Beer in Bulgaria

TRENDS

After increasing strongly earlier in the review period (2006-2012), total volume sales of beer declined for two consecutive years in 2009 and 2010 due to the impact of the economic downturn and the sharp drop in consumer spending on alcoholic drinks both on-trade and off-trade. In 2011 the sales of beer in the country managed to record a positive growth, mainly due to the good summer season and the increased number of tourists in the seaside resorts. The beer producers, however, expect that the sales will manage to recover to their pre-crisis levels only around 2014.

Domestic premium lager continued to record good volume growth throughout the whole review period, despite the economic crisis, and was the fastest-growing category in 2011 at 5%. The strong performance came from the positive development of premium brands such as Shumensko Premium and Amstel. Sales of dark lagers are also pushing the category development upwards. Dark lager brands, however, remain seasonal and are only sold in the autumn and winter.

In conditions of growing economic and employment insecurity, domestic consumers (differing from the tourists visiting the country) continued to limit their beer purchases, and domestic standard lagers recorded negative volume growth in 2011. Partially this was as a result of the purchase of smaller PET bottles.

On-trade sales increased to 33% of total volume sales in 2011, with this increase encouraged by the good weather in the summer and the increased number of tourists on the Black Sea side. On-trade establishments are good channels for the sale of tap lager in the premium and standard segments.

The importance of off-trade sales remained strong in 2011, reaching a 67% share of volume sales of beer. As people preferred to spend more time at home, rather than going out, 1-litre and larger PET bottles proved to be a convenient and economical alternative for home entertainment.

In terms of alcohol content, there has been a trend towards reducing the alcohol content of economy and standard beer to 4%. It is mainly premium beers and especially dark lagers which still command alcohol content of 5% and above.

PROSPECTS

Despite the dramatic slowdown in volume growth in the review period, caused by the economic downturn, the prospects for beer are much brighter than for the other categories in the alcoholic drinks industry. Beer is expected to increase by a volume CAGR (compound annual growth rate) of 4% in the forecast period (2012-2016), but growth will be more pronounced in the second half of the forecast period, as the economy regains its momentum. Investments in quality and advertising and the favorable pricing of the beer companies are expected to continue to fuel growth. The beer category will indeed steal growth from wine and spirits, which are losing out due to increasing prices.

Despite projections of a volume slowdown, per capita consumption is expected to increase by 11 litres and reach 78 litres in 2016. Consumption is expected to rise, as per capita consumption is still below that of Central European beer-drinking countries.

The constant value CAGR is expected to exceed that of the review period, and decline by 4% (compared to 11% in the review period). Domestic premium lager is expected to continue to grow, and demonstrate a 4% CAGR in volume terms in the forecast period. Whilst standard and economy lager have their loyal followers, these categories are more developed than premium lager, and are not expected to demonstrate such intensive development. Also, the desire of Bulgarians to adopt Western lifestyles and brands, plus advertising support, will continue to boost the popularity of domestic premium lager.

Beer in Romania

TRENDS

After increasing strongly earlier in the review period (2006-2012), beer total volume sales declined for a third consecutive year in 2011 due to the impact of the economic downturn and the austerity measures taken by the government in order to reduce the budget deficit and consequent drop in consumer disposable incomes. In addition, the area was unable to sustain the high growth recorded in earlier years of the review period due to the fact that per capita beer consumption in Romania in 2008 was already among the top ten highest rates in the world – a fact which is surprising when considering that Romania is a traditional wine producer.

Dark beer recorded a slightly larger decline in sales than lager and low and non-alcohol beer in 2011. The fact that dark beer’s premium and super-premium positioning appeals almost exclusively to high-income consumers means that the area has consequently been less affected by the crisis and a growing number of brands in this area are becoming available within supermarkets and hypermarkets.

Standard lager led beer sales in 2011, with standard brands performing well both off-trade and on-trade and the area continuing to benefit from strong investment from multinationals. Indeed, the three leading beer brands in 2011 were all standard offerings. In fact, standard beer looks set to perform well over the coming years as manufacturers look to re-position popular economy brands like Burger, Ciucas and Albacher as low-end standard beers. On the other hand, economy lager was the most dynamic area in volume terms in 2011 due to the impact of the decline on consumer purchasing power and the growing popularity of home consumption. Premium lager was the smallest area in 2011 and was also the most affected by the decline in consumer purchasing power. However, premium lagers continue to lead sales on-trade.

The majority of beer sales continued to be made off-trade in 2011, with many consumers opting to drink at home as a result of the economic downturn. The main trend within the off-trade channel was the on-going expansion of modern multinational retail chains – a development which is resulting in a significant change in consumer buying habits and in increased purchases of beer for home consumption.

PROSPECTS

Beer will suffer from the austerity measures introduced by the government and declining consumer purchasing power in the first years of the forecast period (2012-2016). However, the recovery will result in an improvement in consumer disposable incomes, with beer sales set to pick-up towards the end of the forecast period - especially within the premium segment. Standard lager will remain the largest area in both volume and value terms as consumers will continue to be attracted by the offering of quality and affordably priced brands.

Beer’s projected forecast period CAGR (compound annual growth rate) is higher than the review period average due to the fact that consumption of beer is only expected to reach saturation by the end of the forecast period, a situation which would appear to be normal in a country where production and consumption of wine is a firmly established tradition.

Stout and imported premium beer will be the most dynamic areas over the forecast period due to the fact that premium beer will be less affected by the impact of rising raw material prices as higher-income consumers, who focus more on quality than price, account for the majority of sales. The fact that stout and premium imports will continue to account for a significant proportion of on-trade sales over the forecast period will also help to boost volume sales. However, dark beer and flavoured beer will remain niche areas, with consumption remaining occasional and limited to high-income consumers.

The economic recovery is expected to produce further consumer lifestyle changes, with the popularity of on-trade outlets and modern retailers set to increase over the coming years. As a result, on-trade and off-trade forecast period growth rates will be similar. On the other hand, the on-trade and off-trade channels will continue to focus on different beer areas, with on-trade growth expected to be fuelled by rising demand for stout, low/non-alcohol beer, dark beer and premium lager.

Beer in Croatia

TRENDS

The key trend within alcoholic drinks in 2011 was explosive growth within malt-based RTDs. The fact that all malt-based RTD launches were made by leading breweries helped to fuel interest in beer. In addition, the lack of major sporting events was off-set by the long and warm summer and a successful tourist season.

Beer sales in 2011 were much better than in 2009 and 2010. The fact that on-trade volume sales increased by 2% whilst off-trade volume sales grew by just 1% highlights the benefits of a good tourist season and favourable weather conditions. Current value sales were fuelled by the 4% increase in on-trade prices, with off-trade prices remaining relatively stable.

Within beer, dark beer and stout led growth in 2011, mostly due to rising on-trade sales. There was a shift towards premium beer brands during the year due to rising consumer disposable incomes.

Standard lager continues to dominate beer in Croatia, accounting for 76% of off-trade volume sales and 68% of on-trade volume sales in 2011. Premium lager was the second largest area in 2011, accounting for 11% of off-trade volume sales and 16% of on-trade volume sales. Economy lager was the smallest area, accounting for 11% of off-trade volume sales and 9% of on-trade volume sales.

Some 64% of beer total volume sales were made off-trade in 2011. However, only 40% of total value sales were made off-trade. Overall, the share of sales made on-trade is rising.

While beer does not directly compete with soft drinks, recent launches of flavoured beer with a 60% juice content represent a threat to non-alcoholic drinks sales, especially during summer months.

PROSPECTS

Beer will enjoy good and healthy growth over the forecast period (2012-2016), with the area having a projected CAGR (compound annual growth rate) of 1% in total volume terms and 2% in constant total value terms. Growth over the coming years will be fuelled by competition between the three leading players, which will use all possible resources in order to promote their brands, with product taste and quality only playing a minor role in attracting consumers.

The ascension of Croatia to the EU in July 2013 may impact on-trade prices in the country. If prices increase abruptly, volume sales could be negatively affected.

Imported premium lager will lead growth over the next five years, with the area having a projected CAGR (compound annual growth rate) of 4% in both total volume and total constant value terms. Whilst sales within the area remain marginal, there is excellent potential for growth as the premiumisation trend picks-up again.

Beer average total constant value prices will increase at an average annual rate of under 1% over the forecast period. The fact that consumers still prefer standard-priced brands means that there is not much scope for price increases via new product launches.

After the initial threat of the smoking ban, when considerable problems were expected for the HoReCa channel, it seems that the first obstacles have been surpassed and that there will be no significant difference between on-trade and off-trade channel trends over the forecast period.

Euromonitor International