Strong performance in the developing markets, particularly Eastern Europe, looks set to drive growth in global beer sales in the four-year forecast period to 2007, according to a recent global report produced by Euromonitor.
With improving economic conditions, the emergence of political stability and low capita consumption of beer, new Euromonitor research shows that the developing markets, which will also include Asia-Pacific, are to be the main drivers of growth in global beer sales in the subsequent four years.
The survey reveals that Eastern Europe is forecast to record a volume compound annual growth (CAGR) of 6 per cent over the period 2003 to 2007. Asia Pacific, meanwhile, is expected to achieve a volume CAGR of 5 per cent.
Eastern Europe offers best potential
In Eastern Europe, the report predicts that 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.
In Asia-Pacific, Euromonitor says that 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, particularly those of Western Europe and the US, 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.
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.
Opportunities for niche growth
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 the report adds, 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.