Russia: Baltika group looks to enhance positions in Ural

Baltika group intends to extend its domestic market share, The Russian Brewers Union released October 02. Recently, Baltika undertook new marketing campaigns and engaged itself in new investment projects (including packaging) aiming to enhance beer sales. Besides, the company is beginning to put forward more interest to develop the beer market in Russian districts where it enabled a very well responding distribution system.

Experts believe after merging with Vena, Pikra and Yarpivo, Baltika’s sales growth will surpass the sector’s growth. Inside the company, the essential goal is to keep the 36.6% market share in recorded the last year. The company has shown a big interest for the Ural beer market. Yet, Baltika is much better settled in Yekaterinburg than in Chelyabinsk where it must fight a tough competition coming from Heineken. Chelyabinsk-based Vena sustains Baltika’s position on the local market with an annual capacity of 4.5 million hl. As Baltika’s officials said, Baltika will emphasize upon expanding to new markets in other regions.

“We intend to hold and develop our presence trough exclusive sales representatives in not less than 90% of shops in towns and villages with population above 5000 persons. Our retailers will continue to work with other markets through their own sales representatives,” Baltika group’s head of sales in Ural region, Anatolii Medvedev, said.

Since the beginning of 2006, Baltika’s growth in the Ural region was kept on hold by a frosty winter, by the reorganization of its distributor’s chain and by competitors’ 2.5 PET bottled beer, to which, instead, Baltika responded with proactive measures increasing sales since the beginning of the brewing season.

After proceeding to a big amount of innovations regarding its brand portfolio and packaging, Baltika’s products became widely spread in every price segment. “Baltika group holds a brand portfolio which responds to needs in every price segment. We will continue to develop all of the segments, enhancing our position as a performing leader. In Yekaterinburg we plan to shift to another consumption structure, with predilection to more dynamic market segments, like premium and license beer segments,” Medvedev added.

One can judge upon Baltika’s progress by looking to the company’s own growth: it already finished merging procedures with Vena, Pikra and Yarpivo. As a result, Baltika group includes 10 brewing factories spread in all Russian federal districts, with a general capacity of 40million hl per year.

The Federal service of national statistics said preliminary figures showed that national beer production increased 7.1% during January-August 2006. 68.4 million hl of beer were brewed during this period of time in Russia. According to Vecheslav Mamontov, president of the executive committee of the Russian brewers union, the prevailing positive dynamics of the brewing sector can be explained by the efforts to expand beer distribution in Russian districts. “Overall, our forecast for the brewing sector in 2006 remains unchanged: 4-6%,” Mamontov said.

Presently, the Russian beer market is going through a globalization phase. The share of domestic breweries with brewing capacities less than 1 million hl per year is currently 14%. Yet, Russia is the 30th in the world by the volume of dinked beer per capita (62 l per capita annually).

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