RESEARCH: Beer driven by developing markets
A survey by the industry analyst Euromonitor predicts that Eastern will record a volume compound annual growth (CAGR) of 6% over the period 2003 to 2007. Asia Pacific, meanwhile, is expected to achieve a volume CAGR of 5%.
The growth will be driven, the report says, by improving economic conditions, the emergence of political stability and current low capita consumption of beer.
In Eastern Europe, growth will primarily be led by the development of the emerging beer markets of Russia and Ukraine.
"With low per capita consumption and increasing disposable incomes, these markets look set to see strong growth, especially as international breweries target the region. Growth in both markets is likely to be volume-led, with economy brands expected to remain important for some time forcing value growth to lag," Euromonitor said.
In Asia-Pacific, growth will similarly stem from the least developed markets in the region, notably Thailand, India, Indonesia, Vietnam and China. This will occur in line with economic growth and external investment from international brewers keen to seek out growth markets in an increasingly competitive marketplace.
Developed markets slow
Despite the positive prognosis of the developing markets, opportunities in developed markets are less clear. Maturity and concentrated markets mean that there is little potential for driving up volume sales, and new products must be accurately marketed in order to succeed, the report suggested.
Furthermore, the consumption trend is broadly down, as the populace cuts down on binge drinking either through health awareness or through encouragement by goverments amid growing concern over drink abuse. Consumers are also seeking social alternatives to drinking in bars and pubs, and demand is further dampened by switches to wine or soft drinks on occasion.
However, the forecast for the developed markets is not all negative. The data reveals that there are clear trends towards trading up to premium beers. This trend is expected to continue in the short to medium term. Even in more depressed economic circumstances, the relative low cost of a premium beer combined with an expected onslaught of marketing and promotional activity in an increasingly competitive marketplace is likely to retain this trend.
Growth is particularly likely in niche areas, as consumers seek out new varieties of beer with which to experiment. The form this trend will take will vary from market to market as consumers move away from their own traditional beers to sample alternatives from other countries. Growth is therefore expected in areas such as wheat beers, abbey beers, ales and premium imported lagers.
Sectors: Beer & cider
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