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. Anheuser-Busch InBev Divesting Its Stake in World’s Largest Beer Brewer
Anheuser-Busch InBev recenty announced the $1.6 billion sale of SABMiller's stake in Chinese brewery CR Snow. The deal is part of AB InBev's ongoing efforts to "proactively address regulatory considerations" in its bid to secure approval for its mega-merger. However, there was likely a deep sense of disappointment that the company couldn't keep its ties to the Chinese brand.
China is the biggest beer market in the world, accounting for a fifth of the world's total volume and having surpassed the U.S. for that title way back in 2002. And CR Snow itself has grown to be the biggest brewer in the world by volume, controlling 5% of the global beer market, more than Bud Light and Budweiser combined.
While Anheuser-Busch and Miller dominate more than 70% of the U.S. beer market, CR Snow controls about 70% of the Chinese market. Anheuser-Busch surely wanted to hold onto such a sizable partnership, but the antitrust hurdle was likely just too high. The company was resigned to selling its stake in CR Snow to Miller's joint venture partner China Resources Breweries.
When InBev bought Anheuser-Busch in 2008, it agreed to a few stipulations in China to get around antitrust concerns, including:
Anheuser-Busch could not increase its stake in Tsingtao Brewery.
InBev could not increase its 28.5% position in Zhujiang Brewery.
AB InBev could not own any part of Beijing Yanjing Brewery.
And most importantly, it also could not own any part of CR Snow.
If it wanted to get over that last hurdle, Anheuser-Busch would have to get the approval of the Chinese Ministry of Commerce (MOFCOM), which has proven to be leery of allowing outside investors to hold majority positions in Chinese companies. That was hinted at in its demands that Anheuser-Busch be prohibited from increasing its stake in any domestic brewer and suggested that any sort of relationship with the brewer was going to be difficult under China's anti-monopoly law.
Yet the sale price for Miller's 49% position in CR Snow was something of a surprise, as some analysts had been valuing the Chinese brewer at as much as $3.5 billion, or double what the company received. Other analysts speculated that regulators may have influenced the deal -- with China Resources having the right of first refusal, it was able to acquire the remaining stake at a bargain price.
The sale, however, adds to a string of assets Anheuser-Busch has agreed to divest to win regulatory approval around the world.
In the U.S., Miller's joint venture with Molson Coors, MillerCoors, is being sold for about $12 billion, giving up some of the better performing domestic brands, such as Coors Light and Miller Light. Both of those beers have gained market share in recent periods, even though overall volumes are down as a result of the sustained popularity of craft beer, which now accounts for 11% of all beer volume in the U.S. and almost 20% of dollar sales.
In Europe, AB InBev is also shedding two popular brands, Italy's Peroni and Grolsch from The Netherlands, which it is selling to Japan's Asahi Group Holdings for $2.8 billion.
The size of the new Anheuser-Busch-Miller brewery, should it win regulatory approval, will still be massive. The company will have annual revenue of about $64 billion, representing about 30% of global beer sales, putting the Anheuser-Busch back on top worldwide.
It was a deal that most had expected, and though the price is less than what many predicted, Anheuser-Busch InBev will still be a major force in the industry going forward.
14 Мар. 2016