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Kazakhstan Food and Drink Report Q3 2008Published by: Business Monitor International Published: Aug. 29, 2008 - 37 Pages Table of Contents
AbstractThe Kazakhstani drinks sector has been attracting considerable attention from expansion-orientedinternational operators, as discussed in BMI’s recently published Kazakhstan Food & Drink Report forQ308. Although Russia continues to attract the bulk of investments in the CIS’s food and drinks sector,many firms are stating to see the potential of this oil-rich economy.Beer is the most popular alcoholic drink in Kazakhstan, with the domestic market experienced boominggrowth in recent years. Kazakhstan has attracted considerable attention from international brewers for it isseen as one of the CIS region's best-performing economies due to a commendable post-independencereform effort, coupled with sound fiscal and monetary policies, which has led to enviable levels ofeconomic growth and rising disposable incomes. Another factor has been the government’s recentacknowledgment that there is a need to diversify its economy to reduce its dependency on energy exports,which provides opportunities for investors in other industries, such as alcoholic drinks. One such investor is Efes Breweries International (EBI) which has been making major investments in thecountry for years, such as the construction of a greenfield plant in Almaty in 2001, and has been reapingthe benefits. In April 2008 EBI announced impressive full year results for 2007, as sales volumes grew13.8% year-on-year (y-o-y) to 13.3mn hl in 2007. The company pointed to Kazakhstan, a key emergingmarket, saying that robust volume growth in both Russia and Kazakhstan are expected to help expandmargins. However, EBI can expect strong competition from Carlsberg-controlled Baltic BeveragesHolding (BHH) which also has a long-established presence in the market and is the leading brewery. Inrecent years the company has been investing heavily in the Central Asian markets, and has this yearcompleted its first brewery in neighbouring Uzbekistan’s capital Tashkent. BHH has said that in thefuture markets such as Kazakhstan will become increasingly important as growth drivers, as the beermarket continues to develop and mature, therefore increasing investments can be expected. Such investments will be a major factor in the strong sales growth BMI is forecasting for alcoholic drinks- 79.4% in value terms between 2007 and 2012, reaching US$1,225mn by the end of the forecast period.Per capita spending on alcoholic drinks will rise significantly by almost 77% to reach US$78.5 asdisposable incomes rise, alcohol becomes more widely available, and consumers switch over to highervalue drinks. The beer market is expected to experience the strongest growth in terms of the alcoholicdrinks sub-sector. Young consumers in particular are illustrating a preference for drinks with loweralcohol content, which is reflected in beer’s rising popularity at the expensive of more traditional spirits.The other major driving factor behind growth in all food and drink product categories will be thecountry’s economic performance. Developments in the hydrocarbons sector and sustained highcommodity prices will continue to drive overall growth in the economy, along with consumer confidenceand spending. Get Full Details About This Report >> |
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