Beer in Poland
Euromonitor International's Beer in Poland 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: 61 | Publication date: Jan 2009
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- 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
The pace of growth of beer sales slowed down to 3% after an outstanding year in 2007, when volume sales increased by more than 9% again. For one thing, the per capita consumption of beer has moved closer to saturation point. For another, the jump in prices resulting from growing prices of raw materials such as barley and hops as well as increasing pressure in terms of personnel costs tempered demand for beer. What is more, weather conditions, with a relatively mild summer with temperatures lower than the average over the last 10 years, did not provide any impetus for faster increases in sales. Finally, the competition for sales share continued to intensify. Concerns about the impact of the financial crisis on consumers’ budgets helped reduce demand for beer as well.
The 2008 percentage volume sales increase was slower than the average annual rate of growth in the review period as a whole. The per capita consumption of beer was 95 litres in Poland in 2008. This means that space for growth is limited. Poland is the 10th biggest beer market in the world, and the fifth largest in Europe. The per capita consumption of beer in Poland outstripped the per capita consumption of beer in Eastern Europe as a whole, which was 81 litres in 2008. Growing prices made beer less attractive in comparison to spirits or wine. Generally, a decrease in prices of beer was one of the reasons for the bonanza enjoyed by beer manufacturers over the review period.
Imported premium lager enjoyed the biggest increase in sales on the previous year in 2008. Growing disposable incomes coupled with increasing aspirations resulted in soaring demand for imported premium lager. Polish drinkers are thirsty for beer of a higher quality. For example, Grupa Zywiec decided to start to manufacture the Desperados beer brand in Poland. Lower prices and greater availability resulted in skyrocketing sales in the first half of 2008. New, imported beers appeared on the shelves of premium-positioned retail chains such as Alma Market, Bomi, Piotr i Pawel or Stokrotka Premium. Expansion of premium retail chains was also the force working for an increase in sales of imported premium lager.
Increasing aluminium prices, higher barley, hops and malt costs as well as rising salaries put pressure on manufacturers. The rise in prices of aluminium seriously impacted prices of beer since cans enjoy surprisingly high levels of popularity among Polish drinkers. In 2008, for the first time, cans were expected to outstrip bottles as the most popular packaging format for beer. According to the Association of Beer Producers, the pace of growth of sales of beer in cans increased by 60% over the 2005-2007 period and 36% in 2007. Beer manufacturers also faced shortages of glass bottles. Prices of malt increased by 65% over 2007. Domestic producers disposed of capacity that could meet 65% of domestic demand. Barley prices were also surging as farmers had been using growing areas for the production of biofuel. Farmers chose to grow canola instead of barley. Nevertheless, aluminium prices went down from US$1,400/lb to US$600/lb in November 2008. Simultaneously, the price for a kilogram of barley, which had reached PLN60 in the final months of 2007, had fallen to about PLN20 in November 2008.
The higher costs were partially passed on to consumers. In the first half of 2008, producers introduced higher prices for beer. Simultaneously, manufacturers declared a reduction in mark-ups.
Dark beer showed 2% growth in terms of volume, while stout witnessed a 4% increase in volume sales, and low/non-alcohol beer recorded nearly 4% growth. A section of Polish drinkers is tired of monotonous mainstream lagers and is seeking more sophisticated varieties of beer. This, in turn, translates into demand for dark beer and stout.
The key trend is premium driven. Growing aspirations of Polish drinkers are driving demand for premium-positioned beer. Brands such as Heineken, Carlsberg, Pilsner Urquell as well as Peroni Nastro Azzurro are gaining favour among Polish drinkers.
Independent food stores are still the main distribution channel for beer. However, discounters and supermarkets/hypermarkets are stealing share from traditional independent food stores. The growing number of discounters resulted in an increase in this channel’s share of sales in beer. The on-trade is still underdeveloped in Poland. High mark-ups together with the lethargic culture of going out are responsible for the low levels of popularity of on-trade establishments among Polish drinkers. However, manufacturers are making efforts to raise sales through the on-trade. They pay a lot of money for the exclusive rights to promote brands in consumer foodservice outlets, for example. However, the latter is for the most part dedicated to supporting the image of leading brands. For example, at the heart of the strategy of the Piwiarnie Wareckie chain of pubs, founded by the Polish branch of Heineken in 2006, was the support of the Warka brand. The Piwiarnie Wareckie chain successfully expanded, reaching over 60 establishments in the first half of 2008. Generally, beer is the most popular alcoholic drink within the on-trade, vastly outpacing spirits or wine. Lower mark-ups on beer in comparison to the at times absurdly high mark-ups on wine and spirits is one of the reasons behind the popularity of beer in the on-trade. However, the consumption of beer in kegs has been declining. According to the Association of Beer Producers, the share of kegs in total sales of beer decreased from 11% in 2004 to below 8% in the first half of 2008. According to a survey conducted by SABMiller in 2008, 91% of Poles choose the home as the place for drinking beer.
The typical content of lager is 5-6%. Generally, there is a shift towards beer with a lower alcohol content. However, lager with an alcohol content over 7% still enjoys enormous popularity in Poland compared to other European countries.
Cans are the most popular type of packaging for beer in Poland. The Polish market could be seen as an exceptional one, taking into account the most popular type of packaging. It is worth emphasising that 0.5-litre cans dominate within the Polish market, while 0.33-litre cans tend to lead across European markets. Plastic bottles could be an alternative to cans or glass bottles. Taking into account neighbouring countries, plastic bottles gained in popularity in Russia, in contrast they suffered from a very disappointing performance in Germany.
Production, Imports and Exports
Modern production facilities were behind the growth in production as beer heavyweights present in Poland invested heavily in production facilities. This resulted in lower production costs. However, trade analysts stress that most of the big breweries use a high gravity method to produce beer. This means that production is highly efficient, but translates into a slightly more insipid beer taste. What is more, natural ingredients are replaced with artificial ones. Some trade experts say that big breweries produce alcoholised water fuelled with artificial ingredients. The cost of beer production in small breweries is 10 times higher in comparison to the cost of manufacturing in large plants.
According to the Central Statistical Office, exports of beer reached 650,000 hectolitres in the first half of 2008. This represented growth of over 100,000 hectolitres on the corresponding period of the previous year. Kompania Piwowarska is the leader in export sales of beer. The export sales of Kompania Piwowarska accounted for over 322,000 hectolitres, up by 70% in comparison to the parallel period of the previous year. Tyskie and Lech are the key export brands. The main destination markets are: the US, Canada, the UK, Ireland, and Germany. The wave of Polish emigrants that reached the UK after Poland’s EU entry in 2004 was the main reason for exploding export sales of beer produced in Poland. Kompania Piwowarska, as the first player, launched products in retail chains in UK. For this reason, Kompania Piwowarska gained the first-mover advantage. Beers from the portfolio of Kompania Piwowarska are available among others in the following off- or on-trade chains: Wetherspoons, Enterprise, Laurel, Greene King, Thresher, Oddbins, Asda, Sainsbury’s, and Tesco as well as in independent food stores. Zywiec beer is the key exported product from the portfolio of Grupa Zywiec. The Zywiec brand was awarded with the category Brands to Watch within the UK’s Superbrands contest. What is more, national pub chain JD Wetherspoon began selling popular Polish beers Tyskie, Zywiec and Lech in bottles soon after the arrival of large groups of Polish migrants, following EU expansion. The beers are popular with Poles, of course, but also with the rest of the Wetherspoons customer base, who enjoy trying bottled beers from around the world. “The beers are well established, and will continue to be a part of the bottled beer range sold in our pubs, irrespective of whether there is a decline in the number of Poles in the UK,” according to the company. The diversification of the tastes of UK drinkers also contributed to growing demand for beer produced in Poland. This is particularly true, taking into account the fact that many UK citizens visited Poland after its EU entry and tried the domestic beers. In contrast, imports declined. Over the first half of 2008, import sales accounted for 113,000 hectolitres, whereas import sales had amounted to 130,000 hectolitres in the first half of 2007.
Domestically manufactured lager accounts for the predominant part of lager sales. Imported lager is not compatible with the purchasing power of Polish consumers. For this reason, multinationals such as Heineken and Carlsberg decided to produce the Heineken, Pilsner Urquell and Carlsberg brands in Poland over the review period. Since March 2008, the Desperados beer brand has also been manufactured in Poland. This resulted in lower costs and, consequently, in lower prices. As a result, sales of the Desperados brand soared over the first months of its wide availability in outlets in Poland.
Apparent consumption does not differ from the Euromonitor International market size data. Following new interpretations of definitions, malt-based RTDs is also included under beer.
Table of contents
ALCOHOLIC DRINKS IN POLAND : MARKET INSIGHT
EXECUTIVE SUMMARY
Alcohol drinks sales continued to grow in 2008
Polish consumers’ needs become more diversified and fragmented
Multinationals gaining in importance
Independent small grocers still the dominant retail channel
Despite the risk of a slowdown in the economy, prospects remain positive
KEY TRENDS AND DEVELOPMENTS
Domestic players and brands go global
Affordable luxury alcoholic drinks are in demand
More holistic approach to advertising is needed
Alcoholic drinks relatively resistant to the financial crisis
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 Beer Brand 2008
Table 4 Selling Margin of a Typical Wine Brand 2008
Table 5 Selling Margin of a Typical 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
Summary 3 Research Sources
LOCAL COMPANY PROFILES - POLAND
CENTRAL EUROPEAN DISTRIBUTION CORP (CEDC) - ALCOHOLIC DRINKS - POLAND
STRATEGIC DIRECTION
KEY FACTS
Summary 4 CEDC: Key Facts
Summary 5 CEDC: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 6 CEDC: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 7 CEDC: Competitive Position 2007
POLMOS LUBLIN SA - ALCOHOLIC DRINKS - POLAND
STRATEGIC DIRECTION
KEY FACTS
Summary 8 Polmos Lublin SA: Key Facts
Summary 9 Polmos Lublin SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 10 Polmos Lublin SA: Competitive Position 2007
SLASKA WYTWóRNIA WóDEK GATUNKOWYCH POLMOS SA - ALCOHOLIC DRINKS - POLAND
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Slaska Wytwórnia Wódek Gatunkowych POLMOS SA: Key Facts
Summary 12 Slaska Wytwórnia Wódek Gatunkowych POLMOS SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 13 Slaska Wytwórnia Wódek Gatunkowych POLMOS SA: Competitive Position 2007
SOBIESKI SP ZOO - ALCOHOLIC DRINKS - POLAND
STRATEGIC DIRECTION
KEY FACTS
Summary 14 Sobieski Sp zoo: Key Facts
Summary 15 Sobieski Sp zoo: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 16 Sobieski Sp zoo: Competitive Position 2007
TIM SA - ALCOHOLIC DRINKS - POLAND
STRATEGIC DIRECTION
KEY FACTS
Summary 17 Tim SA: Key Facts
Summary 18 Tim SA: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 19 Tim SA: Competitive Position 2007
BEER IN POLAND
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager price band methodology
Summary 20 Lager by Price Band 2008
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