Russian brewers bullish about future growth

Related tags Brewing Beer Brewers

The recent move to ban beer advertising in Russia is just one of a
number of challenges facing brewers there, but a recent survey of
the country's leading operators suggests that most of them are
relishing the challenges to come. Angela Drujinina reports.

The survey, commissioned by analysts Market Advice​ and released this week to coincide with the Brau Beviale drinks exhibition in Germany, shows that the advertising ban is being met with equanimity by many brewers.

While more than a half of the respondents said that they expected beer consumption to decline in 2005 due to the restrictions - introduced back in September to limit beer adverts on TV to the night hours, as well as preventing brewers from sponsoring televised sporting events - a large number of them said that the ban would have no effect at all.

The high level of beer advertising in recent years means that most Russian consumers already know which brands they prefer, some brewers argue, and that therefore a ban on advertising will have little effect.

Furthermore, the ability of beer adverts to influence consumer preferences has diminished dramatically over the last two to three years as drinkers have become more aware of beer as a product - just a few years ago, beer was a novel enough arrival on the Russian market for consumers to be influenced by the power of advertising.

Most brewers are now more concerned with improving the quality of their beer as a means of attracting new drinkers, with some two thirds of the surveys respondents saying that this would be their principal focus in the coming year.

But the impact of the advertising ban was just one of the issues covered by the survey.

Respondents were also asked their opinion on the likely future of the Russian malt sector, notably whether there were opportunities for domestic malt processing or whether the country's brewing industry would have to rely on imports to ensure better quality beer.

Some respondents argued that there was little reason to invest in domestic malt production, not only because current capacity was adequate to meet market demands but also because the quality of Russian barley, from which the malt is produced, is likely to remain of low quality.

They also argued that most of the foreign brewers present in Russia already use imported malt rather than investing in domestic production, and that this was unlikely to change.

But some of the survey's respondents argued that malt production in Russia could prove to be highly profitable in the future, as the brewing sector continues to grow. This would need investment in new barley crops, and new production technology, but this investment would be recouped within three to seven years as a result of increased demand for good quality malt at reasonable prices, they said.

For example, Russia's top brewer, Baltika, recently announced that it would cut its malt imports to about 20 per cent from 50 per cent as it sought to cut costs, sourcing instead from Russky Solod, the domestic maltster with the best quality reputation.

Indeed, Russky Solod was the only local player mentioned by the survey's respondents as offering good quality malt, with all of the other leading players owned by foreign groups - Weissheimer Malz, Weiermann, Raisio, Dust Malz and Soufflet.

The Russian malt market is though to be around 1.6-1.7 million tons a year.

For further details on the Market Advice survey, click here

Related topics Ingredients

Related products

show more

Can your red beet ENDURE the heat?

Can your red beet ENDURE the heat?

Content provided by Givaudan | 22-May-2024 | Product Brochure

Endure Beetroot is patent pending vegan, kosher, and simple label red option with improved heat stability in cakes and other bakery applications that can...

Increasingly, sustainability is linked to value

Increasingly, sustainability is linked to value

Content provided by Corbion | 08-May-2024 | Insight Guide

Today, it’s not enough for products to be good for you. Consumers — especially Millennials and Gen Z-ers — not only want bakery products that are good...

Related suppliers

Follow us


View more