Beer in Bulgaria
Euromonitor International's Beer in Bulgaria market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 60 | Publication date: Feb 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Dark beer; Lager by origin; Lager by price platform; Low/non- alcohol beer; Stout
Executive summary
Beer companies in Bulgaria capitalised on investments in production facilities, technology and new product development, made earlier in the review period and continued to penetrate the domestic market. Marketing was the main strategic tool in 2008 and Zagorka AD, Kamenitza AD and Carlsberg Bulgaria AD continued to allocate significant budgets to increase sales and gain share from rival companies. The three leading companies provided support for most brands in their portfolios and economy, standard and premium brands were allocated resources for both below- and above-the-line activities. The other key ingredients – hot summer weather, major sports events (the European football championship) and steady tourist flows – also contributed to the growth.
New product development was not as strong as in previous years, when the domestic premium lager segment quickly expanded in size as a result of newly initiated domestic production of international brands. In 2008, the main additions to product lines were flavoured beers. Carlsberg Bulgaria AD launched Tuborg Lemon and Kamenitza AD added a green lemon-flavoured beer to its core Beck’s brand. Another new product launch that reached the shelves in the 2008 summer was Kamenitza Lev. This is a non-flavoured lighter-style domestic premium lager. Overall new product development clearly indicates the potential of the domestic premium segment and the direction in which it is heading. The “fresh” citrus flavours and “light” styles are likely to spread out to other producers’ portfolios and dictate product styles on the market.
In 2008, producers also engaged in packaging improvement, which was a competitive response to Carlsberg Bulgaria AD’s efforts to modernise packaging for its domestic premium brand “Shumensko Premium”. Both Kamenitza AD and Zagorka AD revamped and modernised the glass packages for their Kamenitza and Zagorka brands.
The 2008 volume growth was 1% lower than the review period CAGR. Despite the marginal volume growth slowdown, per capita consumption is still below that of Central European beer drinking countries and the growth slowdown indicates that the category is gradually increasing its penetration.
Domestic premium lager grew by 15% in volume terms and continued to be the fastest-developing category. The unprecedented growth in domestic premium lager was enabled by serious investments in production, appropriate brand appeal and very competitive pricing. Good distribution, covering a large number of on-trade outlets, also played an important role in boosting domestic premium lager’s sales. Currently, Amstel, Beck’s, Staropramen, Tuborg, Stella Artois, Kaltenberg, Holsten and Kaiser are produced in Bulgaria. In contrast, the overall share of imported premium lager declined, and only Heineken managed to increase sales as a result of proactive marketing.
Competitive pricing is one of the main strengths for the beer companies and, despite the rising costs of barley, hops and energy, beer prices in Bulgaria remained very competitive in 2008. Economies of scale and technological advances enabled the beer companies to maintain their competitive edge and prices were only increased to cover inflationary trends. Also, the excise tax rates remained unchanged, which helped beer companies to remain competitive.
The economy segment accounts for the largest part of volume sales, at 43%, while standard has a 33% share and premium beer accounts for 21% of total volume sales. Clearly, there is potential for development in each category – the economy segment saw volume sales increase by 2%, standard by 3% and premium lager recorded the biggest increase of 14% in 2008, albeit from the lowest base. Dark beer is still a niche product, accounting for only about 3% of beer volume sales. Sales of dark beer are still seasonal and most locally manufactured brands are only sold in the autumn and winter. However, efforts by all three leading beer companies to revitalise winter sales have led to more active advertising. Each of the three leading companies has a dark beer in its portfolio – Zagorka AD’s main brand is Stolichno, Kamenitza AD competes with Kamenitza Tamno (Kamenitza Dark) and Carlsberg Bulgaria AD with Shumensko Red. Tuborg Dark was launched in 2007 as a limited edition product, which also generated interest in the category.
On-trade sales rose to a 33% share of total volumes in 2008, with this increase encouraged by the good weather conditions in the summer and the European football championship. The on-trade establishments are good channels for the sales of draught lager in the premium and standard segments.
The most popular type of beer package is the glass bottle. It is closely followed by PET and, in 2008, 41% of beer was sold in this type of packaging. The trend towards purchasing lager in large PET packs is common for some Eastern European countries. In Bulgaria, mainly standard and economy brands are sold in PET packs, which come in 1-litre, 1.5-litre, 2-litre and 2.5-litre units.
There is a clear trend of reducing the alcohol content in the economy brands and in some of the standard products. This was dictated by considerations about price competitiveness and economic returns as beer companies strove to maintain low prices. The typical alcohol content of an economy brand is between 4.1% abv and 4.5% abv. Mainly the premium brands dictate an abv content of 5%. Any other variations – strong or low-alcohol/alcohol-free beer – are considered exotic. Beer consumers are very traditional and appreciate beer for its refreshing taste and mild alcohol content.
Production, Imports and Exports
Local production covers all beer categories, excluding stout. Traditionally, standard lager was the Bulgarians’ first choice, but the entry of Heineken NV, InBev and Carlsberg A/S with their national subsidiaries has expanded the choice for beer drinkers in the premium and economy segments.
Imports and exports of beer experienced diverging trends, with imports losing their importance and exports experiencing a slight rise in 2007. In 2007, Bulgaria exported 8.4 million litres, which, related to a domestic market of 582 million litres, is a very small quantity. The main export markets are neighbouring countries such as Macedonia, Romania or Serbia. Bulgarian beer is also sold in markets where there is an expatriate population (US, UK and Spain). Imports stood at 4.6 million litres in 2007.
The apparent consumption figure in 2007 stood at 537 million litres, which was some 18 million litres lower than the projected market size. The difference is accounted for by any unsold quantities from previous years, including domestic production and imports.
Table of contents
ALCOHOLIC DRINKS IN BULGARIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Alcoholic Drinks Sales Continued to See Healthy Growth in 2008
Consumers Favouring Heavily Advertised or Healthy Products
Mergers and Acquisitions Create Turbulent Competitive Environment
Dominance of the Off-Trade Channel Continues
Modern Retail Trade Gradually Gaining Share from the Traditional Channels
Slower Volume but Stronger Constant Value Growth Expected Overall
EU Membership to Impact Company-level Strategies
Home Production of Wine and Spirits Hinders the Commercial Sector’s Growth
Micro and Macro Trends Encourage Premiumisation of the Alcoholic Drinks Market
Despite Increasing Demand for Premium Products, Consumer Tastes Remain Traditional
Specialist Retailers
Summary 1 Leading Specialist Retailers 2007
Market Merger and Acquisition Activity
Summary 2 Speculated Merger and Acquisition Activity 2007-2008
MARKET BACKGROUND
LEGISLATION
TAXATION AND DUTY LEVIES
Table 1 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 2 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 2008
Table 3 Selling Margin of a Typical Domestically Produced Beer Brand 2008
Table 4 Selling Margin of a Typical Domestically Produced Wine Brand 2008
Table 5 Selling Margin of a Typical Imported Spirits Brand 2008
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 6 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 7 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 8 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 9 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 11 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 12 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 14 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 15 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 16 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 17 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 18 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 19 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 20 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 21 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
DEFINITIONS
Sources
Summary 3 Research Sources
LOCAL COMPANY PROFILES - BULGARIA
BELVEDERE BULGARIA - ALCOHOLIC DRINKS - BULGARIA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Belvedere Bulgaria: Key Facts
Summary 5 Belvedere Bulgaria: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 6 Belvedere Bulgaria: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 7 Belvedere Bulgaria: Competitive Position 2007
BOLIARKA VT AD - ALCOHOLIC DRINKS - BULGARIA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 Boliarka VT AD: Key Facts
Summary 9 Boliarka VT AD: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 10 Boliarka VT AD: Competitive Position 2007
LOMSKO PIVO AD - ALCOHOLIC DRINKS - BULGARIA
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Lomsko Pivo AD: Key Facts
Summary 12 Lomsko Pivo AD: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 13 Lomsko Pivo AD: Competitive Position 2007
SIS INDUSTRIES OOD - ALCOHOLIC DRINKS - BULGARIA
STRATEGIC DIRECTION
KEY FACTS
Summary 14 SIS Industries Ltd: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 15 SIS Industries Ltd: Competitive Position 2007
VINPROM PESHTERA AD - ALCOHOLIC DRINKS - BULGARIA
STRATEGIC DIRECTION
KEY FACTS
Summary 16 Vinprom Peshtera AD: Key Facts
Summary 17 Vinprom Peshtera AD: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 18 Vinprom Peshtera AD: Competitive Position 2007
BEER IN BULGARIA
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager Price Band Methodology
Summary 19 Lager by Price Band 2008
Published Data Comparisons
SECTOR DATA
Table 22 Sales of Beer by Subsector: Total Volume 2003-2008
Table 23 Sales of Beer by Subsector: Total Value 2003-2008
Table 24 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 25 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 26 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 27 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 28 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 29 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 30 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 31 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 32 Beer Exports by Country of Destination: Total Value 2002-2007
Table 33 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 34 Beer Imports by Country of Origin: Total Value 2002-2007
Table 35 Company Shares of Beer by National Brand Owner 2003-2007
Table 36 Company Shares of Beer by Global Brand Owner 2003-2007
Table 37 Brand Shares of Beer 2004-2007
Table 38 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 39 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 40 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 41 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013