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Baltika, the leader of the Russian beer market, increased sales and made a considerable contribution to the well-being of the whole community

In 2018, the Russian beer market grew for the first time since 2007. The market growth was an estimated 3%, supported by favourable weather in Q2 and the World Cup impact in Q3.

Baltika Breweries volumes grew organically by 2%. This growth is due both to the market's upward trend and the successful implementation of the company's commercial initiatives. The dynamics of operating profit were also positive owing to the company's focus on managing the profitability of its channels and popular national brands, to its being always on the lookout for new opportunities in order to improve the efficiency of its supply chain, to its introducing a culture of operational costs management, and to its persistent efforts aimed at the optimization of its trade working capital.

For the reporting period, Baltika once again proved to be a leader of the brewing industry, as the company holds over 30%* of the Russian beer market. In 2018 Baltika continued to focus on development of the key brands and priority segments and sustained high level of marketing activities.

Baltika Breweries has the strongest brands portfolio in the Russian beer market – 5 company’s brands are among TOP-10 Russia beer brands. Among them are Baltika 7, Baltika 3, Zatecky Gus, Carlsberg and Zhigulevskoye.

In 2018 the key alcoholic variety in Baltika umbrella brand – Batika 7 – showed positive dynamics (its market share has grown by 0.2 p.p.* and sales volumes have grown by 16%**). Carlsberg (market share growth of 0.1 p.p.*) and Baltika 9 continued to hold their strong market positions. Consumers positively appraised high quality of brands sold at affordable price: Arsenalnoye (its market share has grown by 0.5 p.p.*), Bolshaya Kruzhka (growth of market share by 0.4 p.p*) and Zhigulevskoye (market share has grown by 0.9 p.p*)

Amid a slight increase in the market of alcoholic beer, the segment of non-alcoholic beer in Russia continues to grow actively. This beverage is increasingly recognized by Russian consumers, which makes it reasonable to expect a further increase in its sales. Baltika Breweries holds over 50% * of the alcohol-free beer market segment. In 2018, the company's sales of alcohol-free brands have increased by 38%**. The sales of Baltika 0,  the absolute leader in the alcohol-free beer market, have grown by 35%** due to a scale marketing and commercial support and successful launch of new alcohol-free variety “Baltika 0 Non-filtered Wheat”. Baltika 0 market share has grown by 0.2 p.p.*

Over the past year, there has been a positive trend in the market of crafts and specialty beers. Development of sales in this growing market segment is one of the key priorities of the Carlsberg Group’s strategy SAIL’22. Within this priority Baltika started to import three varieties of the famous American craft beer - Brooklyn Lager, Brooklyn East IPA and Brooklyn Naranjito. The market shares of super premium Kronenbourg 1663 and Set&Riley’s GARAGE increased by 0.1 p.p* each. The growth in sales of the company's brands belonging to the segment of craft and specialties totalled 22%**.

Besides, within the framework of SAIL’22, Baltika Breweries continued to develop non-alcoholic beverages portfolio. FLASH UP confidently holds its position in the growing fast (+34%* in 2018) non-alco energy drinks category with the market share of 21%*.

The ongoing channel shift towards modern trade and the growth of DIOT (draught in off-trade) in 2018 reinforced Baltika’s focus on growing in these channels.

Baltika Breweries retains its presence in more than 75 countries globally, in 43 of which it is the sole Russian beer exporter. The export operations of the company continue to demonstrate a stable upward trend, as well. Thus, in 12 months of 2018, the Baltika's export volume grew by 25% as compared to the same period of the previous year.

In 2018, the company's cumulative investment in the business development totalled 3.5 billion rubles. The company's sustainable development in the field of environmental protection and the development of sales in the growing channels and segments have become its priority areas for investment.

Throughout 2018, Baltika provided decent workplaces for more than 9,200 employees across the country. The company paid taxes on time and in full. Thus, the total amount of tax liabilities to the budget of the Russian Federation amounted to 61.5 billion rubles. Baltika Breweries proceeded with the implementation of its sustainable development program "Together towards Zero", in particular, it invested in the development of the "Benefit Your City" project aimed at developing a system for separate collection and recycling of waste. The amount of funds donated by Baltika to charities has grown by more than 40%.

Jacek Pastuszka, President of Baltika Breweries, Carlsberg Group EVP for Eastern Europe: 'In 2018, Baltika delivered a strong set of results characteristic of the industry leader. In accordance with the plans we have set, we have increased the sales volumes and operating profit, as well as price\mix. This empowered us to invest in the development of our strong brand portfolio and make a worthy contribution to the social well-being. The year 2018 proved to be another step up in building constructive interaction between the business and the government. In our opinion, the time has come for an integrated approach in gauging the implementation and the actual impact of the current legislation on the industry. We are eager to suggest our own ideas aimed at improving the regulatory and legal framework. This will enable the Baltika business and other market players to develop successfully in the future and benefit the whole community.'

The upshot of the company's social and economic activities in 2018 shows that Baltika Breweries is the undisputed leader of the Russian market and the flagship of the industry business elite. The company's purpose, the optimal management of business processes, the complex of economic and social projects being implemented, the confident deployment of innovations, investments into the business development, the high level of employee involvement - all this ensures a solid leading position and stable dynamic development of the leading company in Russia.

***

Contact

Please address enquiries to:
Tatiana Antonchik
Senior Director Corporate Communications
+7-963-303-01-63
antonchik@baltika.com

 

* Global Company-meter Nielsen retail audit, Urban & Rural Russia
** Internal company data, Russia

Baltika Breweries, the leader of the Russian beer market, presents its 2018 results