Beer market of Russia 2018
- General market picture
- Foreign trade setting records
- Demography as challenge to branding
- Aged consumer
- Declining of youth brands
- Nostalgia on trend
- DIOT feels at home
- 5.0 Original is the new face of import
- Positions of Market Leaders
- Carlsberg Group
- AB InBev Efes
- AB InBev
Ukrainian beer market 2018
- Better than yesterday
- Performance by value
- Positions of Ukrainian brewers
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. ...
Russia. Baltika lost market share
The ongoing aggravation of the general macroeconomy, the Russian ruble devaluation, and high consumer price inflation were the key drivers for the market decline. Moreover, growing legislative pressure including additional regional restrictions and high rate of excise duty for several years have been exerting significant impact on the beer market. Tax payments of Baltika, including excise payment, to the Russian budget made up 60 billion rubles in 2015.
Overall negative economic situation and high inflation of consumer prices promote further decline in the consumer purchasing power along with the consumer demand for beer. Consumers strive to economize on non-essential goods opting for cheaper goods, cutting the rate of purchase or refraining from it. Meanwhile, the state authorities proceed to discuss the initiatives that might have further negative impact on the results of the brewing industry, for instance, a ban on PET packaging for beer or its radical restriction.
As a consequence of all the above mentioned causes, Baltika has made structural changes in the warehousing and logistics operations along with restructuring its production capacities – earlier this year, two breweries in Chelyabinsk and Krasnoyarsk were shut down, 560 employees got laid off. The total production capacity of all 8 Baltika breweries now makes up 40 mln hl per year.
Company’s shipments declined by 17% as compared to last year on account of continued inventory reduction by distributors, rapid shift from traditional to modern trade sales channels, as well as the price leadership of the company and growth of lower-priced local brands.
The volume market share of Baltika Breweries amounted to 34.7% in 2015, which is by 2.1% lower compared to 2014. The loss of the market share was primarily caused by company’s price leadership in summer 2015. The value market share of the company made up 35.6%* in 2015.
Despite all the profound challenges the brewing industry in Russia faces, Baltika Breweries continues to capture a significant part of Russian profit pool owing to the efficiency of company’s internal processes and a well-balanced production and logistics infrastructure. At the same time, Russia’s share in the Carlsberg Group’s operational profit continues to decrease due to the ruble devaluation and was 16% in 2015.
Against the backdrop of a challenging macroeconomic situation in 2015, the profitability of Baltika export sales increased by almost half compared to the 2014 year, with 20% of this growth provided not currency factors - improved product and price mix, as well as the beginning of sales in new countries: Romania, India, New Zealand. The remarkable growth showed such brands as Zatecky Gus and Flash Up.
In 2015, Baltika continued to focus on internal efficiency improvement and invest into brands development.
The company launched a series of new products including such brands as Neon Beer and Boilermaker by Tuborg — a new brand of Tuborg beer with the addition of special malt “whiskey – bourbon”; regional brands, for instance, Don produced with the local malting barley grown in the Southern region, as well as Sverdlovskoe, Zapovednoe, and Samara Czech hop.
Moreover, the company hosted such music festivals as Greenfest, DVigay na Prostor, and such summer festivals as DAS FEST, and DON-fest. Baltika continued to invest considerable funds into sport, including the Continental Hockey League (CHL) and the Russian Football Union and it supported the XXXV Bandy World Championship held in Khabarovsk, which brought victory to Russia, organized a tour of the main trophy of the CHL to Russian cities with a route of 9,000 km, continued cooperation with the Russian Olympic Committee. The company also supported the regional clubs, namely SKA Ice Hockey Club (Nevskoe brand), Arsenal Football Club (Arsenalnoe brand), Krylia Sovetov FC (Samara brand), and many others.
In 2015, the brands of Baltika were honored with prestigious awards – Baltika 3 became the gold medalist at the XII International Vocational Competition “European Beer Star 2015”. All in all, eight beer brands of Baltika were honored with various awards during the prestigious competition “International Beer Challenge 2015”. Gold was won by three brands: Baltika 4 Original, Baltika 8 wheat beer, and Baltika Munchen.
The segment of energy drinks compared with other segments has grown in 2015, Flash up brand showed sales growth of 5%.
Baltika continued to promote beer consumption culture and social responsibility, which is one of the key company’s priorities in sustainability area. More than 100 lectures of the educational projects “Beer Sommelier” and “Beer Gourmet” were delivered in 2015 in large Russian cities. On September 18th the company joined the global initiative “Global Beer Responsibility Day” that united 62 countries, 120 Russian cities, and more than 60 million people. It has accomplished 19 «Beer patrols» around Russia to prevent sales of alcohol to minors and engaged almost 7000 people. Also the company initiated 8 «Be sober behind the wheel» campaigns to remind people to never drive a car after drinking alcohol.
The challenging macroeconomy, high consumer price inflation inflation, as well as reduced consumer purchasing power and declining consumer sentiment continued to put pressure on the results of the Carlsberg Group in the Eastern Europe region.
Organic net revenue in the Eastern Europe region increased by 2% as the strong 16% price/mix offset the volume decline. While gross profit per hl increased organically by approximately 10% due to the favourable price/mix, the lower volumes and increased sales and marketing investments impacted operational profit negatively, and organic profit declined organically by 19%.
Jacek Pastuszka, president of Baltika Breweries LLC, Senior Vice President Eastern Europe of the Carlsberg Group: “Last year was a tough one for the brewing industry: negative trends intensified, while the market continued to decline, and the rate of decline continues to accrue. Beer consumption per capita in Russia hit its 12-year low. A combination of serious external and internal factors had a negative impact on Baltika’s results. At the same time, in 2015 we managed to bring the company business in compliance with today’s market realties and to increase efficiency of many business processes. Another uneasy year is ahead of us. According to our estimates, the beer market will remain under pressure and continue declining. Under such conditions we will focus on stopping decline of our volumes and profit and strengthen our leading market position with a well-balanced portfolio of strong international and local brands and efficient operations.”
Baltika Breweries LLC, part of the Carlsberg Group, is one of Russia’s largest FMCG companies, and it has been No. 1 in the Russian beer market since 1996. Baltika owns eight breweries in Russia and has a broad portfolio of brands. The company is a significant part of Carlsberg Group and its Eastern Europe region, which also includes Azerbaijan, Belarus, Kazakhstan, Ukraine and Uzbekistan. Baltika Breweries LLC is the leading exporter of Russian beer: Baltika products are present in more than 75 countries, accounting for 48% of all Russian beer export. In 2015, the products were also launched in the markets of Romania, India, and New Zealand. Beer brands of Baltika Breweries were honored with more than 670 awards at the international and Russian vocational and consumer contests.
10 Фев. 2016