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. ...
Why Hong Kong is saying ‘yes’ to craft beer
Craft beer is handcrafted and typically has smaller production runs than macro brewers, allowing for memorable beers with a distinctive palate. A local brewery might make just two million bottles a year. To put that into perspective, Carlsberg makes 35 billion bottles of beer a year.
“The market here is echoing what has happened in the States in the last 15 to 20 years,” says Joseph Gould, a founder of local craft offering Gweilo beer.
Gweilo is just one of many on the Hong Kong craft beer scene that includes Young Master, Moonzen, Black Kite Brewery, Kowloon Bay Brewery, Yardley Brothers and Hong Kong Beer Co.
“There are many exclusive contracts for bars out there with the big boys, so the barrier for entry for small producers is quite high as you cannot offer the same financial backing as the industrial brewers do,” says Moonzen co-founder Laszlo Raphael.
Running a beer company also has a range of costs associated with it.
“I think it’s quite difficult to get set up; a brewery is a huge investment. Typically the dynamics of the market, and the leases people can get on locations, is very tricky. It takes a lot of capital investment, and you don’t get paid straight away. I wouldn’t advise people to run into it without doing their research,” says Gould from Gweilo, which does not its own brewery, but produces at Hong Kong Beer Co’s facility in Chai Wan.
The costs of producing craft beer depends on where your system comes from (US systems are more expensive than Chinese equipment), the size of a brewery, and modifications needed to make to the building. While set-up costs vary, industry estimates place expenses at HK$8-10 million to get started, even more for the most sophisticated systems. The time from concept to bar is anywhere from six months to two years.
Former accountant Chris Wong is brewery manager in Hong Kong at Hitachino Nest Beer, the Japanese craft beer brand that recently opened in Fo Tan industrial area.
“A barrier is the suitability of the building: Does it have the right sized lift? How do you get the tanks upstairs, and how is water and gas supply? These are things that are challenges that people have to overcome when planning to open a decent sized brewery,” says Wong.
Having the space to brew is a large fixed cost, not to mention storage, refrigeration, bottling, distribution, and marketing. Another barrier is finding suitable master brewers – who are akin to executive chefs – and they usually come from the US, UK, or Germany.
So why are craft beer pubs popping up from Mong Kok to Wan Chai and beyond?
Liam Lee, blogger at Facebook page “Beer meh Beer”, believes the average beer consumer in Hong Kong is expanding his taste, and this is reflected in the retail landscape.
“Instead of getting boring, artificial and tasteless commercial beers, people can select craft beers with different styles and alcohol levels,” says Lee.
Hong Kong craft beer producers often use locally found ingredients. Moonzen’s offerings include a “Yama Sichuan Porter” that is flavored with spices used in the region’s cuisine, while Young Master, based in Ap Lei Chau, has included mandarin orange peel in their beers.
“There are different flavors and stories behind each beer – sour, sweet, hoppy, fruity, roasted, chocolate-flavored and nutty,” says James Ling, general manager at Tap: The Ale Project in Mong Kok, just one of around 20 bars focused on serving craft beer in the city.
“There are an estimated 500 to 1,000 kinds of craft beers available in Hong Kong. People who try them will soon know that beers can be as complex and sophisticated as wines or liquors,” says Lee of Beer meh Beer.
But is this scene just a bubble waiting to burst? Insiders don’t think so.
“With craft beer taking up such a small area in Hong Kong, there is so much room to grow. It’s just about finding the right beer that the local market will have at the right price,” says Rob Whitaker, operations manager at Hong Kong Beer Co, which is based in Chai Wan.
It can be hard to push craft beers into local bars and restaurants because they are more expensive than commercial beers, but many owners are starting to change their ways.
“If I was to sell craft beer to a restaurant, the initial cost to the establishment may be more than a commercial brand. However, as craft beer is a premium product they can sell it at a higher price, which allows them to make more money,” says Whitaker.
8 Авг. 2016