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 Loses to Kingfisher in Battle Over India’s Beer Market: Retail
The global brewers are forming partnerships, introducing new products and marketing milder, pricier brews to young Indians. They have yet to overcome a maze of regulations and United Breweries Ltd. (UBBL), owner of top local brand Kingfisher, in a market expected by Euromonitor International to almost double to $9 billion by 2016.
United Breweries so far has beaten back the challenges. It started selling Heineken in India over the past seven months to offer more options against foreign rivals. Changing state regulations have already eaten into London-based SABMiller’s market share and all of the brewers still face some Indian taboos on alcohol consumption.
“Everyone fantasizes: Imagine if you had a billion Indian people drinking 50 liters of beer per capita,” said Trevor Stirling, analyst at Sanford C. Bernstein Ltd. in London. “It’s going to be many decades, if ever, before Indian per capita consumption reaches 50 liters.”
Emerging markets such as India are important to global brewers as growth slows in the developed world and brands like Budweiser fight competition from craft beers in the U.S.
At the same time, the experiences of foreign brewers show how regulations or entrenched competitors are holding back many of the world’s largest companies in the second most populous nation. Retailers such as Wal-Mart Stores Inc. (WMT) faced a setback in December when the government reversed a decision to allow their entry into a market dominated by local mom-and-pop stores.
India also bans advertising of alcoholic drinks, which can make it harder for brewers to introduce consumers to new names.
Supplying British Troops
United Breweries traces its roots to British soldiers’ love for beer. In 1915, a Scotsman named Thomas Leishman bought five breweries in southern India to form United Breweries. The company transported its beer in barrels on bullock carts, serving British troops. Vittal Mallya, father of present chairman Vijay Mallya, bought United Breweries in 1947, and snapped up distillers and brewers on the cheap when the Indian government briefly threatened prohibition in the 1970s.
The sale and distribution of alcohol in India is controlled by state governments, which impose taxes on imports and exports, forcing companies to open distilleries and breweries in each state where they want to sell their products cost-effectively.
“The biggest challenge is, in India, every state has their own system in terms of taxation, labor requirement,” said Joergen Buhl Rasmussen, chief executive officer of Copenhagen- based Carlsberg, which entered the country in 2007. “That does make India not very efficient to operate.”
United Breweries benefits from 28 breweries spread across the country’s 28 states. That tops the 13 that SABMiller uses and Carlsberg’s five.
United Breweries, based in Bangalore, increased its beer market share to 57 percent in 2011 from 43 percent in 2006, according to London-based Euromonitor. In the same period, SABMiller’s share dropped to 24 percent from 37 percent.
The success of the brewing business contrasts with United Breweries parent UB Group’s money-losing Kingfisher Airlines Ltd. (KAIR) The airline, which has reported more than 10 straight quarterly losses, is seeking new funds after grounding planes and cutting flights because of a cash shortage.
Kingfisher has held its own in the beer market helped by the introduction of new products, including milder, higher- priced varieties like Kingfisher Ultra.
“When we were going to launch Kingfisher Ultra two years ago, we used to wonder who would buy a 100-rupee ($2) beer,” Samar Singh Sheikhawat, vice president of marketing at United Breweries, said in an interview in August when the company introduced Heineken in India. “But today, Kingfisher or the mainstream beers are close to 90 or 95 rupees. What was considered a barrier for beer doesn’t exist anymore.”
SABMiller also added brands, such as Miller High Life, to reach young, urban consumers. Its market share was still hurt by regulatory disputes in the states of Andhra Pradesh and Uttar Pradesh, and excise duty increases in other states, the company said in its 2010 annual report.
“The single greatest challenge that any brewer faces is regulation,” Derek Hugh Jones, marketing director of SABMiller India, said in an e-mail. “The movement of beer across state borders is inefficient, eliminating any scale efficiency.”
Still, consumers’ greater affluence and increasing social acceptance of beer will “ensure sustained growth” for the industry in India, he said.
Per capita consumption of beer in India at 1.6 liters is a fraction of 35.5 in China, 75.6 in the U.S. and 105.6 in Germany, based on Euromonitor estimates.
“You have a reasonably high proportion of a Muslim population who won’t drink alcohol,” said Stirling. “Also, if you’re a devout Hindu, you won’t drink alcohol.”
Social norms are changing and beer consumption picking up as India’s young adults have more money to spend and travel around the world. The economy has grown at an average annual pace of more than 8 percent for the last four years. Euromonitor estimates India’s beer market will grow to 447.9 billion rupees ($9 billion) from 257 billion rupees in 2011.
Carlsberg’s Rasmussen said the potential to raise per capita purchases makes the country “a very attractive market to be in over time.”
Carlsberg, which entered India in 2007, had a 4.4 percent share in 2011. Anheuser-Busch InBev, the Leuven, Belgium-based company that sells its Budweiser beer, held 1.1 percent.
One factor in the new brew battles: the strength of the beer. Indian drinkers are largely still partial to stronger beers like Kingfisher Strong, with an alcohol content that can go as high as 8 percent.
As much as 80 percent of the beer sold in India’s beer industry is “strong,” with alcohol content of six to eight percent, by Sheikhawat’s estimate.
United Breweries’ stable of brands includes Kingfisher Strong and Draught as well as milder variants such as Ultra. Carlsberg has introduced stronger brews, including Carlsberg Elephant and Tuborg Strong.
Microbreweries are springing up in India as well. The New Delhi suburb of Gurgaon has several. One of the largest, called Rockman’s Beer Island, has raised prices as many as four times since starting in 2009 and still has customers flying to its brewery, on the top floor of an upscale mall, from other cities.
7 Мар. 2012