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. ...
Beer tasting in different situations
By the perception of "quality" consumers generally understand their personal product taste appraisal. Conclusions about the beer quality are drawn on the basis of whether they like it or not. Recently the company "Romir" has conducted an experiment to investigate the effect of consumption atmosphere on the beer quality perception. As it turned out, the environment in which people drink beer significantly influences the subjective taste sensation.
The investigation was conducted in three stages. At the first stage the focus-groups were drawn, it gave a possibility to define main factors which affect the consumer's perception, such as: environment, emotional state aspects, atmosphere, reasons to consume beer.
During the second stage the main impulsive causes and the most typical and widespread situations of beer consumption were detected.
The final stage of investigation was an experiment which made it possible to define the environment significance in the process of beer consumption, criteria of its taste and quality estimation. 180 men aged from 18 to 55 took part in the experiment, they tasted beer "Baltika #7" in different situations. Under the experiment terms, participants did not know the brand of the beer they tasted.
- Men aged 18-55, beer consumers
- Product test - individual product testing in certain simulated consumption situations
- General selection scope - 182 interview (Moscow)
- Three homogeneous groups of beer consumers
- Each group tests beer in different places and situations
Simulated situation № 1: beer consumption at the bar.
The respondent is sitting at the bar, tasting the beverage. Several people can taste beer simultaneously at different tables. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. Taste test is conducted in the natural environment of the bar.
Simulated situation № 2: beer consumption in negative conditions.
Taste test is conducted in the warehouse premise. Several people can taste beer simultaneously. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. In 2-3 minutes after the beginning of taste test such a negative situation is created: an assistant begins to talk over the mobile phone loudly, shouting at his imaginary partner in conversation, cursing, standing at that near the respondents. After the telephone conversation the assistant remains in a stress state and expresses resentment over the imaginary situation (occupational or personal conflict situation). The interview is conducted in 7-10 minutes after the beginning of the taste test.
Simulated situation № 3: beer consumption at home.
The respondent is sitting on the sofa or arm-chair, tasting the beverage. 2 or 3 persons can taste beer simultaneously. The respondent is tasting beer during 7-10 minutes without the presence of interviewer. After that the respondent is asked to go into another room for an interview.
The objectives and tasks of investigation
- To study the environment significance in the process of product consumption (beer)
- To study the environment effect in the process of consumption on the product perception
- Simulation of certain beer consumption situations
- Investigation of consumers' behavior peculiarities
- Evaluation of the most and the least important product characteristics when choosing and buying beer
- Estimation of product taste
- Estimation of consumption situations
- Detection of the intention to buy the product which was tested
Research summary (1)
- When choosing and buying beer the majority of respondents (57%) in the first instance have regard for beer taste, then for the brand, beer color, quality, alcoholic content and price.
- Beer taste and its quality are the determinants in choosing and buying the beverage for all the respondents. For the majority of respondents (84%) aftertaste plays a significant role. The most important characteristic for the respondents is the taste. Presence of froth and beer color appeared to be the least important, only the quarter of respondents named them.
Research summary (2)
Beer taste test
- Home situation and bar appeared to be the most comfortable environment for the respondents. The variant "uncomfortable" chose only those who tasted beer in the warehouse.
- In general the respondents liked the beer. At that the respondents who conducted the test at home more frequently than those who did at the bar and warehouse replied that they "liked the beer very much". The respondents who tasted beer at the warehouse replied more often than the respondents who tasted it in other situations that they "did not like" the beverage, or "did not like it at all".
- In the majority of cases the respondents gave the beer a rather high appraisal by all the suggested evaluation specifications. At home the respondents gave high appraisal of such specifications as taste, color and beer bitterness, at the warehouse they highly appraised beer aroma and aftertaste.
- The respondents who tasted beer at the bar more frequently than the others pointed at the pleasant bitterness, optimal malt flavour and the proof. At the warehouse the beer was evaluated as lighter with pleasant aftertaste and optimal bitterness. At home the beer was referred to as milder, with optimal purity of color. Purity and vehemence of beer aroma was described as "just what I wanted" more frequently at the bar and at home.
Research summary (3)
- At the bar the respondents called the beer modern more frequently but did not agree that it was the beer of a famous brand. At home the respondents stated that they were tasting the beer of a famous brand, the beer which creates an atmosphere of holiday, which is pleasant to drink and is suitable for a nice company. At the bar and at home the respondents more often than at the warehouse agreed that the tested beer was of good quality, that this beer is "for me". 30% of respondents who tasted beer at the warehouse did not agree that the beer they tasted created an atmosphere of holiday, the quarter of respondents did not agree that this beer is "for them".
- The respondents who tested beer at the bar and at home more frequently evaluated beer as not "the most expensive, but not the cheapest" one. The respondents who tasted beer at the warehouse more often than the others described the beer as cheap.
Research summary (4)
- The men who tasted beer at home stated that the beer is suitable for meeting with friends and for giving oneself a treat. At the bar the respondents claimed that the beer is suitable for meeting with friends and for drinking in a company with people they don't know very well. Those who tested it at the warehouse, on the contrary, did not agree that this beer is suitable for meeting with friends and for drinking in a company with unfamiliar people.
- In all the situations a significant part of the respondents (73%) stated that the tested beer is suitable for drinking after work or at the end of the working week. In return, half of the respondents did not agree that the beer is suitable for a date with a girl.
- The respondents who tested beer at the bar and at home more frequently intended to buy the beer they tasted. The men who tested the beer at the warehouse showed greater unwillingness to buy the beverage.
- The respondents who tested beer at the bar defined the optimal price for the beer as more expensive than those who did in other situations, at the range of 40-44 roubles per bottle 0,5 litres in volume, those at home defined the price at the range of 35-39 roubles and those at the warehouse - 35 roubles.
Beer choice: main characteristics of the product
The majority of respondents while choosing and buying beer pay attention primarily to the beer taste and then the brand, beer color, quality, proof and price.
Significance of the main beer characteristics
Taste, quality and aftertaste of beer play the most crucial role in the choice of the beverage, at that, the respondents called its taste the main characteristic. The least important turned out to be the presence of froth and beer color.
Evaluation of comfort during beer taste test
The respondents considered home and bar to be the most comfortable environment. Variant "not comfortable" chose only those who tested beer at the warehouse.
General evaluation of beer
On the whole, the respondents liked the beer. More often favorable reports were given by the respondents who tasted beer at home. The respondents who tasted beer at the warehouse more frequently than those who did it in other situations did not like the beverage or did not like the beverage at all.
Evaluation of the beer flavor profile
In the majority of cases the respondents gave the beer a quite high appraisal by all the suggested evaluation criteria. The respondents who tasted beer at home gave positive characteristics to the taste, color and bitterness of the beer more frequently than the others. At the warehouse higher marks were received by the beer aroma and aftertaste.
Beer type evaluation
The respondents who tested beer at the bar and at home more often evaluated beer as "not the most expensive, but not the cheapest" one. The respondents who tested the beer at the warehouse more often than the others called it cheap.
The respondents who tested the beer at the bar and at home more frequently intended to buy the beer they tasted. The men who tested beer at the warehouse showed greater unwillingness to buy the beverage.
Andrey Milekhin - the president of the holding company "Romir", Doctor of Science (Sociology), Candidate of Science (Psychology), professor at Moscow State Pedagogical University, academician of Russian Academy of Natural Sciences.
Igor Berezin - the president of Marketing Specialist Guild, member of the directors' board of "Romir", leading consultant.
Olga Gorelova - general manager of "Romir" Monitoring Standart.
On the whole, the respondents liked the beer. At that, quarter of participants who tasted beer at home claimed that they "liked it very much". The respondents who tasted beer at the warehouse more frequently (19% participants), than other participants "did not like" the beverage or "did not like it at all".
The survey results detected that the decisive factors in choosing and buying beer are, in the first place, its taste and quality. Characteristics for quality determination used by professional tasters, such as color, malt flavor, presence of froth, appeared to be less important for the participants. However, the place and conditions of taste test had an effect on the perception and appraisal of certain beer taste characteristics and influenced the product evaluation.
The participants who tasted beer at home considered it to be milder (47%), with optimal color intensity (68%). Aroma intensity and vehemence were described as "just what I wanted" more frequently at the bar (62% each) and at home (63% and 62%).
At the bar the respondents described beer as modern more frequently but did not agree that it was the beer of a famous brand. At home the respondents stated that they were tasting the beer of a famous brand, the beer which creates an atmosphere of holiday (63%), which is suitable for a nice company (72%) and which is pleasant to drink (80%). At the bar and at home the respondents more often than at the warehouse agreed that the tested beer was of good quality, that this beer is "for me".
The men who tasted beer at home claimed that the beer is suitable for meeting with friends (82%) and for giving oneself a treat (68%). At the bar the respondents stated that the beer is suitable not only for meeting with friends (79%), but also for drinking in a company with unfamiliar people (76%). Smaller number of participants who tested the beer at the warehouse agreed with these statement.
The majority of participants who tasted the beer at the bar and at home expressed an intention to buy it in future. On the other hand, those who tasted it at the warehouse more often than the others called the beer cheap and showed unwillingness to buy it.
Thus, the survey results confirmed that the consumption conditions have an impact on the taste perception and, correspondingly, on the beer quality evaluation. The highest appraisals by all the criteria were given to the taste test conducted at home because pleasant quiet environment helps to estimate the beer taste characteristics in full measure. Beer consumption in inappropriate conditions reduces performance measures of the tasted product as it does not make it possible to concentrate fully on the process of consumption and direct attention entirely to the taste.