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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. Crafting a new beer boom

One hot Saturday afternoon mid-September, Li Hao, a 29-year-old researcher with a chemical company in Shanghai, binged on a dozen varieties of craft beer. He helped himself to all those drinks at a beer fair at Pudong Kerry Center in Shanghai. More than 50 stalls were selling hundreds of brands, both global and local. Li wished he had a pair of bellies to take them all in.

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"I had never imagined beer-drinking could produce varied experiences of tastes wildly different from one another. Until now, beer was just an economical refresher for me, particularly on scorching summer days. All those cans and bottles of different brands tasted the same more or less. But craft beer-phew, it's different, and like wines now ... high-end beverages, with qualities that match their high price," Li said.

In Shanghai these days, consumers can buy more than 200 varieties of craft beer at high-end groceries, brewery-run outlets, boutique dining bars or through home-delivery services. Prices range between 30 yuan ($4.5) and 100 yuan per liter.

Investors are eyeing the craft beer market as segment expansion appears on the horizon and demand for niche products rises, said experts.

According to Wang Deliang, brewery research director with the China National Research Institute of Food & Fermentation Industries, investments in the craft beer segment have been rising in recent years because of prospects of high profits of up to 30 percent.

Investments need not be high as in other liquor segments like whisky because craft beer, a niche product, is not produced on a mass scale, said Wang.

Take Beijing-based Panda Brew that started in 2013. It has so far received 20 million yuan from a handful of investors, including venture capital firm Tiantu Capital. Its capacity has increased to annual output of some 1,000 metric tons, which is supplied to 50 cities across China.

Seeing such market potential, large brewers are jumping on the craft beer bandwagon. Earlier this year, Guangzhou Zhujiang Brewery Group Co Ltd announced it will launch four facilities to produce craft beer and use online distribution channels to sell it.

Investments in consumption-driven sectors, particularly high-end food and beverages, picked up in recent years because consumers have been upwardly mobile. Supply-side reforms have also helped improve operational efficiencies, improving prospects for profits. An increasing number of consumers have been exposed to a wider range of choices due to travel for work, tourism or education, thus creating demand for new products in the domestic market.

The fizz in the craft beer market reflects consumers' rising individualism and assertiveness with regard to preferences. As the market opens up, more and more imported beer brands, particularly craft beer labels, have increased their offerings in China, according to a research note from consultancy Roland Berger.

While the traditional beer market in China is highly consolidated and dominated by a handful of players, the craft beer brewery market is highly segmented. According to data of Dianping Holdings, China's biggest online food service ratings website and a key information provider, China has more than 3,000 craft beer breweries. Their output and sales revenue are less than 3 percent of the entire beer market.

In the US, craft beer takes about 13 percent of the market share, according to an estimate in a research note of Founders Securities.

Unlike the mild-tasting canned and bottled beer, which is distributed through supermarkets under the big players' brands, craft beer usually has a stronger taste, a result of high-gravity brewing. Each variety of craft beer has a distinct taste as the raw materials used, brewing conditions, techniques, and brewers' flavors vary. Output is usually to the tune of just 1,000 liters per day.

"Limited supply, unique flavors, distinct experience and high-end branding all appeal to the younger generation of consumers who like to have something different," said Michael To, marketing specialist with Shanghai-based Focus Strategy Consultancy Ltd.

Shi Dechuan, a 34-year-old software programmer based in Shanghai, said craft beer made by a local brewery along the road to Yunnan province was most impressive. He discovered the beer while traveling in summer this year.

"You don't really want to drink the same beer when you travel to different places, so craft beer, which uses local fruits, tea leaves, malt and yeast, gives you that sense of locality, and makes a tour different,"
said Shi.

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17 Окт. 2016

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