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. ...
Asahi Mixes Drinks as Japan’s Beer Market Shrinks
In an era when Budweiser is sold by a Belgium-based company and California’s Lagunitas IPA is partly Dutch-owned, Japanese beer has remained in Japan’s hands, away from the global consolidation party.
The head of the biggest-selling Japanese beer maker says he wants to keep it that way.
“The subtle taste and quality of beer that the Japanese favor can be created only under Japanese management,” said Akiyoshi Koji, president of Asahi Group Holdings Ltd., in an interview. “If a foreign company takes control of a Japanese maker, there is a risk of the brand’s credibility being harmed.”
The planned merger of the world’s two biggest beer makers, Anheuser-Busch InBev NV and SABMiller, has brought renewed attention to global consolidation. Japan is something of an anomaly because its top players have been the same for decades. Tokyo-based Asahi and its leading rival in Japan, Kirin Holdings Co., are minnows globally but big fish in their own pond.
That pond is getting smaller. Japan’s population is shrinking and younger consumers are heading toward wine or cocktails instead of beer. Shipments of beer and related brews including low-malt beer came to about 425 million cases in 2015, compared with a peak of 573 million cases in 1994, according to the Brewers Association of Japan.
The answer, say Asahi and its main Japanese rivals, is to branch out into other drinks and try to build a global business focused on premium brands.
However difficult it may be for foreigners to re-create the taste of Japanese beer, Mr. Koji is betting billions of dollars that his company can do so with Italian and Dutch beer. Asahi plans to acquire European brands Peroni and Grolsch for $2.9 billion from SABMiller, divestitures that SABMiller is making to get regulatory clearance for the Anheuser-Busch InBev deal.
“We aren’t planning to engage in a head-on fight with products in a similar price range” to those from AB InBev, Mr. Koji said. “We would like to challenge our global competitors with value-added products.”
Mr. Koji said Asahi had room to make further acquisitions, although he declined to say whether he was interested in Eastern European assets of SABMiller that are also up for sale. An Asahi spokesman said the company could spend roughly $3 billion to $4 billion for further acquisitions and still stay within its debt target.
The Anheuser-Busch InBev-SABMiller combination would create a giant brewer with around 30% global market share by volume. That compares with 1.2% for Asahi, putting it in 10th place, according to Euromonitor.
The megamerger could pose “immense competition to the Japanese beer companies,” said Ranjan Kumar Singh, an analyst at Allied Market Research. “The big players are using these strategic moves to boost profitability by cutting costs.”
Asahi is still growing, despite slower sales of its flagship Super Dry brand. The company has recently posted steadily rising revenue and profit, with sales of ¥1.86 trillion ($18.2 billion) in 2015. Its market capitalization of ¥1.6 trillion slightly exceeds Kirin’s.
It has kept growing partly by diversifying into products such as wine and baby food, and by adding beer alternatives that cost less because of lower taxes. These include “new genre” products brewed from peas or corn to avoid Japan’s taxes on malt.
Such peculiarities in taxes and distribution have turned the nation’s beer market into another example of what locals call the Galapagos phenomenon, in which Japan evolves in isolation from global trends. That is another reason Mr. Koji is confident foreigners wouldn’t try to buy Asahi.
“I wouldn’t say there’s no risk of being acquired,” he said. “But for foreign brewers, it would be extremely difficult to buy a Japanese maker and further boost profitability.”
AB InBev set up an office in Tokyo about a year ago to work more effectively with local partners that handle its beer brands in Japan, regional director Toon Van der Veer said in an email. He declined to comment on whether AB InBev would be interested in directly challenging Japanese beer makers in their home market.
Japan’s other top beer makers, which include Suntory Holdings Ltd. and Sapporo Holdings Ltd., have tried similar strategies of holding on to their core beer market at home while branching out abroad.
“AB InBev’s acquisition of SABMiller could change power relationships of the beer industry. However, it won’t directly affect Suntory because we mainly focus on premium beer, as well as soft drinks, health food and other alcohol,” Suntory Holdings president Takeshi Niinami said in an email.
Suntory, which has long had a more diversified portfolio than Asahi or Kirin, further broadened its business through the $16 billion acquisition of U.S. whiskey maker Beam in 2014.
Kirin, which bought a 55% stake in Myanmar Brewery for $560 million last year, says it is focusing on cost cuts to counteract a shrinking home market. Part of its strategy has echoes of the global consolidation trend, but it is consolidation with a Japanese flavor: combining certain operations rather than entire companies. Kirin and Asahi recently said they would open a joint logistics center and share trains to ship their beer beginning next year.
1 Сен. 2016