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. ...
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. ...
Diageo feels the pain of China slowdown
Diageo’s slight rise in sales yesterday was just enough to appease investors who have become impatient after two years of lacklustre performance.
However, Questor is concerned about the impact from a collapse in the value of currencies in important growth markets such as Brazil, Mexico and across Asia.
Emerging market slowdown
Investors in the spirits group, which is best known for Johnnie Walker whisky and Smirnoff vodka, have enjoyed fantastic returns over the past two decades, with the share price more than doubling.
The FTSE 100 company benefited after emerging markets got rich on the Chinese-driven commodity boom. As disposable incomes grew, businessmen across Latin America and Asia reached for bottles of Johnnie Walker to toast their success.
Diageo is now suffering from a reversal of those good fortunes as the Chinese economic slowdown and strength of the US dollar cause a sharp devaluation of currencies across Latin America and Asia.
Venezuela is a small part of the Diageo business, but it offers an example of the issues facing the wider group.
The company sold 7pc more bottles of spirits over the past 12 months, while overall sales jumped 39pc as prices were increased. However, all this is largely academic when the Venezuelan currency has collapsed from 50 bolivars to the US dollar to 200 in the past year. The black market rate is closer to 900 bolivars to the US dollar.
Diageo’s sales in Venezuela for the six months to the end of December fell 94pc from the same period a year earlier.
The spirits and beer maker showed organic net sales growth – which excludes currency and acquisitions - of 1.8pc, and sold 1pc more bottles of alcohol in the first half of 2015.
However, this was all eaten up by falling currencies. The reported net sales declined by £294m to £5.6bn, while operating profit before exceptional items was down £122m to £1.7bn.
Kathryn Mikells, the new chief financial officer who replaced Deirdre Mahlan last year, said the problem of distributors in Latin America and Asia buying up stock ahead of currency falls has now largely cleared. The destocking was a painful process that led to a sharp slowdown in Diageo’s overseas trading last year.
Ms Mahlan is now in control of the North American market that remains Diageo’s largest, contributing a third of total sales. Strong whisky and bourbon revenues offset a 40pc slump in Ciroc-flavoured vodka.
Europe remains an incredibly tough market, with sales across the continent – and in nearly all key brands – declining in the first half.
The sale of the Red Stripe lager brand and US wine interests saw net debts fall to £9.2bn at the end of December, from £10.7bn a year earlier. That is against shareholder equity of £8.1bn.
Diageo’s shares have largely gone sideways for the past three years. The company is showing some signs of improvement, but not enough to warrant a rating of 21 times forecast earnings.
The shares are no better than a hold for the income.
29 Янв. 2016