PETpla.net Insider 05 / 2013

EDITOURS REPORTS 18 PET planet insider Vol. 14 No. 05/13 www.petpla.net widely-known trademarks of that time, such as Zhigulevs- koye, Rizhskoye, Admiralteiskoye and Prazdnichnoye. Times change and Baltika now has a market of 37% of the Russian beer market. The company can look back on an illustrious history. It embarked on the process of privatisation in 1992 and it was at about that time that the idea to create a proprietary “Baltika” brand emerged. The company began its regional expansion in 1997 when it purchased a controlling interest in the Donskoye Pivo factory in Rostov-on-Don, where it installed a production line for non-alcoholic beer and equip- ment to produce 1l PET bottles. Michael Maruschke in talks with Dmitry Mitskevich, Public Relation Department (right) Baltika became part of the Carlsberg Group in April 2008. The company is not only a market leader in beer but is also the largest FMCG (Fast Moving Consumer Goods) company in Russia. It owns eleven breweries in total, which are located in St. Petersburg, Yaroslavl, Tula, Voro- nezh, Rostov-on-Don, Samara, Chelyabinsk, Krasnoyarsk, Khabarovsk and Novosibirsk. It also operates a brewery in Azerbaijan. More than 30 brands of beer, including Tuborg, Carlsberg, Kronenbourg 1664, and a number of regional brands, as well non-beer brands are distributed all over Russia. We met Dmitry Mitskevich from the Public Relation Department in the Baltika-Rostov factory. It employs 650 people and has an annual capacity of 4.5 million hectoli- tres, bottled in two PET lines, two glass lines, one filling cans and another charging 30l kegs. Preforms, which are also distributed to two other Baltika factories, are produced in-house on Husky machines. Ingredients for the brewing process are both imported and locally sourced; the malt comes from Baltika’s own agriculture division in Russia. According to Dmitry, the most popular size is the 1.5l PET bottle. This is mainly due to price; for example, a 1.5l PET is about 10 Roubles cheaper than three 50cl glass bottles. Asked whether the much lower weight of PET would be another sales point for the consumer, Dmitry reiterated that, in his opinion, it is just a matter of price. The shelf live of beer bottled in PET is between two and nine months. We also learned some other interesting facts about beer in Russia. For example, during the Soviet era only one beer, named “Zhigulevskoye”, was allowed to be brewed in the 735 breweries nationwide. We were also advised that the first Russian brewery was founded in St. Petersburg by Abraham Kron under the name of Alexander Nevskiy in 1795. It was not, back then, bottled in PET. www.baltika.ru Ukraine: Saturated market, weak demand In early September 2012, the Editourmobil “Go to Brau Beviale” Tour reached the Ukraine, from where it would head back to Germany via Poland. Our travels coincided with the European Football Championship which of course was held jointly in Poland and the Ukraine and from which Spain had just emerged as winners. To prepare for the Euro 2012, both countries had invested heavily in infra- structure projects. For us, the inestimable advantage of this investment was the luxury of travelling on decent roads, something seriously lacking in previous visits. Surprisingly, and very much contrary to expectations, Euro 2012 had little or no effect on the PET market. Since the financial crisis struck, per capita consumption has stagnated at a low level, and the Euro Championship did nothing to stimulate demand. With the benefit of hindsight, as Yuriy Khmara of Retal ruefully acknowledged, it was blindingly obvious. Spectators did indeed consume signifi- cant quantities of drink, mainly beer, but overwhelmingly in the stadiums themselves out of cups, or later in the restau- rants. Thus, there was no additional business in PET. PET usage in the Ukraine will only develop when the eco- nomic situation improves. Ukrainians’ natural optimism is tempered by the realisation that the upturn may be some time in coming. The revelation for us was to see how the major players in the market were coping with the situation, a stark contrast with the explosive growth of just a few years ago. Sandorra, a 100% subsidiary of Pepsi, is now run- ning iced tea on its aseptic line, after the juice market failed to live up to expectations. Slavutich, part of the Carlsberg group, is concentrating on cost savings, in particular the