The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
Fresh beer wars as brewers expand
Giant brewers Diageo and SAB Miller have over the past few months closed several deals in the East African market, setting the stage for fresh beer wars to be fought mainly in Kenya, Uganda and Tanzanian markets.
SABMiller-owned Nile Breweries Ltd has injected Ush190 billion ($80 million) in the construction of a new beer and mineral water plant, doubling the capacity of the subsidiary as it seeks shorter distribution times in the lucrative western Uganda region.
This brings the brewer’s investment in Africa up to $1.75 billion over the past four years. Diageo has also invested more than $1 billion during the period and it is planning to go big in the wider East African market with the privatisation of Ethiopian breweries.
In Uganda, previous expansion at Nile Breweries Jinja plant helped raise the brewer’s output, but fierce competition in the market dictated by quick distribution cycles has sent NBL looking for fresh strategies to reach consumers faster.
“After completion of the new plant, we expect to save roughly six hours per delivery trip and this will greatly improve efficiency in distribution activities,” NBL managing director Nick Jenkinson said, adding that the company will save between $4 million and $5 million per year on distribution costs.
Uganda Breweries Limited (UBL), the local subsidiary of East African Breweries Ltd is NBL’s main competitor but appears unruffled by the latter’s ambitious expansion.
“We are still expanding production capacity at our Kampala plant. Though western Uganda boasts a fast growing beer market, we believe quicker distribution times and higher working capital among agents will help us deepen penetration in that market,” said a senior executive at UBL, who requested anonymity.
UBL has managed to maintain an average of 5-10 days of beer stocks among agents and this has boosted brand popularity for its flagship products like Senator and Bell.
Annual growth in western Uganda’s beer market is projected at 20 per cent per year, coupled with a consumer base that contributes 40 per cent of Nile Breweries’ total sales estimated at 12 million crates of beer per annum.
Kenyan-based East Africa Breweries Ltd (EABL) has recently invested millions of dollars to boost capacity of its subsidiaries in Tanzania and Uganda. EABL has also doubled capacity of its Ugandan subsidiary at a cost of $19 million at its Port Bell plant and at its Moshi-based plant owned by its unit Serengeti Breweries Ltd at a cost of US$ 40 million. EABL is owned by 50.03 percent by Diageo.
“The boosting of production capacity by EABL and SABMiller is set to intensify ongoing battles for control of the regional beer market,” said Tanzania Securities Ltd chief executive Moremi Marwa.
The moderate growth in per capita GDP is driving the growth potential of the local alcohol beverage industry in Tanzania and region. SABMiller has opened a new plant in South Sudan, made a re-entry into the Kenyan market through its local subsidiary Crown Beverages.
“The East African market still has opportunities for the beer market to grow, even consumption of beer and spirits is still low in the region; that means there is a gap which needs to be filled,” said Joel Nkya, an analyst with Tanzania Securities Ltd.
By Paul Redfern, Bernard Busuulwa and Leonard Magomba.
20 Фев. 2012