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. ...
drinktec. Closing Report
° Top decision-makers from all over the world – a full turn-out
° Around 60,000 trade visitors from 170 countries
° Proportion of international visitors rises to 55 percent
° Exhibitors: "Life is coming back into the sector"
drinktec 2009 has gathered together the top decision-makers in the international beverage and liquid food industry in Munich and in doing so has given the sector renewed impetus. "Virtually all the CEOs and Presidents from companies around the world turned out here," was the unanimous opinion of the exhibitors, all of them praising the "extremely high" quality of the visitors. Intensive talks were held at many stands, laying the foundations for upcoming investment decisions; many of the exhibitors reported they had signed up business agreements at the fair. Even though the climate as regards investment is still cautious, drinktec 2009 has marked a turnaround in decision-making.
drinktec confirmed its reputation as the world?s most important business and information platform for the sector in impressive style. It is the world 'summit' for the beverage and liquid food industry – in this, too, exhibitors and visitors alike were agreed. Volker Kronseder, Chairman of Krones AG and President of the Advisory Board of drinktec 2009, described how he saw the mood in the halls: "People are no longer paralysed with shock, life is coming back into the sector." It is a view he shares with many of his colleagues in the sector. Menno Holterman from Norit also sees light on the horizon after drinktec 2009. "There?s more appetite for investment again, so long as the ROI is right. We have signed up a number of contracts."
"Quality not quantity"
Wherever you looked in the twelve exhibition halls at the fair, the general picture was one of interested professionals from all parts of the globe, seeking out innovations, finding out about machinery and plant, and conducting intensive business talks and negotiations in the exhibitors? offices and in the VIP lounges. In all areas of the exhibition the emphasis was on cost-saving and sustainable solutions. At the stands it was clear that visitors from outside Germany were in the majority. "There was a noticeably high number of visitors from China, India, Japan and Latin America," was how Marcus Ley from Ecolab put it, for example. He summed up: "Quality not quantity" – this assessment was one often expressed by the exhibitors, when commenting on the quality of the visitors.
Proportion of international visitors rises to 55 percent
A glance at the visitor numbers confirms the picture seen in the halls. In terms of international representation, drinktec was able to expand still further, from an already high level. 33,000 trade visitors journeyed to Munich from abroad; they came from a total of 170 countries. This again significantly raised the proportion of international visitors to 55 percent. There were particularly strong rises in visitor numbers from China, India, the US, South Africa, Mexico and the United Arab Emirates, and from South America and Africa. In terms of visitors from Germany, however, the figures reflected the expected fall. Around 27,000 visitors in total came from Germany. Overall, over the six days of the fair, the trade fair attracted around 60,000 visitors.
"Melting pot of the beverage industry worldwide"
In terms of the exhibitors? assessment, the drop in the number of German exhibitors played only an insignificant role. The critical factor for them, as regards the success of their participation in the fair, was visitor quality and the fact that the visitors came from all parts of the world – this was the overriding view of the exhibitors. J?rgen Henke, Marketing Manager at the GEA Group, summed up the event as follows: "You can?t measure the success of a fair on visitor numbers alone. drinktec is the key communication platform for our sector, it is the melting pot of the beverage industry worldwide. This is where we all meet up."
Exhibition Management: "Overall very satisfied"
For Messe M?nchen GmbH, the organiser of drinktec 2009, Managing Director Norbert Bargmann, drew the following conclusion: "Overall we are very satisfied. In the run-up to drinktec we, too, had to contend with the global economic crisis. Nevertheless we have succeeded in bringing the top ranks of the beverage and liquid food industry to Munich – and that is the critical thing for the exhibitors. The high number of visitors from outside Germany, and the very broad spread of countries they represent, shows just how highly regarded drinktec is around the world. This is the place to meet up, this is the place to agree contracts and it is the place to prepare for new business. The drop we have seen in German participation is due primarily to budget cuts and the resulting limitations on business travel. Yet, from Germany, too, all the key players in the beverage and liquid food industry were represented, but no longer with the same size of team."
Top marks from the visitors
In terms of visitor satisfaction, too, drinktec was able to make further gains from an already high level. The representative survey of visitors, conducted by TNS Infratest, turned in top results across the board. Almost all the visitors (96 percent) to drinktec 2009 described the event as "excellent to good". 95 percent of the visitors gave this same top ranking to the breadth and depth of the range of exhibits. And 91 percent of the exhibitors regard drinktec as the leading trade fair for the sector.
High expectations of future economic development
The successful course of drinktec 2009 has awakened high expectations on the part of exhibitors and visitors as regards future economic development. Their optimistic statements are reflected in the results of the survey. Accordingly, 64 percent of the exhibitors and 56 percent of the visitors expect the economic situation to improve. This is considerably more positive than expectations after drinktec 2005.
Trade forums – a magnet for the trade audience
The supporting programme to drinktec was extremely well received by the trade audience. The two trade-fair forums in Halls B1 and A2 turned out to be a real magnet. Independent experts from all over the world gave lectures here on subjects covering the whole process chain, from manufacture, to filling and packaging of beverages and liquid food, as well as on issues concerned with marketing. Further highlights in the supporting programme were:
° The presentation of the 'Beverage Innovation Awards', in Oscar-style, at a gala event.
° The two-day fruit-juice congress 'International Fruit World' (IFW) on the subject of liquid fruit and fruit processing.
° The PET World Congress, held for the third time, which tackled all the relevant issues in technology and marketing.
° The presentation of the first-ever Dairy Technology Awards, for the successful implementation of innovative technology.
Success for oils+fats
Attracting 2,600 visitors (2008: 1,200 visitors) from over 90 countries (2008: 58 countries), the third oils+fats, International Trade Fair for the Production and Processing of Oils and Fats made from Renewable Resources, celebrated a great success. The number of visitors attending the event more than doubled since last year. oils+fats took place in parallel with drinktec, between 16 and 18 September.
The next drinktec takes place from 16 to 21 September 2013.
This closing report will be available in Spanish, Italian and French from Tuesday, 22 September, at: www.drinktec.com
This press release is also available at: http://www.drinktec.com/link/en/22320991#22320991
Photos of drinktec 2009 can be downloaded from: http://media.messe-muenchen.de/drinktec/Standard_e/SelectCatalog_Presse.jsp
Statements from exhibitors and visitors are collected together in Press Release no. 46 at: http://www.drinktec.com/link/en/22318779#22318779
An analysis of the exhibitor and visitor survey is contained in Press Release no. 48.
Your press contacts for drinktec 2009:
Johannes Manger and Christina Maier
Tel. (+49 89) 949-20630, Fax (+49 89) 949-20689
[email protected] / [email protected]