UK: Premium brands, innovation key in Eastern Europe, says SABMiller
SABMiller believes focusing on premium brands and innovation will be crucial in driving growth across Central and Eastern Europe as beer markets in the region begin to mature.
The London-listed brewer, which operates in six markets in Central and Eastern Europe, said today (4 April) that it expects its volumes on the continent to grow "in the mid-single digits" over the "next few years".
SABMiller Europe managing director Alan Clark said that as disposable income rose across the region so beer drinkers were turning towards premium brands, particularly in the on-trade.
He said: "We typically want to position ourselves across all segments but we are looking to make sure that our premium brands are healthy and try to shift consumers to the premium end over time."
Clark said that while international premium brands "created the excitement" in each market, SABMiller had moved to refresh its portfolio of what he called "local premium" brands. "We shouldn't forget that the major part of our volumes is today - and will be for some time - accounted for by local premium brands."
Clark said sales of Polish premium brand Zubr and Russian brew Zolotaya Bochka had risen after they were relaunched in their respective markets. "What may not appear as revolutionary changes can have a significant impact in our fortunes in any particular market," he added.
In terms of innovation, Clark said that the multinational brewers had become aware that different products would add "greater value" to the beer category. He pointed to SABMiller's decision to market Redd's, a fruit-flavoured beer, at female consumers in Poland and Russia and its move to create a string beer category in Romania as evidence of its record of innovation.
Clark also held up SABMiller's work at relaunching flagship international brand Peroni Nastro Azzuro as a way of "repositioning the beer category". SABMiller moved last year to link the brand with consumers' perception of Italy as the home of style - and, according to Clark, the relaunch had worked.
"Style is not something that is automatically linked to beer but it gives us a point of difference with that product. In the UK, (Peroni Nastro Azzuro's) volume growth has been very pleasing. We're not talking enormous volumes at this stage but it's been great."
Europe accounts for 19% of SABMiller's beer volumes and 18% of revenues, with leadership positions in Poland, the Czech Republic and Slovakia. The company is the number two brewer in Hungary and Romania and holds the number six position in Russia. SABMiller also owns breweries in Italy and the Canary Islands.
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