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. ...
The global outlooks of the legal market of cannabis are excellent. It is possible to simultaneously imagine dry law repeal and craft brewing boom but not in one but in several consumer categories. For alcohol is contained in liquids and cannabis derivatives can be in three physical forms.The value of legal market of cannabis and its products can reach 10% of the world beer market in five years, and in 2030-2040 even reach the same scope provided the current rates of legalization and development of market infrastructure remain at the same level. Cannabinoids are actively integrating into the food industry from chewing gum to beverages deforming the pharmaceutical and alcohol markets, they influence the trends of healthy lifestyle and beauty. ...
Over the recent 3 years, weather has been often mentioned among the reasons for the decline in beer production and sales, though it is clear that it cannot be a constant negative factor.
As we have already noted, better dynamics in 2013 conflicts the social and economy context and the link between the beer market and the GDP. The reason is obvious – unusually hot summer breaking temperature records.
The area of the temperature anomaly is located in the eastern China. While it was just hotter than average in Beijing located to the north of this territory and in Guangzhou located to the south, territories from Shanghai to Xi’an broke temperature records for the recent 140 years. The prolonged spell of scorching temperatures is a result of stationary high pressure off the eastern coast, which has prevented tropical moisture from delivering normal summer rainfall.
As we match the temperature fluctuations to the production dynamics since 2012, we can conclude that if not for the weather affect, the dynamics would have looked like a smoothed curve or even straight line, that is, a gradual transition from growth to stagnation and decline.
The hot summer of 2013 created the high base effect. In 2014, when the weather was usual, it cannot support the beer sales. The simultaneous decline of the average price and the beer production dynamics from June to September 2014 can be seen at the graph*.
* In order to calculate the temperature, we used the weather monitoring archive data for 11 cities which in our view reflect the general situation in the country: Beijing, Shanghai, Chengdu, Wuhan, Kunming, Guangzhou, Chongqing, Harbin, Xi'an, Shenyang, and Qingdao. For daily data in each of the cities the monthly temperature average was calculated, then, the average for city data was calculated.
In order to check if the weather really played such an important role, let us analyze the dynamics of demand change for another seasonal product and beer rival – soft drinks. We can see the obvious connection between their production dynamics and beer output in the high sales season.
In 2015, the weather was rather favorable to the brewers’ sales. On an average in the country July was a little cooler versus 2014, yet the other months of the season were hotter. As for the weather, the base effect of 2015 can be considered neutral or moderately negative.
However the season of 2016 started not very well, and by the end of July we can speak of a pronounced negative effect not only for beer sales but for the country’s economy in general.
The weather in May in the central and eastern regions was comparatively cool, which had a minor negative effect on the production dynamics. In June, the temperature was already at the level with 2015, and in July it became much hotter. The number of days with precipitations in 2016 increased in April and May, but decreased in June and July. However, this year not the rainy days number but precipitation quantity matters.
Every year heavy rains in China occur along the seasonal Mei-Yu (“plum rains”) front extends from eastern China across Taiwan into the Pacific south of Japan. Associated with the southwest monsoon, these rains typically affect southeastern China from mid-May to mid-June and northern China during July and August.
In July 2016, record-breaking heavy and incessant rains caused dramatic floods in central and eastern regions of China. Torrential rains affected 33 million people in 28 provinces, submerging huge areas of cropland. Heibei province population suffered the most.
Heavy rains could not substantially affect beer production and sales in the first year half 2016, but will seriously influence brewers’ performance in the second half of the year.
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21 Сен. 2016