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 view of increased competition with private beer factories, the share of beer production by monasteries started reducing, and then monasteries stopped brewing beer at all. And if by the XX century abbey breweries worked at some places, Bolsheviks stopped their work.
As far as we know, today beer isn't made anywhere in the world on the territory of Orthodox organizations. This occurs despite the fact that there are more than 30 Orthodox churches – some connected by a uniform center, as well as autonomous or self-governed, and heads of these churches can look differently at brewing at monasteries. After all we found mentioning of "Orthodox" beer, but in this case connection with the monastery also doesn’t look very obvious.
Private Finnish company Saimaan Juomatehdas bottles Luostari Dubbel beer. According to the company, "This beer, crafted in collaboration with the Valamo Monastery, is the only Orthodox monastery beer in the world". As seen from its name, this beer for its characteristics belongs to Belgian abbey sorts. Besides Luostari Dubbel this Finnish producer bottles some other drinks without the monastery attributes, for example, organic and craft beer as well as ciders.
Of course, this case is an exception and an original marketing mix for the local market. Greece, Bulgaria, Serbia, Ukraine, Belarus, Armenia, Georgia and Russia – countries with a large Orthodox population (there are about 300 million Orthodox Christians all over the world) could become serious regions of sale for abbey and "Orthodox" beer. But for this purpose there are no real prerequisites as the largest Orthodox churches of the world usually stop attempts of the third-party organizations to use their name, attributes and images for commercial activity.
Also, despite historical background, organization of their own beer production seems unrealistic as representatives of Orthodox churches speak about the harm of alcohol and the need to reduce its consumption more often and sharper than, for example, Catholics. For these reasons breweries very seldom mention monastic and Orthodox subjects in beer production.
As far as we know, in Russia only two brands of "abbey" beer are issued today. One of them is produced in the village of Kalinkino, Kemerovo region and nothing except the name causes additional associations of this beer with the monastery.
A characteristic story is connected with another sort. Vyatich Monastryskoye beer, according to the company’s data, “is brewed for Orthodox holidays on water from the consecrated source…” In 2010 as advertising of this beer posters with an image of a bottle in front of the Dormition Cathedral of Trifonov Monastery and a title "Divine beer" were used. But, according to the management of the company, the Vyatka (Kirov) diocese "didn't understand this creative idea and appealed to take the posters away". Besides, the Vyatka diocese recommended the creative brewers in the future "Not to say the name of the Lord, your God, in vain". Because of this discussion, probably, this new sort of beer was remembered by the residents of Kirov, but actions for further advance of the brand are complicated.
In Ukraine a significant share in the market of cheap beer is taken by a subbrand “Monastyrskoe” of the brand “Rogan” which belongs to AB InBev portfolio of local brands. However marketing specialists of the company for ethical or other reasons didn't make any attempts to develop the subject of abbey beer in advertising of this sort, and placed it in such price segment where it can do without advertising at all. Perhaps for the same reasons a corresponding image disappeared from a label of half-forgotten sort “Veselyi monakh”/ “The cheerful monk”.