Beer in Ukraine
Euromonitor International's Beer in Ukraine 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: Mar 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
In 2008 beer packaged in PET is among Ukrainians’ favourites, which reveals the fact that consumers remain price-sensitive. Its share continues to strengthen to comprise 42% of sales which is very close to the 52% covered by beer in glass bottles, according to Nielsen's findings. Glass packaging continues to be passed over in favour of PET and canned beer.
Beer sales maintain positive growth rates over 2008, up by 13% in total volume terms on 2007. Beer enjoys success with customers on the wave of the consumer shift to alcoholic drinks with lower alcohol content. Importantly, beer popularity is boosted by aggressive advertising on TV since it has no restrictions, unlike other alcoholic drinks varieties. However, in spite of dynamics, sales growth in 2008 is lower than the review period CAGR of 16%. It is explained by the eventual saturation trends observed in beer in Ukraine overall with per capita consumption eventually approaching Western European markets standards.
In 2008 more interest was paid both on the consumer and manufacturer side to low/non-alcohol beer. The subsector proves the most dynamic in beer (+19% in volume terms over 2008) although its total volume sales are low still, at 83 million litres. The subsector has benefited from local manufacturers launching low-alcohol varieties (e.g. Chernigivske). Also, cans were introduced into low-alcohol beer, adding to the appeal of the product through a wider packaging range. Sales of non-alcohol varieties are negligible; still being represented by expensive imported brands. Health-conscious Ukrainians and drivers are key consumers of low/non-alcohol beer in the country.
Unit price of beer rose over 2008, up by 14% on the previous year. Among the key factors behind its growth are rising prices of energy and raw materials. Higher energy prices (the effect of global energy trends) led to increased production and distribution costs of beer. Grain prices are also on the rise, in turn affecting beer costs. Hence, manufacturer profitability of beer production is just 8% compared to 15% some years ago, according to Ukrpyvo. The burden of pricing is laid on consumers since companies are reluctant to lose any more of their profits.
Lager is by far the largest beer subsector in Ukraine. In 2008 its total sales volume comprises 2.8 billion litres. Within lager, standard lager dominates in volume terms with premium and economy lager having a more limited presence (768 and 502 million litres with each respectively). While economy beer is still appealing to low-income customers, more and more Ukrainians give preference to standard and premium beer. Premium beer is especially successful with the contribution of licensed beer which is currently booming in the country after breweries started to produce international brands in the country (e.g. Tuborg, Carlsberg, and Foster’s).
Dark beer and stout are less popular in Ukraine, accounting for just 246 and 44 million litres respectively. Such beer has a bitter taste which means its consumer base is smaller compared to lager (e.g. women are not enthusiastic about the bitter taste of beer). In addition, stout suffers from a limited product range. Usually only one or two stout brands can be found in small grocery outlets, if any.
At the end of the review period, 75% of beer sold in Ukraine is distributed via off-trade outlets. Beer is characterised by impulse consumption during the summer (in contrast to winter when less beer is consumed). Ukrainians frequently drink beer in parks and other public places, especially in cities in the evenings or during weekends. Drinking beer at home is also popular. The culture of eating out just started to take off in Ukraine which will boost sales of beer in the on-trade.
In Ukraine, the typical alcohol content of lager is 4-5.5%. The upper range is above 5.5% which is common in strong beers. Lower alcohol content in lager is not so common – there are a limited number of lager varieties that have 2.6-3.8% alcohol content. In dark beer, 5-5.6% abv is the standard range with 3.8% and 6.3% less common. Standard stout is stronger compared to lager and dark beer – 7-8.5% with other alcohol content varieties being rather exceptional. No clear movements in dark beer and stout are observed.
European trends are eventually reaching Ukraine which is evident in the emergence and growth of canned beer. Nielsen suggests that the share of canned beer rose to 6.2% in 2007 from 4.5% in 2006, while Can-Pack OOO which specialises in can production believes that canned beer comprises 8% while beer players estimate it at 5-5.5%. The still low share of canned beer is explained by its higher prices compared with its counterparts packed in glass and PET, as well as the consumer perception that canned beer is of inferior quality. Market players are attempting to shape a different attitude through advertising campaigns, including on TV.
Production, Imports and Exports
In 2007 beer production continued its upswing in Ukraine, from 2,673 million litres in 2006 to 3,156 million litres at the end of the review period. Ukrainian manufacturers increase their production volumes of the drink to satisfy consumer demand for beer, paying particular attention to developing the segment of licensed beer which is currently booming in the country.
Compared to production volumes, imported beer’s presence is much weaker in Ukraine. It diminishes on an annual basis, from 13 million litres in 2006 to eight million litres in 2007 which is a significant drop compared to the 32 million litres recorded in 2003. The largest supplier of foreign beer is traditionally Russia (six million litres in 2007 from a total eight million litres volume). Establishing foreign beer's production under license in Ukraine (e.g. Tuborg, Holsten, Carlsberg) explains the dropping consumer demand for imported beer.
In contrast, Ukrainian brewers are increasingly active in penetrating foreign markets. In 2007 export volumes of the drink amounted to 318 million litres compared to 281 million litres exported in 2006, and nearly doubling from 2003. The main consumers of Ukrainian beer are traditionally CIS countries of Russia, Moldova, Belarus, Georgia and Armenia with the bulk of sales falling to Russia (253 million litres in 2007).
Lager by origin sales are characterised by dominance of domestically produced beer. Import volumes are low – just 8.35 million litres imported in 2007. At that, imported beer is declining, from 33 million litres in 2005 to less than 13 million litres in 2006. Less beer is imported since beer manufacturers in Ukraine launched foreign beer brands, such as Foster’s, Carlsberg and Holsten.
Apparent consumption of beer suggested by official production, import and export data discussed above comprises almost 2,847 million litres in 2007. Euromonitor International market size data is lower than that since institutional sales and beer consumed during promotional campaigns or similar events fall out of the scope of the research.
Table of contents
ALCOHOLIC DRINKS IN UKRAINE : MARKET INSIGHT
EXECUTIVE SUMMARY
Alcoholic drinks accelerates boosted by premium varieties’ expansion
Rising costs lead to manufacturer losses and growth in AD prices
Domestically produced alcoholic drinks the most competitive
Retail operators account for the bulk of alcoholic drinks sales
Alcoholic drinks consumption has room for future growth
KEY TRENDS AND DEVELOPMENTS
Positive economic performance creates favourable conditions for AD
Alcoholic drinks rises in value
Trade balance of alcoholic drinks activates at the end of the review period
Tempting alcoholic drinks consumers
Specialist retailers
Market Merger and Acquisition Activity
Summary 1 Speculated Merger and Acquisition Activity 2007-2008
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 (%)
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 3 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 4 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 5 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 6 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 7 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 8 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 9 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 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 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 13 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 14 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 15 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 16 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 17 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 18 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
DEFINITIONS
Summary 2 Research Sources
LOCAL COMPANY PROFILES - UKRAINE
ARTEMIVSK ZSHV ZAT - ALCOHOLIC DRINKS - UKRAINE
STRATEGIC DIRECTION
KEY FACTS
Summary 3 Artemivsk ZShV ZAT : Key Facts
Summary 4 Artemivsk ZShV ZAT : Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 5 Artemivsk ZShV ZAT (Artyomovsk Winery): Production Statistics 2007
COMPETITIVE POSITIONING
Summary 6 Artemivsk ZShV ZAT (Artyomovsk Winery): Competitive Position 2007
KHORTYTSYA LGZ - ALCOHOLIC DRINKS - UKRAINE
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Khortytsya LGZ: Key Facts
Summary 8 Khortytsya LGZ: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 9 Khortytsya LGZ: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 10 Khortytsya LGZ: Competitive Position 2007
KOKTEBEL ZAVOD MAROCHNYKH VYN TA KONYAKIV ZAT - ALCOHOLIC DRINKS - UKRAINE
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Koktebel Zavod Marochnykh Vyn ta Konyakiv ZAT: Key Facts
Summary 12 Koktebel Zavod Marochnykh Vyn ta Konyakiv ZAT: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 13 Koktebel Zavod Marochnykh Vyn ta Konyakiv ZAT: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 14 Koktebel Zavod Marochnykh Vyn ta Konyakiv ZAT: Competitive Position 2007
SOYUZ-VICTAN TOV - ALCOHOLIC DRINKS - UKRAINE
STRATEGIC DIRECTION
KEY FACTS
Summary 15 Soyuz-Victan TOV: Key Facts
Summary 16 Soyuz-Victan TOV: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 17 Soyuz-Victan TOV: Production Statistics 10 months 2007
COMPETITIVE POSITIONING
Summary 18 Soyuz-Victan TOV: Competitive Position 2007
STOLYCHNY KYIVSKY ZSHV ZAT - ALCOHOLIC DRINKS - UKRAINE
STRATEGIC DIRECTION
KEY FACTS
Summary 19 Stolychny Kyivsky ZShV ZAT: Key Facts
Summary 20 Stolychny Kyivsky ZShV ZAT: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 21 Stolychny Kyivsky ZShV ZAT: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 22 Stolychny Kyivsky ZShV ZAT: Competitive Position 2007
BEER IN UKRAINE
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager price band methodology
Summary 23 Lager by Price Band 2008
Published data comparisons
SECTOR DATA
Table 19 Sales of Beer by Subsector: Total Volume 2003-2008
Table 20 Sales of Beer by Subsector: Total Value 2003-2008
Table 21 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 22 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 23 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 24 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 25 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 26 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 27 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 28 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 29 Beer Exports by Country of Destination: Total Value 2002-2007
Table 30 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 31 Beer Imports by Country of Origin: Total Value 2002-2007
Table 32 Company Shares of Beer by National Brand Owner 2003-2007
Table 33 Company Shares of Beer by Global Brand Owner 2003-2007
Table 34 Brand Shares of Beer 2004-2007
Table 35 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 36 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 37 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 38 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013