Market with the largest share in sales volume
Anadolu Efes commenced its Russian operations, which has the largest share in beer segment’s sales volume, with the start of production of Moscow-Efes Brewery (“MEB”) in 1999. The company further solidified its position in the market through the acquisition of Krasny Vostok Brewing Group, which was the 7th largest player in the market back in 2006 as well as through the strategic alliance with SABMiller in 2012.
Anadolu Efes carries on its operations with six breweries and four malt production facilities in Russia, which has an annual production capacity of 21.7 mhl of beer and 130 thousand tons of malt.
Two consecutive quarters of double-digit growth thanks to the projects and initiatives aimed at the Russian market
The contraction in Russia’s beer market, which stood above 25% in total, as a result of the effect of increasing legal regulations and excise taxes since 2010, was well below the expectations in 2016, giving positive signals for the upcoming period. In 2016, consumption in the Russia beer market is estimated to be around 80.0 mhl.
While at the beginning of 2016, the Russian market was expected to post a decrease parallel to the previous year, this expectation has been revised as a low-to-mid single digit contraction in the period. On the other hand, the expectation of Anadolu Efes to outperform the market was maintained. The improved macroeconomic outlook with the recovery in oil prices in Russia was positively reflected on consumer confidence, significantly contributing to achieve this result. Again, the above average weather conditions, particularly in the 2nd and 3rd quarters, had a positive reflection on the market. The promotional activities of the industry players throughout the year assured that the market perform better than expectations. Additionally, official postponement of the ban regarding the production of PET bottles of 1.5 liters and above, to 2017, also helped the contraction in the beer market to be lower than expected.
Evaluating these conditions in the best manner, Anadolu Efes performed better than the market thanks to projects and initiatives aimed at the market. Our focus particularly on the upper mainstream segment has been influential in gaining us market share compared to the previous year. Besides, Anadolu Efes continued to increase its share in the growing modern trade channel, while being one of the two largest players in the premium segment. Additionally, as a result of various alternatives offered to consumers during 2016, a much more rapid adoption of the portfolio to the upcoming PET restrictions is expected.
Adapting rapidly to the changing consumer preferences, Anadolu Efes continued to position its product portfolio increasingly in the premium/upper mainstream segment. Consequently, having increased its market share in terms of value, Anadolu Efes was positioned as the second largest player in the market with 14.0% volume and 14.9% value share in 2016.