Baltika Breweries, part of the Carlsberg Group, announces its 9 months performance

november 11, 2015

According to the company's estimates, due to a difficult macroeconomic situation in the country the Russian beer market dropped by 11% in Q3 2015 in comparison to the same period last year. Over 9 months of 2015, the beer market declined by 10 %.

The overall economic situation adversely affected the beer market development. High consumer price inflation continued to reduce the population's purchasing power and consumer demand for beer. The consumers are trying to save on non-essential goods.

At the same time, the discussion of the initiatives which can have a further negative impact on the brewing industry such as, for example, prohibition or extreme restriction on PET packaging for beer does not stop in the government authorities.

The company's primary shipments declined by 18 % year-to-date on account of continued inventory reduction among our distributors due to ongoing rapid channel shift from traditional trade to modern trade, and due to market share loss, especially during the summer.

Baltika’s volume market share amounted to 35.1 %*  over 9 months of 2015. The market share loss was predominantly caused by our price leadership during the summer. The company’s value share was 36 %*.

Despite a negative trend of the beer market development, Baltika Breweries continued to invest in brand development in Q3 2015.

The summer season was rich in traditional festivals and celebrations. For example, 90 thousand Muscovites and guests of the capital attended the festival of German traditions DAS FEST in August in VDNH. Vladivostok picked up the torch, where 25 thousand guests enjoyed the jubilee, the 10th festival "DVigai na Prostor" (Go to an Open Space), which is traditionally held with support of the DV brand. The festival movement continued in Rostov-on-Don, where with the support of the Don brand the DONfest annual city barbecue festival took place.

The most unusual festival PRESENT PERFECT took place with the support of Neon Beer on August 1 in Saint Petersburg in the Street Art Museum.

The company invested in development of Russian sports. The regional brand coming from St.Petersburg called Nevskoe became an official partner of the SKA hockey club in the 2015/16 season. Baltika 0 non-alcoholic beer supported the Russian Triathlon Cup Final and the Russian Triathlon Federation Cup Final, which for the first time took place in Saint Petersburg in the framework of the beginning of A1 TRIATHLON.

Eight varieties of Baltika Breweries’ beers Company received various awards at the prestigious contest International Beer Challenge 2015. The following 3 varieties won "Gold": Baltika 4 Originalnoe, Baltika 8 Pshenichnoe, and Baltika Munchen.

The company is still paying attention to development of beer culture and social responsibility. Traditional lectures as part of educational project Beer Sommelier took place in Q3 2015 in Moscow, Yaroslavl, Krasnodar, Tula, Novosibirsk. On September 18, the company joined the global initiative of Global Beer Responsibility Day, which united 62 countries, 120 Russian cities, and more than 60 million people.

Jacek Pastuszka, president of Baltika Breweries, senior vice-president of Carlsberg Group in Eastern Europe, "Beer has lost more than a third in volume over the last 5–6 years. Government regulation, fast growth of excise taxes and as a consequence growth of prices, unfavorable macroeconomic trends became the key drop drivers. In Q3 2015, the brewing industry as well as Baltika continued to struggle against negative trends intensified by the crisis. We strive to adapt the company structure and organization of processes to the volatile economic situation and mitigate the negative trend of the beer market development. We are looking for solutions which will allow us to protect profitability of our business and increase efficiency, focusing on development of premium brands."

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*Source: Nielsen Retail Audit, Urban & Rural Russia.

Baltika Breweries, part the of Carlsberg Group, is one of the largest Russian producers of consumer goods since 1996, is No. 1 in the Russian beer market. 8 plants in Russia and a broad portfolio of brands belong to Baltika. The company is a significant part of Carlsberg Group and its region Eastern Europe, which includes Azerbaijan, Belarus, Kazakhstan, Ukraine, and Uzbekistan. Baltika Breweries is a leading exporter of the Russian beer: Baltika products are represented in more than 75 countries worldwide, the share of the company accounts for 67 percent of all the export supplies of Russian beer.


 

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