer company, measured in terms of average organic growth in net sales and operating profit over a three-year period. However, the company has a great deal of work to do if it is to meet this ambitious target.
9 Фев. 2012