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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.

China. Beer company Broo raise $10.5 million in share offer

After a six week initial public offering, Victorian beer firm Broo has announced it has raised $10.5 million and can now list on the ASX.

​The move is part of broader strategy to target the biggest beer market in the world, China.

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"We are very happy to say the least," said Kent Grogan, founder and CEO of Broo Ltd.

Grogan described the company's plan to expand into China and the reliability of the kangaroo logo on Broo's "premium but mainstream" products.

"We have partnered with Jinxing in China, the largest and last independently operated beer company. Next year they will be able to produce one billion cases of beer and given that it's all about supply in the beer industry, we've now signed a deal that gives us virtually limitless supply."

Grogan said that while beer companies such as Fosters have tried to enter the Chinese market previously, they have failed because they attempted to act on their own.

"Some companies have torn up a lot of money over there. We've got impeccable partners, as well as the kangaroo which is the second most recognisable symbol in the world after the Statue of Liberty," Grogan claimed.

Employing around 100 staff in Australia, Broo's local production is outsourced.

"Australia's beer market is very small compared to China's but it's lucrative. Our fastest and loudest revenue stream will be China initially but we will grow Australian offerings too," he said.

Grogan said he is keen for Broo to take on the Lion/SABMiller duopoly, especially as beer consumption is back on the rise.

"We would be the only Australian-owned brand in that space, so there is a great deal of opportunity there," he said.

Broo issued 52,500,000 ordinary shares at $0.20 cents per share to achieve market cap of $121.6 million.

Mixed bag

Beer may be a popular beverage, especially among young men, but for investors, its been a mixed bag over the years with Empire Beer failing to gain traction with a pub-beer concept.

After raising $6.4 million, it eventually moved on to try its hand at other ventures, while Gage Road continues to try to get traction.

It recently went to shareholders cap in hand to raise $10 million, using some of the cash to buy back the stake sold earlier to Woolworths and it intends using the rest to try to push into east coast markets.

The big recent success was Little World Beverages, which made the Little Creatures beers, which Lion Nathan (now part of Japan's Kirin) bought a few years back for $360 million.

Earlier, the listed J. Boag and Son eventually saw control go offshore, and is now also part of Kirin.

Expansion phase

Broo launched its first product, Broo Premium Lager in 2009. A subsidiary, Australia Draught Pty Ltd, launched the Australia Draught Beer brand in 2014.

Two more brands, Kakadu beer and H-Broo-O water are forthcoming according to the company's prospectus.

The document also showed the company had sustained losses during the last three financial years.

"Significant losses which related to the overhead, administrative and financing costs commonly incurred from the early operation of a recently-established business and during the continued development and expansion of the business, and had not achieved profitability on an annual or half-yearly basis," the prospectus said.

Grogan said the IPO now allows them to shift that.

"We've put close to five years in China to develop these relationships, and we've spent the same time in Australia running pilot programs studying where our brand sits. Now it's really about activation."

13 Окт. 2016

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