Beer is the most popular alcoholic beverage in Russia; its average per capita consumption increased by 4% in 2017 (reaching 50.3 liters per person per year), which only amounted to 86% of the indicator for 2013 (58.2 liters). Consumption for 2018 is estimated at 51.3 liters per year per capita, which is generally comparable with the level of 2017. For comparison, the indicator in the major beer-consuming countries is 2 times higher. In the Czech Republic, for instance, consumption exceeds 140 liters per capita per year; the Republic of Ireland consumes more than 130 liters per capita; Germany—more than 100 liters.
Volume of apparent consumption* of beer for 2017 equaled 738.9 million decaliters, having demonstrated 2.4% growth to the indicator for 2016. In monetary terms, beer consumption increased by 10.3% to 2016, amounting to 800.3 billion rubles.
Beer manufacturers associate the market decline of 2013–2016 with a number of factors, an important one being excise duties being raised annually as well as regulations getting stricter. Throughout 2009–2016, the beer excise rate was raised by almost a factor of 7, and has continued to grow since then.
It is important to note that, in 2016, beer brewers were deprived of the opportunity to sell their products in PET containers of more than 1.5 liters in volume as well as to freely advertise their products. A number of restrictions in terms of beer sales outlets at nighttime were introduced, and sales through kiosks and pavilions were banned. At the same time, a reduction in population aged 18–55 also contributed to a decline in the Russian beer market.
In 2018, 1.4% growth is expected in beer consumption, to the volume of 749.4 million decaliters, which is largely due to increased consumer demand, in particular during the FIFA World Cup. As foreign experience has shown, World Cups being held result in a 3–5% growth in the beer market, since there is a culture of consuming beer while watching sports on television. An influx of European tourists is to be considered as well, as the culture of beer production and consumption is most developed in Europe.
Beer output in the Russian Federation in 2017 amounted to 745.6 million decaliters (+2.4% to 2016), according to the Russian Federal State Statistics Service (Rosstat). Growth was achieved through recovering consumer interest in the beverage. Said trend is confirmed by growth in imports of beer, the volume of which grew by 47.7% in 2017, reaching 25.08 million decaliters.
95% of total beer output volumes in Russia fall on light beer with the alcohol content of 0.5–8.6%. The remaining share is occupied by unfiltered, dark, and non-alcoholic beer as well as beer cocktails and malt beverages.
The main share of beer having been imported into the Russian Federation in 2017 was supplied from Germany and equaled 29 and 33% in physical and monetary terms respectively. Imports from the Czech Republic in beer supplied to Russia equaled 13% in physical terms and 12% in monetary terms. Belarusian beer was third and accounted for 12% of all supplies in monetary terms. In physical terms, Belarus was second with the share of 22% in imports.
The overall level of producer prices in 2017 was lower than in the previous year by 1.2% on average. Average prices for beer were declining due to decreasing consumer demand, in particular as a result of a cold summer. In 2018, average producer prices grew by 12% compared with the similar period of 2017, which can be explained by the opposite taking place, namely increased consumer demand. All in all, during the past 5 years, producer prices demonstrated 19% growth, which is primarily connected with increasing excise rates for alcohol.
The maximum price for beer in 2018 was recorded in February (315.6 rubles per decaliter), whereas the minimum value fell on April (278.4 rubles per decaliter).
Dynamics of beer retail sales vary depending on product origin. For instance, the average price for foreign products in 2018 dropped by 6%, amounting to 214.3 rubles per decaliter, whereas beer produced in Russia became 3% more expensive in retail trade, selling at 111.3 rubles per decaliter.
It should be noted that consumer prices for imported and domestic beer have grown by 39 and 69% respectively compared with 2013.
Manufacturers believe non-alcoholic beer production to be the most promising niche for the coming 3–5 years. 2017 showed that the segment had occupied 1.4% of the market against 0.9% in 2013. Whereas the market had only one non-alcoholic beer brand in 2001, in 2017 their number already reached 73, including 33 Russian brands.
The segment of craft beer has been developing, which is directly connected with the culture of visiting bars, hookah lounges, cafés and fast casual restaurants (burger restaurants, steakhouses etc.).
The alcohol market is subject to sharp fluctuations, as it depends on state regulation of the industry as well as prices for final products. No further increase in the excise rate is planned before 2020, which is caused by the current need to reduce the share of illegal alcohol in the Russian market. Said risk is connected with the distribution of counterfeit products as consumer prices for beer continue to grow.
Considering the factors for beer market development as well as the fact that no radical changes in state regulations are expected in the medium term, one can hope that the market will be gradually growing in the coming years. Volume of apparent consumption of beer in the Russian Federation will be growing at approximately 0.3% annually on average, reaching 764.4 million decaliters by 2025 (+3.4% to 2017).
* Apparent consumption implies the current market balance between production, imports and exports. In essence, said indicator reflects the volume of goods available for consumption in the domestic market. It is assumed that stocks, unsold goods and losses are included in the given volume, but are not indicated separately.