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The beer market and ways of its promotion

Recently, downturn trend in the domestic beer market is protracting more and more. Sales have fallen by 6% during the first half, despite a fairly good growth in the economy as a whole. This is due to increased prices, thanks to the rise and growth of the excise rate up to 200% to 9 rubbles for litter of beer. In the latest issue of the magazine “Food Promotion. Prod&Prod” in the article “The Beery perspective” climbs one of the most pressing today’s issue - the decline in sales and key ways to promote at the beer market.

In anticipation of the intended increasing of taxes in late 2009 year the index numbers of shipments to distributors had advanced significantly, that affected the performance-breweries immediately. As a result, the production of beer decreased by 21,7% in the first quarter of 2010 year, and in money terms - by 28%. As a consequence, the market narrowing took place and production index toward to the previous year drop by 5,9%. The prospects did not look too bright. In the nearest future there will be a hearing about the amendments to the law “On regulations of the alcoholic beverages”. Most probably, in the first place it will touch the beer – all kinds of taboos, associated with strong alcohol, will now apply to the beer also. This situation has had a negative impact on investments in to the beer industry. Even long-established companies do not see much point in further development of their beer assets. Not too favourable situation of the recent years’ market has forced the major players to take some measures. According to the author of the article, the main strategy of brewing companies is to develop a full range of their brands with a large bias toward the premium and the ground segment. While some players have strengthened activity in the economy segment. Despite the fact that a few large multinational companies have reduced their participation at the Russian beer market, its lion’s share is being still concentrated in the hands of five powerful overseas giants belonging to the Scandinavian brewery concern Baltic Beverages Holding (BBH): Sun Interbrew, Heineken, Efes Beverage Group, SABMiller. Another more or less the major market participant is the domestic manufacturer “Ochakovo”, which in addition to the factory in Moscow, owns several branches in the regions. As to the non-standard beer, “Baltic” and SABMiller are leading here.

Not too favourable situation of the recent years’ market forced the major players to take some measures.Thus, in 2010 year “Baltic” placed its stake on more marginal brands. InBev’s management personnel decided to invest in support of its key brands, in particular, to increase significantly the number of television commercials. The Heineken Company tried to stop a loss of its market share due to increasing activity in the economy segment. As to the Efes company, its current success at the Russian beer market is largely due to a strong financial support of location during the crisis. In particular, these are the increased marketing costs.

The main methods of promotion, what are they? It’s no a secret that the beer is the product of an impulsive demand, that is why it is so difficult to promote. The most popular method was and remains an emotional advertising, based on jokes and funny stories. Or it can be an original idea of the product’s presenting. Another effective method is the emphasis on the production of beer made ​​from natural ingredients. In any case, the same idea is traced throughout all methods of promotion: that the beer – is a beverage that, above all, brings the positive emotions and good mood.

The editors would be grateful if the major players of the industry would express their views on this subject in the pages of “Food Promotion. Prod & Prod” on the magazine’s site.