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3-2019

Russia: Positions of Brewing Companies

The 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 brands

In 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 2019

During 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.

Budweiser Is Having a Ball in Russia

Budweiser is enjoying an unlikely source of growth in Russia’s declining beer market, even as the all-American brand continues to struggle at home.

In a country where brewing output has fallen more than 30 percent since 2008, the self-proclaimed King of Beers is growing sales at a double-digit pace, according to the head of owner Anheuser-Busch InBev NV’s Russian unit.

So what’s the deal? Unlike in the U.S. and western Europe, Budweiser is pitched as a premium brand, boosting its appeal to a younger, more discerning Russian drinker. Yet it isn’t as expensive as some imported equivalents. By producing locally, ABI has been able to avoid the impact of the ruble’s drop against the dollar on the price of imported beers. Bud became Russia’s third-largest premium beer brand by volume last year, according to Nielsen estimates, placing it ahead of Heineken.

“Bud is a truly premium brand in Russia in terms of both pricing and user perception,” ABI country head Dmitry Shpakov said in an interview in his Moscow office.

Increased Production

ABI’s fourth-quarter results showed how the growth of premium brands such as Bud are helping its performance in Russia. Its beer volumes there declined by mid-single-digits in 2015, but rose by mid-single-digits in the final three months. By contrast, Budweiser lost share in the U.S. amid the growing popularity of craft brews.

Since choosing Russia as Bud’s first market for international expansion in 2010, ABI has ramped up production at a factory near Moscow. That’s enabled it to avoid increasing prices by as much as imported brews. At 61 rubles ($0.87) a bottle, Bud is less than half the price of ABI’s imported Spaten brand, which costs 175 rubles. Yet Bud still retains its international prestige, being priced about 30 percent higher than ABI’s bestselling mass-market brand Klinskoe.

More Sponsorship

“Several years ago, production volumes of Klinskoe used to be several times higher than Bud in Russia,” Shpakov said. “Since then, Bud has caught up and now the difference is not that big.”
Key to Bud’s growth has been its increased sponsorship of sporting events after the country eased advertising limits for brewers last year. The brand is sponsoring the 2018 soccer World Cup and the preceding 2017 Confederation Cup. In addition, many Russians have a preference for a global brand as part of their lifestyle, Shpakov said.

Yet, Russia remains a tough place to do business, as AB InBev and Carlsberg A/S have shown by closing plants in response to falling consumption. The industry is calling for at least a partial reversal of the increased taxes that have hurt it over the last eight years.

“This would be mutually beneficial as breweries would be able to boost output, ultimately paying more in excises,” Shpakov said.

30 Мар. 2016

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