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. ...
EABL takes on SABMiller with a Sh3.9bn war chest
The brewer will build a canning plant in Kenya to help boost the uptake of its products outside the traditional bars and restaurants as regulations restrict beer consumption.
It will also build a bottling plant in Uganda to capture a larger share of growing market that has caught the eye of SAB Miller that is building a second plant in the country—underlining the growing beer wars.
“We are going to make investments of between ?25 million and ?30 million to grow our capacity and enhance our distribution channels in the region,” said Seni Adetu, the chief executive of EABL.
EABL is betting on the investments to support growth that saw it announce a 17.3 per cent rise in net profit for the six months to December to Sh4.8 billion on revenues of Sh27.7 billion, reflecting a 36 per cent growth.
The profit growth was cut by increased investments in plants, higher financing costs and a depreciation of the Kenya shilling in the period under review.
Analysts at Standard Investment Bank (SIB) say the new investments could reduce EABL’s dividend payout for the full year despite the company expecting Sh6.3 billion from the sale of a 20 per cent stake Tanzania Breweries Limited.
“Despite healthy cash flows, we see the additional investments leading to a lower payout, despite the expected full year earnings per share,” SIB said in a statement to investors.
EABL maintained its interim dividend payout at the same level as last year’s Sh2.50 per share and new investments including the purchase of a 20 per cent stake in SAB Miller is expected to pile pressure on its cash.
It borrowed Sh20.7 billion from its parent company Diageo to buy the stake. Its cash pile has reduced from Sh8 billion in July 2010 to Sh2.6 billion in December 2010 and Sh1.52 billion in December.High taxation and increased costs--especially those brought by volatility in the currency market and commodity booms--include the major challenges that EABL will have to navigate in coming months.
Its share price rose to Sh179 at the close of trading on Friday from Sh176 on Thursday and has shed 5.2 per cent in the past year—making it one of the most resilient counters at the Nairobi Securities Exchange where firms have shed upto 35 per cent over the period.
It needs to defend and grow its share of the regional market—which is increasingly becoming a battlezone among multinationals SABMiller, Heineken and Diageo led EABL that has plants in Kenya, Uganda and Tanzania with distribution networks in Rwanda and South Sudan.
Already, a vicious battle for dominance is underway in Uganda between Uganda Breweries, owned 98.2 per cent by EABL, and Nile Breweries, which is 60 per cent owned by SABMiller--which is opening a second brewing plant in Uganda at a cost of $80 million (Sh6.6 billion).
SAB Miller has also re-entered the Kenyan market with a focus on the premium market with brands like Miller Genuine Draft, Redds and Castle Lager – a segment that has also caught the eye of Heineken, which recently opened a regional office in Nairobi.
In Tanzania, Diageo through EABL ended a partnership with SABMiller over the running of Tanzania Breweries Limited and bought a majority stake in rival Serengeti Breweries where it has increased investments.
20 Фев. 2012