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. ...
China’s taste for craft offers fizz for global brewers
China is key for the biggest international beer brands as growth elsewhere stalls, accounting for half of the industry's global volume increase last year.
But while China drinks a quarter of the world's beer, it accounts for only 3 percent of brewers' profits, Deutsche Bank analysts estimate.
"The premium segment will be an important battle ground for brewers going forward because it will be the main growth driver," said Shanghai-based Rabobank analyst Katharine Song.
"Brewers are adjusting their strategy to focus more on high-end products."
Until recently, volume and distribution networks have been the name of the game, driving global industry consolidation through ever larger deals and crushing margins.
In 2004, about half the world market by volume was controlled by the biggest 10 brewers, according to industry data. By 2014, 47 percent of volumes and three-quarters of profits were controlled by just four brewers - AB InBev (ABI.BR), SABMiller (SAB.L), Heineken NV (HEIN.AS) and Carlsberg (CARLb.CO).
That number is soon to drop to three, with the planned $100 billion-plus (71 billion pound) takeover of SAB Miller by AB Inbev.
FOLLOW THE MONEY
Last week's sale by AB InBev of SAB Miller's 49 percent stake in China's top selling brand Snow to China Resources Beer for an unexpectedly low $1.6 billion was primarily aimed at satisfying regulators and wrapping up the merger.
Critically, it also freed up SAB Miller to focus on more lucrative bets in the Chinese market than a beer which sells at 50 U.S. cents a bottle, or less.
The focus on premium products reflects a shift in China's 1.4 billion consumers, who now want more tailored and individual products from fast-food to travel - a headache for firms from KFC-owner Yum Brands Inc (YUM.N) to luxury goods maker Prada SpA (1913.HK).
Premium beers are expected to make up over a third of the $80 billion Chinese market by the end of the decade - compared to less than 10 percent in 2010.
Imported high-end beers saw a 60 percent jump last year as consumers splashed out on brews such as "Hop Zombie" and "Armageddon IPA".
For drinkers like bar owner Chen Jiaqi, who flew over 400 miles (640 km) to Shanghai from the central Chinese city of Wuhan to sample a New Zealand craft ale, it is about individuality.
"I think more and more Chinese customers are about the flavour of the beer itself, and if the beer is unique and rare then they will choose it," said Chen.
That comes at a cost.
A bottle of craft ale costs around 30 yuan ($4.6) in Shanghai, around ten times more than the cheapest mass-market beers from Tsingtao Brewery Co Ltd or CR Beer.
"It is rare and unique and the flavours are better," said Hao Xiaowei, a 33-year-old nurse, while she drank a Bavarian wheat beer at a craft bar in downtown Shanghai.
"It's worth spending the extra money."
That willingness to splash out has attracted a host of small craft brewers such as Scotland BrewDog and New York's Brooklyn Brewery, who have started actively targeting China.
"China's on the hit list to tackle in the near future," said Luke Raven, director at Ilkley Brewery in northern England which has craft beers with names like "Hanging Stone" and "Holy Cow".
Craft beers won't appeal to all, but a willingness to spend more to stand out from the crowd will also support mainstream imported brands like Budweiser, Heineken or Japan's Asahi.
Premium beer sales grew just under 25 percent last year versus 7.5 percent growth in the overall market, Euromonitor data shows.
"Sometimes people choose premium beers – Heineken or Carlsberg for example - because it has a marketing angle or image, a certain attraction like going for a coffee to Starbucks," said Michael Jordan, brewmaster for Boxing Cat Brewery in Shanghai, which makes craft beers using local ingredients such as Sichuan peppercorns and goji berries.
"It's a kind of status symbol."
9 Мар. 2016