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 luxury liquor makers on the rebound as demand returns despite corruption crackdown
Research by China International Capital Corporation (CICC) forecasts that luxury liquor – defined as being priced at over 200 yuan (HK$234) – will see 25 per cent growth in revenue this year. The luxury sector is seen as becoming more accessible to mass consumers over the next 10 years, providing room for “10 times growth in the coming decade”, CICC said, without providing specific sales forecast figures.
Medium-range liquor will see 10 per cent growth this year, but the low end – bottles priced below 80 yuan – will suffer declines in growth, CICC researchers said.
The beer industry, however, is experiencing weak volume growth, with several breweries posting slight declines in the first half of the year, a recent JP Morgan report said.
China Resources Beer, Tsingtao Brewery and Beijing Yanjing Brewery are feeling the pressure from higher expenses, lower sales and consolidation of the beer market. While some breweries may benefit from a more consolidated beer sector, analysts say the overall market has seen “a volume growth slowdown” and “intensifying competition”.
Separately, the scarcity and greater brand visibility of high-end alcohol has buoyed demand for expensive liquor, CICC researchers say. While China had 1,563 producers of luxury liquors in 2015, only around 10 high-end brands had over 500 million yuan in annual operating revenue. This concentration of profits on expensive liquor within a handful of brands has seen them promote products nationwide at lower costs, a trend accelerated by alcohol dealers that actively seek sales agency rights from a few well-known brands.
Luxury brands such as Moutai, distilled baijiu liquor favoured among the country’s elites, have been slowly recovering after Chinese President Xi Jinping’s anti-graft measures caused demand for luxury drinks to tank. Moutai, which was priced at almost 2,000 yuan a bottle four years ago, quickly fell to as low as several hundred yuan a bottle.
This followed several high-profile arrests of corrupt government bureaucrats that curtailed the practise of gifting Moutai among officials, and a 2012 ban on lavish banquets where free-flowing Moutai was often consumed.
Moutai remains China’s most expensive drink, with its wholesale price slowly climbing back, increasing from 820 yuan in March to between 900 and 930 yuan per bottle in late July. The price gains helped Moutai widen its lead over peers and pointed to “its irreplaceable value as a scarce brand,” according to the CICC report.
“The underlying driver is the upgrading in mass consumption,” the report said. “In an age of mass consumption, top brands tend to enjoy higher premiums. Moutai’s price is still reasonable given the strong demand.”
High demand mean that luxury liquors may be temporarily unable to keep up with supply, and analysts predict a production shortfall of 0.4 metric tonnes over the next five years.
Moutai, for example, plans to ship 8,000 tonnes of liquor in the second half of this year. In order to satisfy liquor demand for next year’s Spring Festival in late January, Moutai will likely end up with a total shipment volume of 12,000 tonnes for the latter part of 2016, ending the year with over 70 per cent more in sales volume than 2012, according to CICC.
While analysts remain wary that a macroeconomic slowdown in China’s economy could affect the consumption of high-end drinks, they are bullish on luxury liquors. “High-end liquor brands will likely maintain strong profitability,” CICC said.
4 Авг. 2016