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. ...
AB InBev goes it alone in shrinking Chinese beer market
China Resources Beer will buy SABMiller's stake in the Beijing-based CR Snow brewing company for $1.6 billion. The sale clears the way for the completion of AB InBev's takeover of London-based SABMiller.
The deal, which removes a major regulatory obstacle to the takeover, will allow AB InBev to focus its operations in China on its own brands like Budweiser.
The move also sets the stage for a fierce battle between AB InBev, the world's largest beer company, and China Resources Beer, China's leading state-owned brewer, in the vast Chinese beer market.
The announcement of SABMiller's sale of its 49% stake in CR Snow, a joint venture run with China Resources Beer since 1994, was welcomed emphatically by investors. China Resources Beer's stock rose as much as 35% in Hong Kong on Wednesday.
Jeremy Yeo, an analyst at Mizuho Securities Asia, said investors reacted to the lower-than-expected price of the buy-out, which raised expectations that the Chinese company won't have to borrow much to finance the deal. Analysts had expected a price tag of as much as $3.6 billion.
The main reason behind AB InBev's decision to end the partnership was unquestionably its desire to obtain Chinese regulatory approval for its acquisition of SABMiller.
China Resources Beer, the nation's largest brewer, and AB InBev have a combined share of nearly 40% of the Chinese market -- the world's largest.
Since it made a formal offer to buy SABMiller in November last year, the Belgian brewer has shed several big brands to secure regulatory approval for the takeover, selling MillerCoors to Molson Coors and Peroni and Grolsch to Japan's Asahi Group Holdings.
Some industry observers have speculated that InBev has also been motivated by how it sees the Chinese market evolving, with one commenting that there are plenty of sound economic reasons for the Belgian multi-national to divest the venture, aside from the regulatory factor.
China's beer market has started shrinking after peaking in 2013, due partly to President Xi Jinping's anti-corruption campaign, which has cracked down on graft and profligate spending by officials.
CR Snow saw its net profit for December 2014 drop by about 20% from the previous year and is believed to have continued struggling to lift its bottom line in 2015.
The brewery does not sell any SABMiller brand beer, and the London-based company's stake in the joint venture is an almost purely financial investment for dividends, one industry executive pointed out.
As CR Snow's growth has started faltering, the investment has become less profitable.
Lifestyle changes among Chinese consumers, in particular the dwindling popularity of beer among young Chinese, mean the industry sees little chance of a significant upturn in demand, and slicing into a rival's share is one of the few ways a brewer can force growth in the market.
Despite tougher business conditions, InBev's own beer brands are fairing reasonably well in China, eking out an increase in sales in 2015 to 7.45 million kiloliters. Sales of its two mainstay brands in the country, the high-end Budweiser and the low-end Harbin Beer, remain strong.
China Resources Beer, in contrast, has been going through something of a rough patch. Sales of its staple product Snow beer, a 500ml bottle priced at around 2 yuan ($0.31), have been sluggish and the overall outlook is bleak.
The Chinese market has seen a growing shift in recent years, especially among young consumers, toward higher-priced brews, such as foreign brands and white beers.
With InBev freed from the burden of supporting the struggling joint venture, it finds itself in a strong position to capitalize on the trend. CR Snow's plight, on the other hand, is likely to continue for the time being.
China Resources Beer operates about 90 breweries around China, a legacy of its aggressive, acquisition-focused expansion in the past decade.
But these breweries, mostly aging facilities, are running at only around 50% of their capacity amid weak demand and major restructuring of its operations is required for the company to stay afloat.
In order to regain its edge, "China Resources Beer needs to streamline their production and distribution operations and develop premium products," said Yeo of Mizuho Securities Asia.
SABMiller's sale of its stake in the Chinese joint venture could also catalyze a fresh wave of cross-border consolidation as China Resources Beer may start looking for a new foreign partner.
Despite slowing growth, China's beer market remains twice as large as the U.S., the second largest in the world, and the company could look like an attractive partner for an overseas brewer.
China Resources Beer may also go on a shopping spree overseas to enhance its presence in emerging markets in Southeast Asia and Africa that could have an even bigger effect on the global beer industry landscape.
4 Мар. 2016