KOLORO branding agency conducted a market research of the beer market in Ukraine. The purpose of this marketing research was to analyze consumers, analyze the beer market itself, as well as analyze the main producers in the domestic market.
You may also be interested in this article about beer production and packaging or analyzing the design of beer bottles and labels. We will be glad if you find the information useful.
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Analysis of beer consumers in Ukraine
Beer is one of the best attributes of socializing, helping people to spend more relaxed time together with friends and loved ones. Therefore, consumers associate beer with pleasure, cordial conversation and pleasant pastime. In our article read about what beer in Ukraine can complement your “heart-to-heart talk”, what beer brands are brand leaders in Ukraine and which brands are still national brands that have not been absorbed by large global corporations.
In Ukraine, men drink beer more than women (75.5% and 46.5% respectively). Depending on age, beer drinkers are most likely to be in the 20-29 age group (69.9%) and least likely to be in the 50-59 age group (48%). In terms of territorial distribution, beer consumption is highest in the northern regions (63.5%) and lowest in the south (53.8%). Depending on the level of income in the family, people with a high level of income (64.7%) buy beer more often, and people with an income below average (54%) buy beer less often. Most often beer is drunk in the volume of 0.5 liters (50.2%), less often in the volume of 2-3 liters (3%) and more than 3 liters (0.7%). The structure of beer consumption depending on the volume drunk by Ukrainians is presented in the diagram:
Most often Ukrainians drink beer at home (54.2%) and in establishments (17.2%). Other places of beer consumption are presented in the diagram:
Consumer preferences in Ukraine follow the trends of other European countries, so there is a reduction in the medium-price segment (in Ukraine it is 8-10 UAH per liter): some consumers switch to premium (10-14 UAH per liter) and super-premium (14+ UAH per liter) brands, and the other part of consumers, on the contrary, save more, and “drift” from the medium-price to the economy segment (less than 8 UAH per liter).
Analysis of the Ukrainian beer market
Analyzing the state statistics data for 2005 – 2012, we can conclude that there has been a marked increase in beer sales both in retail trade and in the restaurant network. Thus, in just three years, beer sales in retail trade increased by UAH 840 mln or 18.9% in 2011 and by UAH 1,095 mln or 20.7% in 2012. But at the same time the share of beer turnover in the turnover of food products decreased from 4.38% in 2010 to 4.24% and 4.23% in 2011 and 2012, respectively, which means that the average beer consumption in the country decreased. This indicator fell from about 63 to 61 liters per capita per year.
Market structure
Today, about 400 types of beer are produced in Ukraine. In the structure of beer production the largest share – 49% – is occupied by beer in PET packaging, in bottles – 34%, in kegs – 11%, in metal cans – 6%.
Beer production in Ukraine is concentrated in the hands of three multi-brand corporations, which produce almost 90% of beer. The market leaders are AB InBev, Carlsberg Ukraine andObolon. The alliance of Efes and SABMiller and “Persha Privatna Browarnya” (since April 2012 – Alliance PPB and Oasis CIS) are steadily gaining momentum.
The structure of the beer market in Ukraine in 2011 and 2012 is presented in the diagrams:
Despite a slight decrease in market share by 1.2%, AB InBev retains its market leadership. Its market share in physical terms amounted to 35.4% in 2011 and 34.2% in 2012. In monetary terms, the company’s share in 2012 amounted to 34.6%.
Carlsberg Group, whose market share in physical terms amounted to 28.8% in 2011, is in a confident second place. In 2012, Carlsberg’s share increased by 0.5%, i.e. to 29.9% in physical terms and to 29.6% in monetary terms.
The Ukrainian company Obolon with a market share of 23.7% in volume terms in 2011 and 22.7% in 2012 completes the top three.
Despite their small market shares compared to the key players, SABMiller and Persha Privatna Browarnya tend to increase their own share in the structure of beer production in Ukraine. Their shares increased from 5.8% to 6.9% and from 2.5% to 4.5%, respectively.
AB InBev
Operating in Ukraine since 2000, the young company AB InBev is the leader in the Ukrainian beer market and one of the five largest FMCG (Fast Moving Consumer Goods) companies in the world. In 2009 the company generated 36.8 billion USD. The company is headquartered in Leuven, Belgium. Approximately 120 000 people in 23 countries of the world work daily for the total profit of this company. In Ukraine the company unites three brewing enterprises – branches in Chernihiv, Kharkiv and Mykolaiv.
The company’s brand portfolio includes both national brandsChernigivske,RoganandYantarand international brands Bud, Staropramen, Beck‘s, Stella Artois, Leffe, Hoegaarden andLowenbrau.
Carlsberg Ukraine
Carlsberg Ukraine is a part of Carlsberg Group – one of the largest companies in Europe, the world’s fourth largest brewing group by capital. Its portfolio includes 500 beer brands and a significant number of non-alcoholic beverages. Carlsberg Group employs more than 40 thousand people, its products are exported to more than 150 markets.
Carlsberg Group in Ukraine unites three breweries: PJSC Slavutich Brewery in Zaporizhzhya, Kyiv Brewery and Lviv Brewery. The total brand portfolio includes both well-known domestic brands “Slavutich”, “Lvivske“, “Arsenal “, “Khmilne”, “Baltika “ and world brands such as Tuborg, Carlsberg, Holsten, Corona, Negra Modelo, Guinness, Zatecky Gus, Kilkenny, Harp, Warsteiner, Grimbergen.
Obolon
“Obolon” is the only Ukrainian brewing corporation, which is among the forty largest brewing concerns in the world and is one of the leaders of the beer market in Ukraine.
Obolon Corporation includes the main brewery in Kyiv – Obolon PAT, which is the largest brewery in Ukraine, two subsidiaries – Zibert Brewery PAT and Krasilovskoye Brewery PAT, six enterprises with corporate rights – PAT “Okhtyr Brewery”, PAT “Sevastopol Beverage Plant”, PJSC “Bershadsky Combine”, PJSC “Dyatkivtsy”, TOV “Obolon Agro”, PJSC “Rokytnovsky Glass Plant” and two separate workshops – a brewery in Alexandria in Kirovograd region and a malt plant in Pskov region. and a malt plant in Chemerovtsy settlement in Khmelnytsky region. In total, the corporation employs about 7.5 thousand people.
Obolon produces beer under such trademarks as Obolon, Zibert, Hike, Zlata Praha, Carling, Desant, Okhtyrskoye, Zhigulevskoye, low-alcohol beverages Icelife, Brandy Cola, “Rum-Cola”, “Gin-Tonic”, “Rio de Mojito”, soft drinks “Zhivchik”, “Cola Nova”, “Lemonade”, “Citro”, kvass “Bogatyrsky” and mineral waters “Prosora”, “Obolonskaya”, “Okhtyrskaya” and “Podgornaya”. “Obolon also produces industrial goods – malt, granulated beer shot and bandage (packaging) tape from recycled PET containers.
Alliance between Efes and SABMiller
British brewing company, SABMiller is the second largest brewing company in the world after AB InBev. SABMiller started its operations in Ukraine in 2008, having acquired almost 100% of shares in the Sarmat brewery in Donetsk. The enterprise continued to produce beer under the Sarmat trademark, and also began to produce certain types of beer under the Czech Velkopopovický Kozel trademark owned by SABMiller.
On March 7, 2012 it was officially announced that a number of SABMiller assets, including Miller Brands Ukraine PJSC, were transferred to Turkish company Anadolu Efes. Under the terms of the transfer, SABMiller in turn received 24% of Efes shares. Efes is one of the largest beer producers in Europe and is also among the top ten largest bottlers of Coca-Cola products in the world.
PPB Alliance and Oasis CIS
Persha PrivatnaBrowarnyaLtd. is a food industry company in Ukraine, which has been operating since 2004 and is engaged in the production and sale of naturally fermented beverages (beer and kvass). PPB is one of the small but successful players in the beer production market, which is now striving hard to expand beyond a local enterprise.
In April 2012, the assets of Persha Privatna Brovarnia (PPB) and Oasis CIS were merged with equal equity participation of the companies. The merged company included Lviv Brewery and Radomyshl Brewery, whose total beer production capacity is 2 million hectoliters. The number of employees is 260 people.
The company’s combined brand portfolio now includes such beer brands as Persha Privatna Brovarnya, Zhiguli Barne, Halytska Korona, Radomyshl, Zakarpatskoye, Stare Misto, Oettinger and Cervena Selka, as well as two brands of kvass – Lvivskyi and Drevlyanskyi. Oasis CIS already has such well-known brands in its portfolio as Budweiser Budvar, Kirin Ichiban, Spaten, Erdinger, Bernard and Bitburger, and it can be assumed that in time other foreign partners will agree to transfer distribution contracts or even a license to produce their brands in Ukraine to the company.
SUMMARY
Thus, the main beer producers on the Ukrainian market are AB InBev, Carlsberg Group andObolon. The first two companies, as well as the alliance of Efes and SABMiller are foreign corporations of international level. “Obolon” is a fully Ukrainian company, and “Persha Privatna Browarnya” is a half Ukrainian company in association with Oasis CIS. As the Ukrainian beer market has recently witnessed a trend of growth in the economy and premium segments, Carlsberg Group and SABMiller took advantage of the situation and increased their market share. At the same time, the companies that focused on the mid-price segment (AB InBev and Obolon) reduced their market share.
Despite price differences, international brands are gaining popularity, leading to growth in the premium segment. The retail value of beer is playing an increasingly important role across all segments as breweries have become embroiled in price competition. Companies are aggressively using bonus packs and holding back prices on economy brands, which in turn leads to growth in the economy segment. For this reason, more attention should be paid to pricing policy, as well as to expanding the range of beer in the premium and economy segments.
MARKET OUTLOOK:
Despite the active actions of large international companies, the import market share continues to grow and the popularity of “author’s” products of small breweries continues to grow. Such breweries are gaining popularity due to the fact that there one can not only drink delicious “live” beer, different from multi-circulation beer, as well as freshly brewed, unbottled beer, but also due to the fact that in such breweries one can have a good time in the company of friends, if they are equipped with a special tasting area with a bar and cozy tables. As a possible option for continuing to increase their share of the beer market, such breweries can start full-fledged production of their products in their region. If they start actively selling beer for takeaway, brewery lovers will surely want to take a couple of bottles of such beer with them.
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