Beer in Slovakia
Euromonitor International's Beer in Slovakia 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: 64 | 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 sales witnessed moderate and steady growth by 3% in volume terms what similar to previous two years. The popularity of beer rose in particular due to the better economic conditions in Slovak households but also due to the good long and relatively hot summer season, which has always traditionally been the most important period of the year in terms of beer sales. Value sales rose slightly faster than volume what was result of slightly rising unit price in 2008
Domestic standard lager remained the most popular beer product among Slovak consumers and also saw strong growth in 2008, up by 4% in volume and 5% in current value terms. Very intensive advertising had an important impact on this category’s development. Manufacturers promoted popular brands through various channels, including through outdoor advertisements and TV adverts. Domestic standard lager also saw new important innovations such as 5-litre kegs for home usage. Other important factors for growth were the good weather and the increasing purchasing power among local households. The quickening pace of lifestyles changed consumer behaviour, meaning that they were more open to purchasing light beers with a lower alcohol content, which are mostly to be found in standard lager.
The fastest-growing area was low-alcohol beer with growth of 6% in volume and 7% in current value terms recorded in 2008. Lifestyles in Slovakia have been changing – with more hours spent at work and a quickening pace of life. Low-alcohol beer offers a suitable substitute for alcoholic beer for those driving or working. This product area also still has room for further growth, which was highlighted in 2008 by the introduction of the new domestic brands, for example Urpiner Nealko by Banskobystrický Pivovar Urpiner, launched in February 2008. Up to now, a still significant share of the low-alcohol beers sold locally are imported, as not many domestic producers make these products.
The fact that the fastest growth was witnessed in domestic standard lager, low-alcohol beer and premium domestic beer was based on the same trends – economic development, changing consumer lifestyles and weather conditions during the main selling season (summer). Slovaks have higher income to spend, which is leading to rising spending. Another important influence has been the quickening pace of lifestyles, increasing numbers of cars and drivers and the increasing quality of the beer.
According to the Roman Šusták from the Association of Beer Producers in Slovakia (ABPS), unit prices in all beer categories rose at the beginning of the 2008 as the production costs increased quite significantly. Malt prices grew by 60-80% and hops by 100% in 2007. This led to rising prices; however, each manufacturer dealt with these increases differently. That is why unit price growth differed according to the manufacturer. They applied different strategies in order to overcome rising production costs. While some of them rationalised their production operations, others spent less on the marketing and promotion as the target group for beer continued to be lower middle class people and such consumers tend to be very price sensitive.
Dark beer witnessed growth in both volume and current value terms in 2008, albeit at levels below the overall averages for beer. Dark beer does not have high levels of popularity among Slovaks in comparison to other categories. Therefore production of dark beer only accounted for below 2% of total production in 2007, even less than low-alcohol beer. Dark beer is popular mostly among women. On the other hand, there is a lack of advertising of dark beer in comparison to lager or beers with a lower grade. The exception during 2008 was Heineken Slovensko, which advertised Zlaty Bazant Tmavy in the new small 0.33-litre bottle during March 2008 through outdoor advertisements such as billboards, but also through printed adverts in lifestyle magazines, on the internet etc.
According to ABPS director Roman Šusták, the main target group for beer producers is lower middle class consumers, who tend to purchase beer more often than better-educated middle class people. The incomes of this social group tend to point towards standard and economy brands, rather than premium brands. Last but not least, the reason for the great popularity of standard brands lies in the fact that standard brands have a lower grade (10° and 11°) than beer in higher grade (12°-16°). According to ABPS statistics, in 2007 10° grade beers accounted for almost 60% of total production, while 12° grade beers accounted for 25% of total Slovak beer output, and were experiencing a declining tendency.
On-trade beer sales are expected to gain better performance in coming years. Slovaks are increasingly spending time outside their homes – in restaurants, cafés, bars etc. Consequently, consumption of beer sold through the on-trade is rising. Moreover, drinking beer in bars and pubs has a long tradition in Slovakia – not only men and young people consider drinking beer as a “ritual”. Increasingly, women are also spending time outside their home, therefore breaking the stereotypes that beer drinking is only for men.
The most typical alcohol content of lager in Slovakia tends to be standard strength between 4.1% and 5%. These beers are usually graded as 10º - 11° in Slovakia. Mid-strength lagers usually have an alcohol content between 3.6% and 4%. Lagers are marked according to their grade between 12° and 16°. Low-alcohol beer has an average alcohol content of about 0.25% to 0.5%. Dark beers are usually standard or strong with alcohol content between 4.1% and 4.5%.
According to ABPS data, bottles were most popular in Slovakia. Beer packaged in bottles accounted for 50% of total beer production in 2007. Just behind was beer in kegs with a 41% share in 2007. Over the 2007-2008 period the popularity of canned beer continued to increase. Over the last five years the share of canned beer grew from 1% to 9%. Mostly due to the greater convenience of canned beer, its popularity rises over the summer time and during holidays. Consequently, several domestic producers launched new canned beers (Pivovary Topvar, Staropramen launched canned Stella Artois). The rest, including PET bottles, had a share of less than 1% of beer production in 2007. However, the 1.5-litre PET bottle, first introduced by Heineken Slovensko in 2007, maintained remarkable popularity in 2008 due to its price and convenience.
Production, Imports and Exports
Beer production in Slovakia has been witnessing a declining tendency. According to the official production data from the Slovak Statistical Office, output has declined since 2002. The year 2004 saw a dramatic fall as a result of the rising excise taxes and, consequently, unit prices. Since then production has continued to decline steadily. Production in 2007 was 368 million litres, which was slight growth in comparison to a year earlier. It is important to note that the recent decline in beer production was mostly due to rising licence production of domestic brands abroad. In other words, the statistical data have been strongly affected by the shifting of part of the domestic production abroad.
Exports of Slovak beer remain very low in comparison to years ago. While, in 2004, Slovakia exported 21.8 million of beer in 2004, exports in 2005 had declined to 9.9 million litres and only 3.8 million litres in 2006. In 2007, export increased slightly to 4.2 million litres. The massive decline (when compared to 2004) was caused by the increasing production under licence abroad of Slovak brands. Exports are more expensive than licensed production due to rising costs – the increasing prices of fuel, personnel costs etc. According to the Association of Beer Producers in Slovakia, this trend is going to continue over the coming years.
Imports of beer into Slovakia have been witnessing an increasing tendency since 2004. Imports of beer into Slovakia stood at 52 million litres in 2005, which rose to 65 million litres in 2006, and 76 million litres in 2007. Slovaks particularly demand Czech brands, which have a long tradition in Slovakia. This is the reason why the Czech Republic is the major beer importer to Slovakia. For example, Budejovicky Budvar, Pivovar Bernard or Pivovary Staropramen are seeing fast-growing demand on the Slovak market. An important share of beer imports is accounted for by low-alcohol beer, as not enough domestic brands are available. For this reason several new domestic brands of low-alcohol beer were launched over the last three years. To sum up, imported beer had a marginal position on the Slovak market, as Slovak consumers are still quite conservative and one of the reasons for weak sales is also the higher price of such products.
Official production statistics are close to Euromonitor International data, although small differences do exist. Consumption of beer per capita in 2007 was 82 litres, according to the Slovak Statistical Office. According to the Euromonitor International database, Slovaks consumed 98 litres per capita in 2007. The reason for this difference is that the Slovak Statistical Office uses different methodology for market sizes, which includes only exports, imports, production and stocks. Euromonitor International also includes real market parameters – sales in volume and value terms, according to published data by marketing agencies and data from manufacturers.
Table of contents
ALCOHOLIC DRINKS IN SLOVAKIA : MARKET INSIGHT
EXECUTIVE SUMMARY
Increasing consumption driven by rising incomes
Manufacturers focusing on premium varieties
Large shares held by international companies
Supermarkets/hypermarkets and independent food stores are the key distribution channels
Manufacturers to rely on tourism over the forecast period
KEY TRENDS AND DEVELOPMENTS
Dynamic economic growth the major driver
Demography as market driver
Changing lifestyles support the on-trade
Further shift towards premiumisation in 2008
Specialist Retailers
Summary 1 Leading Specialist Retailers 2007
Market Merger and Acquisition Activity
MARKET BACKGROUND
Legislation
TAXATION AND DUTY LEVIES
Summary 2 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 1 Typical Wholesaler and Retailer Off-trade Mark-ups in Selected Sectors 2008
Table 2 Selling Margin of a Typical Domestically Produced Beer Brand 2008
Table 3 Selling Margin of a Typical Wine Brand 2008
Table 4 Selling Margin of a Typical Imported Spirits Brand 2008
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 5 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 6 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 7 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 8 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 9 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 11 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 12 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 14 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 15 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 16 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 17 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 18 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 19 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 20 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
Definitions
Sources
Summary 3 Research Sources
LOCAL COMPANY PROFILES - SLOVAKIA
GAS FAMILIA SRO - ALCOHOLIC DRINKS - SLOVAKIA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 GAS Familia sro: Key Facts
Summary 5 GAS Familia sro: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 6 GAS Familia sro: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 7 GAS Familia sro: Competitive Position 2007
HEINEKEN SLOVENSKO - ALCOHOLIC DRINKS - SLOVAKIA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 Heineken Slovensko as: Key Facts
Summary 9 Heineken Slovensko as: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 10 Heineken Slovensko as: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 11 Heineken Slovensko as: Competitive Position 2007
ST NICOLAUS TRADE AS - ALCOHOLIC DRINKS - SLOVAKIA
STRATEGIC DIRECTION
KEY FACTS
Summary 12 St Nicolaus Trade as: Key Facts
Summary 13 St Nicolaus Trade as: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 14 St Nicolaus Trade as: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 15 St Nicolaus Trade as: Competitive Position 2007
VINO NITRA SPOL SRO - ALCOHOLIC DRINKS - SLOVAKIA
STRATEGIC DIRECTION
KEY FACTS
Summary 16 Vino Nitra spol sro: Key Facts
Summary 17 Vino Nitra spol sro: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 18 Vino Nitra spol sro: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 19 Vino Nitra spol sro: Competitive Position 2007
VITIS TRADE SRO - ALCOHOLIC DRINKS - SLOVAKIA
STRATEGIC DIRECTION
KEY FACTS
Summary 20 Vitis Trade sro: Key Facts
Summary 21 Vitis Pezinok sro: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 22 Vitis Trade sro: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 23 Vitis Pezinok sro: Competitive Position 2007
BEER IN SLOVAKIA
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager Price Band Methodology
Summary 24 Lager by Price Band 2008
SECTOR DATA
Table 21 Sales of Beer by Subsector: Total Volume 2003-2008
Table 22 Sales of Beer by Subsector: Total Value 2003-2008
Table 23 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 24 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 25 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 26 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 27 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 28 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 29 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 30 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 31 Beer Exports by Country of Destination: Total Value 2002-2007
Table 32 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 33 Beer Imports by Country of Origin: Total Value 2002-2007
Table 34 Company Shares of Beer by National Brand Owner 2003-2007
Table 35 Company Shares of Beer by Global Brand Owner 2003-2007
Table 36 Brand Shares of Beer 2004-2007
Table 37 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 38 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 39 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 40 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013