Monday, February 6, 2012

Alcoholic Drinks in Serbia


The negative trend of the last three years continued in 2011. Although the rate was significantly lower than in 2010, alcoholic drinks volume sales continued to fall during 2011. As expected, a slightly lower decline was recorded on-trade than off-trade given that Serbian people like to spend their time in on-trade outlets. In addition to the economic crisis that has caused a decline in employment and personal income, ?the prohibition on selling alcoholic beverages after 22:00hrs or 23:00hrs in off-trade channels in a number of cities (including Belgrade and Novi Sad) has also put pressure on sales. Furthermore, sales are also being limited by the restriction of cafe opening hours to 24:00hrs in residential areas.

Arrest of Ratko Mladic brings Serbia closer to joining EU
One of the most important conditions for the continuation of Serbia’s European integration was met in May 2011 following the arrest of General Ratko Mladic, who is suspected of war crimes. This will allow faster candidate status for EU membership and thus speed up reforms and create a better climate for investment. As a result of these developments, consumer purchasing power is expected to rise and there will be further market liberalisation, especially regarding goods from EU countries. The real effects of these changes within alcoholic beverages can be expected to be seen in 2012.

Serbia Alcoholic Drinks Market

Published: February 2012
Price: US$1900

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Beer players lead sales
Beer, which is highly concentrated, is the most dynamic alcoholic beverages area in Serbia. In addition to the three popular standard domestic brands, which accounted for 60% of alcoholic drinks total volume sales in 2011, the popularity of famous brands (Amstel, Beck’s, Tuborg, etc.) - which have started to be produced in Serbian factories acquired by leading global players Anheuser-Busch InBev NV, Carlsberg and Heineken – is also increasing. Also, it should be noted that new niches such as non-alcoholic, flavoured low-alcoholic and wheat beer are also emerging.

Expansion of large discounters
Widespread distribution and lower prices have caused an increase in the popularity of larger retail formats such as supermarkets and hypermarkets. Until now, Serbia has lacked large discount chains. However, there have been announcements that this may change soon. Despite registering in Serbia in late 2010, famous discounter Lidl has not yet started operating, with the company’s first Serbian outlet not expected to open before 2012. It is expected that the arrival of discounters will significantly improve competition and result in a general drop in prices.

Further segmentation
The strong segmentation seen within beer could spread to other areas over the forecast period. As a result of the introduction of stricter drink driving legislation, it is expected that there will be a shift towards lower alcoholic drinks. On the other hand, the prohibition of the sale of alcoholic beverages after 22:00hrs introduced in the largest Serbian cities could affect off-trade sales, especially within beer, wines and RTDs.

Table of Contents
Alcoholic Drinks in Serbia - Industry Overview
EXECUTIVE SUMMARY
Crisis not yet over
Arrest of Ratko Mladic brings Serbia closer to joining EU
Beer players lead sales
Expansion of large discounters
Further segmentation
MARKET BACKGROUND
Legislation
Table 1 Number of On-trade Establishments by Type 2006-2011
TAXATION AND DUTY LEVIES
Table 2 Taxation and Duty Levies on Alcoholic Drinks 2011
Table 3 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Categories 2011
Table 4 Selling Margin of a Typical Beer Brand 2011 (Jelen pivo 0.5L, Apatinska pivara doo)
Table 5 Selling Margin of a Typical Wine Brand 2011 (Vranac, Agrokombinat 13 Jul ad)
Table 6 Selling Margin of a Typical Spirits Brand 2011
OPERATING ENVIRONMENT
Contraband/parallel trade
KEY NEW PRODUCT LAUNCHES
Summary 1 Key New Product Developments 2010-2011
MARKET INDICATORS
Table 7 Retail Consumer Expenditure on Alcoholic Drinks 2006-2011
MARKET DATA
Table 8 Sales of Alcoholic Drinks by Category: Total Volume 2006-2011
Table 9 Sales of Alcoholic Drinks by Category: Total Value 2006-2011
Table 10 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2006-2011
Table 11 Sales of Alcoholic Drinks by Category: % Total Value Growth 2006-2011
Table 12 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Volume 2011
Table 13 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Value 2011
Table 14 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Volume 2011
Table 15 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Value 2011
Table 16 Company Shares of Alcoholic Drinks by Global Brand Owner 2007-2011
Table 17 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2006-2011
Table 18 Off-trade Sales of Alcoholic Drinks by Category and Distribution Format: % Volume Analysis 2011
Table 19 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2011-2016
Table 20 Forecast Sales of Alcoholic Drinks by Category: Total Value 2011-2016
Table 21 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2011-2016
Table 22 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2011-2016
DEFINITIONS
Published data comparisons
Summary 2 Research Sources
Alcoholic Drinks in Serbia - Company Profiles
BIP Beograd ad in Alcoholic Drinks (Serbia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Rubin AD in Alcoholic Drinks (Serbia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Tim 99 doo in Alcoholic Drinks (Serbia)
STRATEGIC DIRECTION
KEY FACTS
INTERNET STRATEGY
COMPANY BACKGROUND
PRIVATE LABEL
COMPETITIVE POSITIONING
Vinoprodukt-Coka doo in Alcoholic Drinks (Serbia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Beer in Serbia - Category Analysis
HEADLINES
TRENDS
Despite the economic crisis and the large decline in beer consumption since 2009, the area remains very dynamic, with major players fighting intensively for sales share. Given that standard lager beer is near maturity, leading companies are beginning to focus on niche areas such as non-alcoholic beers, low-alcoholic beers, dark beers and flavoured beers by investing more and more resources in marketing activities.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Apatinska pivara continued to lead beer sales in 2011, recording a total volume share of 54% and sales of 263 million litres. The company’s leading Jelen pivo brand recorded sales of 155 million litres and led sales with a total volume share of 32%. Apatinska pivara is also the largest beer exporter in Serbia, with 25% of its total production leaving the country in 2010. Jelen is mainly exported to neighbouring countries but also some ‘exotic’ destinations such as Cuba. Carlsberg Srbija sold 122 million litres of beer in 2011 and ranked second within the area. The company’s main brand is its standard lager Lav. After the joint venture between Heineken and Efes Srbija in Ujedinjene Srpske Pivare in 2008, two breweries in Pancevo and Zajecar were incorporated into the new company, with production capacity increasing from 150 to 300 million litres.
PROSPECTS
Given the latest developments in the industry, especially key new launches, it is clear that beer is becoming increasingly differentiated, with a growing number of new niche products being introduced. On the other hand, a growing number of international premium brands are now produced in Serbia and more and more resources are being invested in their promotion. As a result, a continuation of the premiumisation trend can be expected over the forecast period.
CATEGORY BACKGROUND
Lager price band methodology
Summary 11 Lager by Price Band 2011
Table 23 Number of Breweries 2006-2011
CATEGORY DATA
Table 24 Sales of Beer by Category: Total Volume 2006-2011
Table 25 Sales of Beer by Category: Total Value 2006-2011
Table 26 Sales of Beer by Category: % Total Volume Growth 2006-2011
Table 27 Sales of Beer by Category: % Total Value Growth 2006-2011
Table 28 Sales of Beer by On-trade vs Off-trade Split: Volume 2006-2011
Table 29 Sales of Beer by On-trade vs Off-trade Split: Value 2006-2011
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 31 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 32 Beer: Production, Imports and Exports: Total Volume 2005-2010
Table 33 Company Shares of Beer by National Brand Owner 2007-2011
Table 34 Company Shares of Beer by Global Brand Owner 2007-2011
Table 35 Brand Shares of Beer 2008-2011
Table 36 Forecast Sales of Beer by Category: Total Volume 2011-2016
Table 37 Forecast Sales of Beer by Category: Total Value 2011-2016
Table 38 Forecast Sales of Beer by Category: % Total Volume Growth 2011-2016
Table 39 Forecast Sales of Beer by Category: % Total Value Growth 2011-2016
Cider/Perry in Serbia - Category Analysis
HEADLINES
TRENDS
Although sales remain negligible, since being launched in March 2011 Somersby has become recognisable as a summer party drink and is especially popular among female consumers.
PRODUCTION, IMPORTS AND EXPORTS
RTDs/High-Strength Premixes in Serbia - Category Analysis
HEADLINES
TRENDS
As an area which mainly targets young urban consumers, RTDs/high-strength premixes was strongly affected by the economic crisis and resulting high unemployment. The largest area, wine-based RTDs, recorded a 6% decline in on-trade volume sales and an 8% decline in off-trade volume sales in 2011 while spirit-based RTDs sales fell by 7% and 1% respectively. It is obvious that significantly higher on-trade spirit-based RTDs prices are forcing consumers to turn towards off-trade channels.
COMPETITIVE LANDSCAPE
Domestic producer Vinoprodukt-Coka entered RTDs/high-strength premixes with its wine-based RTD Di Luna Sangria in 2003. Although several producers appeared in the last three years, Di Luna Sangria still dominates sales, recording a total volume share of 64% in 2011. However, the brand is in decline, partly due to rising competition and partly due to the growing popularity of other areas and global players.
PROSPECTS
As a new area which attracts interest from young consumers, RTDs/high-strength premixes will play a more significant role within alcoholic drinks over the coming years. However, sales will remain limited during the forecast period. Growth will be fuelled by rising consumer purchasing power, with spirit-based RTDs and wine-based RTDs having respective forecast period total volume CAGRs of 3% and 2%.
CATEGORY DATA
Table 40 Sales of RTDS/High-strength Premixes by Category: Total Volume 2006-2011
Table 41 Sales of RTDS/High-strength Premixes by Category: Total Value 2006-2011
Table 42 Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2006-2011
Table 43 Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2006-2011
Table 44 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Volume 2006-2011
Table 45 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Value 2006-2011
Table 46 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Volume Growth 2006-2011
Table 47 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Value Growth 2006-2011
Table 48 Company Shares of RTDS/High-strength Premixes by Global Brand Owner 2007-2011
Table 49 Company Shares of RTDS/High-strength Premixes by National Brand Owner 2007-2011
Table 50 Brand Shares of RTDS/High-strength Premixes 2008-2011
Table 51 Forecast Sales of RTDS/High-strength Premixes by Category: Total Volume 2011-2016
Table 52 Forecast Sales of RTDS/High-strength Premixes by Category: Total Value 2011-2016
Table 53 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2011-2016
Table 54 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2011-2016
Spirits in Serbia - Category Analysis
HEADLINES
TRENDS
After three years of decline (2008, 2009 and 2010), spirits is showing the first signs of recovery. Although sales in most areas continued to decline in 2011, overall total volume and total current value sales increased by 1% and 9% respectively as a result of the strong rise in demand for fruit-based spirits (other spirits) and bitters, which accounted for more than half of spirits sales in 2011 (12 million litres).
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
As a result of their excellent distribution and marketing strategies, which are oriented primarily towards the on-trade segment, SI&SI Group led spirits sales in 2011, recording a total volume share of 22%. The company’s success can be attributed to the popularity of its Gorki list bitters brand, which recorded a total volume share of 78%. Rubin, which produces the traditional Vinjak brand, ranked second in 2011 with a total volume share of 19%. Vinjak recorded a total volume share of 78% in 2011. Once by far the most popular brand within spirits, Vinjak’s sales are now in decline, partly because of poor marketing and partly because of the general decline in the popularity of brandy, which is now highly mature and considered a drink for older consumers.
PROSPECTS
The post-crisis recovery will differ within all areas over the coming years. Sprits has a projected total volume CAGR of 2%. In addition to other spirits (fruit-based spirits) and whiskies, which each have a projected total volume CAGR of 4%, rum and gin also have strong potential thanks to the growing popularity of mixed drinks and cocktails. On the other hand, brandy has reached a high level of maturity and has a total volume CAGR of -2%.
CATEGORY DATA
Table 55 Sales of Spirits by Category: Total Volume 2006-2011
Table 56 Sales of Spirits by Category: Total Value 2006-2011
Table 57 Sales of Spirits by Category: % Total Volume Growth 2006-2011
Table 58 Sales of Spirits by Category: % Total Value Growth 2006-2011
Table 59 Sales of Spirits by On-trade vs Off-trade Split: Volume 2006-2011
Table 60 Sales of Spirits by On-trade vs Off-trade Split: Value 2006-2011
Table 61 Sales of Spirits by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 62 Sales of Spirits by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 63 Spirits Production, Imports and Exports: Total Volume 2005-2010
Table 64 Brandy & Cognac Production, Imports and Exports: Total Volume 2005-2010
Table 65 Gin Production, Imports and Exports: Total Volume 2005-2010
Table 66 Liqueurs Production, Imports and Exports: Total Volume 2005-2010
Table 67 Vodka Production, Imports and Exports: Total Volume 2005-2010
Table 68 Other Spirits Production, Imports and Exports: Total Volume 2005-2010
Table 69 Company Shares of Spirits by National Brand Owner 2007-2011
Table 70 Company Shares of Spirits by Global Brand Owner 2007-2011
Table 71 Brand Shares of Spirits 2008-2011
Table 72 Forecast Sales of Spirits by Category: Total Volume 2011-2016
Table 73 Forecast Sales of Spirits by Category: Total Value 2011-2016
Table 74 Forecast Sales of Spirits by Category: % Total Volume Growth 2011-2016
Table 75 Forecast Sales of Spirits by Category: % Total Value Growth 2011-2016
Wine in Serbia - Category Analysis
HEADLINES
TRENDS
Many years without investment in wine and economic isolation means that Serbian wines tend to be of low quality. In addition, wine consumption is declining and stood at just 6 litres per capita in 2011. Although the state has subsidised the renovation of vineyards and the establishment of new wineries, this has had no significant impact on the popularity of wine and consumption.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Multinational companies are not very strong within wine. Much stronger competition comes from regional wines, which are of good quality and competitively priced. The biggest threat to domestic wines is the availability of good quality and lower priced wine from Macedonia. As one of the main Macedonian export products, wine enjoys strong support from the government as a result of lower taxation for farmers (from 18% to 5%), production subventions (EUR 1 per kilo of grapes) and unlimited imports in Serbia. The biggest producers are Skovin and Vinarska Vizba TikveŇ°.
PROSPECTS
A growing number of small Serbian wineries are making premium wines with good export potential. Podrum Vina Aleksandrovic, Vinarija Kovacevic, Kuca Vina Zivkovic and Podrum Radovanovic are some of the most famous wineries in the country and represent a new approach to wine production. The fact all of these wineries are located in traditional wine regions is important for their image and popularity. Although they still suffer from bad economic conditions and strong competition, these wineries represent a good base for future production and the first good results can be expected towards the end of the forecast period.
CATEGORY DATA
Table 76 Sales of Wine by Category: Total Volume 2006-2011
Table 77 Sales of Wine by Category: Total Value 2006-2011
Table 78 Sales of Wine by Category: % Total Volume Growth 2006-2011
Table 79 Sales of Wine by Category: % Total Value Growth 2006-2011
Table 80 Sales of Wine by On-trade vs Off-trade Split: Volume 2006-2011
Table 81 Sales of Wine by On-trade vs Off-trade Split: Value 2006-2011
Table 82 Sales of Wine by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 83 Sales of Wine by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 84 Wine Production, Imports and Exports: Total Volume 2005-2010
Table 85 Forecast Sales of Wine by Category: Total Volume 2011-2016
Table 86 Forecast Sales of Wine by Category: Total Value 2011-2016
Table 87 Forecast Sales of Wine by Category: % Total Volume Growth 2011-2016
Table 88 Forecast Sales of Wine by Category: % Total Value Growth 2011-2016