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. ...
In early Middle Ages incipient beer brewing was a science, in which it was still necessary to find correct decisions and systematize experience. Only the clergy could do it, because there was nobody else - peasants and artisans could not read. Besides, monks were able to choose the best from a great number of beer recipes, because despite ascribed dogmatism, they were more used to dissert upon rightfulness of decisions than other social classes.
Monasteries were the centers of knowledge accumulation that were a sum of opinions and quotations – like a Google of Middle Ages, according to an expression of philosopher B. Groys. Church school of Scholasticism assisted the study of all this experience, and studying Aristotelian logic developed critical thinking. In addition, as well as in a modern scientific environment, there was an experience exchange with brothers from other monasteries that advantageously distinguished monks from artisan brewers.
Then how did it happen that today less than a hundred abbey breweries operate in all of Europe, and their role at the beer market is very insignificant from the point of view of sales share? In particular, remaining breweries at Catholic monasteries are a weak echo of their past and in no way remind about their dominance at the beer market. There were several reasons for it.
At first survivor abbey breweries were destroyed or changed owners under the influence of powerful motion of Protestant Reformation and the Thirty Years’ War, which limited the role of Catholicism in Europe.
Thus, peasants, warmed up by Christian ideas of Reformation, and experiencing the burden of constantly growing duties, started setting up generally fair claims to reduce taxes, including for the church, and to abolish serfdom. The reaction of feudal lords was inadequate which triggered Peasant war, continuing 1524-1526, mainly in the southern regions of Germany. However the revolt was severely suppressed and one of its sad results was devastation of many monasteries.
Thirty Years’ War 1618-1648 was a more extensive ordeal as it aimed the Holy Roman Empire itself and virtually divided Europe by the religious affiliation. The losses of civil population and economy were vast, especially on the territory of Germany. And again monasteries with their stocks and households became an easy prey for soldiers and they were ravaged during the attacks.
The secularization* of church property by Napoleon and his allies in 1803 that resulted in destruction of church’s leading role in Europe, including in the field of brewing was still another disaster for Catholics. Most abbey breweries were "resocialized" too, although some of them were later returned one way or another into possession of church.
* Secularization withdrawal of something from the church property and transferring it into the civil property
Finally, with Renaissance and subsequent bloom of natural sciences, brewing went out on a qualitatively new level; the monasteries could no longer house it.
Today we observe a new wave of revival of abbey brewing, connected with interest to piece products, and beer spiritual and historical background. Not the last role is played by a desire to help a monastery financially in its existence and development.
Interest in abbey beer is used by commercial brewing companies as much as possible. Although up to a hundred monasteries are involved in brewing one way or another, in the total sales of beer with monasterial attributes, brands that do not have a direct relation to church undoubtedly prevail.