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. ...
Testimonials about drinktec 2009 (Enclosure to the Closing Report)
° Richard Clemens, Managing Director, VDMA Fachverband Nahrungsmittelmaschinen und Verpackungsmaschinen, Germany: "Our expectations of drinktec 2009 were met. The event produced the impetus we had expected, even in these not exactly easy economic times. We are pleased about the further rise in the international scope among the visitors: drinktec more than did justice to its claim to be the leading international trade fair."
° Achim Heiming, Contherm Product Manager Europe, Alfa Laval Mid Europe GmbH, Germany: "We are very pleased so far. Only the Monday was a bit slow. The quality of the contacts was good, the visitors were asking very specifically about solutions, for example on the themes of process technology and energy efficiency. We have products that save up to 30 percent energy. We exhibited these new technologies here and customer interest was high. There was no mood of crisis as far as we were aware. Overall the fair was very worth while for us."
° Oliver Schlegel, Key Account Manager Sector Food & Packaging, Bosch Rexroth AG, Germany: "The fair started very slowly, but then from day to day, we noticed a rise in the quality and the number of visitors. We came along this year for the first time and are very satisfied! We like the international character of drinktec. As well as the Europeans there were many visitors from Asia, the Middle East, Lebanon and Iran. Our target customers are, on the one hand, machine manufacturers and OEMs, and, on the other, end customers like, for example, Nestl?. We were able to reach them all with our themes. The quality level of the visitors was very good."
° Ruth Evans, Chief Executive, Brewing, Food & Beverage Industry Suppliers Association (BFBI), Great Britain: "The economic downturn seems to have led to a drop in visitor numbers at drinktec, but the quality of those who came to our stand was exactly what we would have wished."
° Guo Chaomin, General Manager, CNBLM, China: "drinktec is a great event. We met a lot of suppliers and buyers from around the world during the past few days. The latest technologies showcased at this fair impressed us a lot. It is a fruitful trip for us.”
° Dr Klaus Peter Stadler, Director, Coca-Cola Europe, Germany: "drinktec is the world?s leading trade fair for technical equipment in the beverage industry. This event is the best for getting a rapid overview of all the relevant manufacturers. For us it?s about meeting manufacturers and suppliers and of course networking. Our top people from Atlanta were also at drinktec, as well as fillers, or licensees from all over the world. The members of the Coca Cola family travelled from as far afield as Africa, Latin America, China and Australia – in total 500 to 600 people."
° Herbert Eickmeier, Senior Marketing Manager, D?hler GmbH, Germany: "The visitor delegations are not as large as they used to be, but the quality is right. The right visitors are there. We developed new and interesting products specially for drinktec. And our stand design, featuring an Innovation Box and four theme islands, is also brand new and it went down very well with the visitors."
° Marcus Ley, Marketing Manager, Ecolab GmbH & Co OHG, Germany: "Because of the situation in the global economy, we came to this year?s drinktec with mixed expectations. But we were positively surprised. We were able to welcome all the major manufacturers from the beverage and milk industry at our stand. What was noticeable was the high number of visitors from China, India, Japan and Latin America. The visitors to drinktec are very high quality – quality not quantity, you could say. Our customers come from all over the world to talk here about specific projects and business. And that is what makes drinktec so unique. We were able to successfully conclude a number of business deals, and intensify partnerships. drinktec is still the global platform for business relations in this industry."
° Daniela B?der, Marketing, Fanuc Robotics Deutschland GmbH, Germany: "We are here to show a presence as the leading robotics manufacturer, and we were able to do this very well at drinktec. The fair is targeted at end customers, and at this event we were well received by this target group. We think the quality of the visitors is good, many CEOs and General Managers are here, and the level is extremely international. For example, we had many inquiries from countries like Saudi Arabia, the US and Russia."
° J?rgen Henke, Marketing Manager, GEA Group, Germany: "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. The quality level on the part of the visitors, as we saw in our talks with them, has risen yet again. The larger brewery groups come to us with clear ideas. The international scope has risen noticeably, and this time, for example, there were large numbers of visitors from Africa. We also had more brewery customers at our stand from Canada, and these were looked after by the Canadian colleagues in the GEA Group. As regards actual business deals: the background noise is getting louder, and as regards project business we are also looking to the future with more optimism."
° Martin Hammerschmid, Sales Director, Gernep GmbH Etikettiertechnik, Germany: "We are truly satisfied with drinktec! We had many specific inquiries and many highly qualified visitors at our stand. This trade fair is simply a must and the crisis is no reason not to come. The contacts made here and the long-term projects that result keep the business going for years. We reached our target groups, only the German SMEs were fewer than expected. We were very happy with the international visitors. drinktec is simply the number one international trade fair. We go to a lot of fairs around the world, but drinktec is simply the best organised and the halls are very well filled."
° Sun Guanghui, General Manager, HGM Food Machinery Co. Ltd., China: "Thanks to drinktec 2009, HGM company has taken the opportunity to show the competitive advantages of brewing systems and stainless steel tanks to Europe and even the whole world. What we want to express is that drinktec is a professional bridge which brings real results as regards communicating with old customers and finding out about new potential customers. HGM has received great benefits from drinktec 2009 – many inquiries and HGM brand advertising, etc. drinktec is rightly described as 'professional and worldwide'. We're looking forward to the next drinktec.”
° Matthias Jablonski, Manager Marketing and Communications Europe, Husky Injection Molding Systems Ltd., Canada: "Husky is very pleased to have exhibited at drinktec 2009. The show allowed us to demonstrate our commitment to beverage packaging by showcasing our latest innovations to the industry. Our booth was extremely busy with not only local visitors, but guests from all around the world. Having given us the opportunity to meet with existing beverage packaging customers, as well as build new relationships, this was a successful show for Husky.”
° Roland Flach, CEO, KHS AG, Germany: "Interest in KHS as a supplier of integrated solutions was enormous – this we were able to see from the many visitors at the KHS stand who had travelled from all over the world. This underlined the KHS drinktec motto of 'Competence in Solutions' in a very successful way. As well as full integrated systems and solutions competence, attention in talks with customers and new potentials focused on the groundbreaking innovations that KHS was presenting at drinktec. One of them was a brand new designed stretch blow mould machine which has an output of up to 72,000 plastic bottles per hour – with a further reduction in manufacturing costs and a further improvement in all aspects as regards sustainability."
° Prince Luitpold von Bayern, Managing Director, K?nig Ludwig Schlossbrauerei Kaltenberg, Germany: "drinktec was very worth while for us. We are very happy with the result. For us it was about maintaining contact with our customers and winning new customers. We were able to conduct promising talks with top decision-makers from all over the world who were looking for a high-value brand and who were interested in manufacturing our products under license."
° Rufino Landaluce, Director, Landaluce, Spain: "We have been exhibiting at drinktec since 1985. This time the visitor delegations were smaller, but the key people were there. We welcomed customers from Europe and South America at our stand. In many companies there is movement and change, and drinktec was a good opportunity to make new contacts. There are signs that business is picking up, that there is more activity. The word investment is being spoken again, and that was not the case a few months ago."
° Bill Taylor, Group Technical Director, Lion Nathan Ltd, Australia: "At drinktec there is always something new to see and experience, and this year was no exception!"
° Jan-Willem de Munk, Vice President Food & Beverage Europe, MeadWestvaco Packaging Systems, USA: "As a player in the brewing world, you just have to exhibit at drinktec. There were fewer visitors here than four years ago, but that was to be expected in view of the economic crisis. All of the visitors were extremely competent professionals. The representatives of all the major breweries were here, and we were able to discuss our new developments with the customers."
° Angelo Cadeo, Chairman, Miteco AG, Switzerland: "For us drinktec is the trade fair 'par excellence', the one that enables us to consolidate existing contacts and get to know new, potential customers. Here you really do get to meet the trade, all the most important people in it from around the world. We invested a lot in this year?s drinktec and expect a good response. The result is more than positive. We are delighted! It was a big effort, but already we are all looking forward to the next drinktec."
° Waldemar Schmitke, General Manager PET Systems, Netstal-Maschinen AG, Switzerland: "For us drinktec is a real barometer. We came to Munich with high expectations and these have almost been exceeded. The quality of the visitors was extremely high – people who want to do business and have a real interest. We were also happy with the visitor frequency at our stand. The visitors came from all over the world, in particular there were many from the Middle East and the Far East, among them several delegations from China. We were also able to sign deals during the fair, and expect for the future a moderate growth in the PET area."
° Menno M. Holterman, Chief Growth Officer, Norit, Netherlands: "We are extremely satisfied and positively surprised about the high number of customers from Asia and South America. In general we can say that there is more appetite for investment again, so long as the ROI is right. At drinktec we identified, with our customers, where there is potential for savings, and in this way, we were able to sign up a number of contracts. 'Saving money and the environment' – that just about sums up the business talks we held. We chose the camel as the symbol for water efficiency. In the West Entrance we put up a large poster that was received very well. Our main theme is using clean waste water and re-using it in the manufacturing processes."
° Hilda Ch?del Quevedo, Brand & Marketing Communications Manager, O-I Europe, Switzerland: "We are very satisfied with drinktec. What we find outstanding here is the broad spectrum of visitors and the international scope among them. Many come from as far as South America, South Africa and Australia. We achieved the goal we set ourselves in coming to this fair. As an American firm our business in Europe is still relatively new and it was important to us to pave the way for contacts here and raise the profile of the company. In addition we are firmly convinced of the benefits that glass has as a natural packaging material. For us drinktec provides a very good platform."
° Dr Ralph Heusslein, Director Scientific & Laboratory Services, Pall Food and Beverage, Germany: "Exhibiting at drinktec was very well worth while for us in every respect. Important customers from beverage and liquid food technology came along to our stand to find out about new developments in filtration and separation technology. In addition to sales talks there were also important business deals signed, which indicate a change in the trend in the market. The visitors were all very high calibre. Our presentation at drinktec showed that we are able to offer more and more process solutions, going beyond just filtration technology. Key focuses in all this are cost-effectiveness and cost savings."
° Pietro Cassani, General Manager, SACMI, Italy: "For SACMI, drinktec is very important. We have presented several innovations, including the new modular labelling machine RFST. For all these new solutions, we recorded positive feedback from customers and we are very satisfied with the flow of international visitors, which indicates that the industry has started to recover.”
° Roberto Schianchi, Market Operations Executive Vice President, Sidel Group, Italy: "drinktec 2009 has been a very positive edition for Sidel, because we met a huge number of customers represented by delegations whose level was the highest we have ever seen. At our booth, we had the opportunity to discuss with some of the most important CEOs, supply directors and purchase directors about the main future trends of our industry and to show them the results of our strong investments in R&D, focused on sustainability, flexibility and advanced services.”
° R?diger Selig, Marketing & Communication F&B, Siemens AG, Germany: "We were very satisfied with drinktec, both in terms of organisation and as regards talks with customers, equipment suppliers and systems integrators. drinktec is very important to us as a platform for presenting new developments and innovations, for example, more efficient process automation and energy/water management for a sustainable use of resources. The talks we had were mainly about specific projects. Now, with these positive experiences, we are already looking forward with great expectations to the next drinktec."
° Mongi Goundi, Managing Director, Sinalco International GmbH & Co.KG, Germany: "The way the fair went has put us in a very positive mood. We are looking for licensees around the world, partners who have a production facility but no brand. We already signed up three deals at drinktec, and conducted a number of interesting talks which hold promise for the future. Overall the fair was better for us than when we were here in 2005. We handed out samples of our new product Sinetta at the West and East entrances, and the visitors received this very well. In total we gave away 25,000 bottles."
° Caroline Sanders, Marketing Director Ingredients EMEA, Tate & Lyle, France: "The fair lived up in full to our expectations. We are very satisfied. The quality of the contacts at our stand was very good. Also, the trade audience at the whole of drinktec seemed to us to be of a very high professional calibre. The visitors were very international, many people came from the Middle East, for example. drinktec is a very interesting event for the whole European brewing sector. What we really liked was the tremendous interest in innovations. As a result of that we had some very good talks, in particular about specific projects and business."
° Klaus Heitlinger, Managing Director, Verband der Deutschen Fruchtsaftindustrie, Germany: "drinktec is the highlight of the beverages fairs and a must for the sector. It is extremely well organised and the visitors can find their way around very easily. Also the whole team, under the leadership of Petra Westphal, has excellent contacts with all the participants. The VIP lounge is a good place for holding talks at short notice and as a place to have a break from the hectic of the fair."
° Heinrich Sievers, Managing Director, Wild GmbH & Co.KG, Germany: "Our impression was extremely positive, in particular as regards the quality of the visitors. We had some super talks, almost 100 percent of our strategic customers from all over the world were here. drinktec is an extremely good platform, where we can show our customers that we are standing by them, especially when times are tougher. We were surprised by the openness for innovations and improved products. What people were looking for were more cost-effective products achieved through clever recipes but keeping the same good taste."
° Joachim Gunkel, Managing Director, Ziemann Group, Germany: "Our expectations were exceeded. All the important customers were there, and all were of the same high standard, in terms of the people who came along. They were CEOs and Presidents, in other words the very top league. At drinktec we signed business contracts for a number of projects, something that was not to be expected in this way given the general high level of caution in the market. Ziemann is now a comprehensive, single-source supplier, a step that we officially completed at drinktec, by publicly announcing our cooperation with BMS and the joint venture with NLM."
This press release is also available at: http://www.drinktec.com/link/en/22318779#22318779
Photos of drinktec 2009 can be downloaded from: http://media.messe-muenchen.de/drinktec/Standard_e/SelectCatalog_Presse.jsp
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]