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In the opinion of the Estonian beverages maker A. Le Coq the company passed its main rival, Saku Olletehas, in terms of market share in November and December.

Tarmo Noop, CEO of the company, told BNS that the headway was marginal and that calculated for the whole year Saku was still ahead of A. Le Coq in terms of market share.
According to AC Nielsen the best sold brand of beer in retail sales last year was A. Le Coq Premium bottled by the A. Le Coq brewery.

Market share of the Premium was nearly half as high as that of Saku Originaal in October and November. In all the market share of Premium was nearly 13 percent of the beer market.

Saku stopped providing sales figures to the brewers` association last January.
The owner of Saku Olletehas is the Danish brewer Carlsberg, while A. Le Coq belongs to Finland`s Olvi.

The Estonian beverage house Saku Olletehas said on Thursday it will cut 16 jobs and apply part-time work and partially paid leave in its production department from Jan. 26 to March 31.

“We believe that these changes in the organization will allow Saku to better adapt itself to the changing market situation, which is affected mainly by the economic decline and the increase in excise duty in Estonia,” Saku’s CEO Veli Pekka Tennila said. Tennila added that five former employees of Saku have taken up jobs with the company’s help with PowerWave AS, a cooperation partner of Saku. Carlsberg, the owner of Saku Olletehas, announced on Thursday that it will lay off at least 270 employees in Denmark, Norway and the Baltic states in the course of restructuring.’

Carlsberg said that in the Baltic countries it was responding to decreased sales figures with a sped-up restructuring plan, as a result of which the number of employees will be reduced by 124 in addition to the 80 cuts announced in October. The layoffs will take place during the first quarter of the year. (Reuters)

It seems that beverages are more exposed to worse economic conditions as one might think. We expect also Olvi’s profitability to be affected (sales mix to worsen). So far A Le Coq’s beer volumes have been increasing, even though the aggregate sales have been declining
in Estonia.

*Negative news for Olvi

More info: Carlsberg’s announcement

According to AC Nielsen research company A.Le Coq Premium is the best selling beer brand in retail trade, clearly outracing other competing beer brands since the beginning of 2008.

According to research conducted by AC Nielsen on consumer preferences in October and November the market share of A.Le Coq Premium in retail trade has enjoyed the leader position since the beginning of 2008 and the distance between A.Le Coq Premium and the second brand – Saku Original – has gradually increased. In terms of sales in October and November the market share of A.Le Coq Premium is almost half as much as that of Saku Original.

In October and November A.Le Coq Premium saw a 15% increase as compared to the situation a year ago, thus achieving a firm leader position and reaching a market share of approximately 13% on the retail trade beer market.

According to Tarmo Noop, Head of A. Le Coq, A.Le Coq Premium is of the largest share in the total A. Le Coq beer portfolio, forming 35% of the total sales of beer of the company. “As compared to the sales results of 2007, the volume of sales litres of Premium has increased a bit, which we consider a very good result taking account of the present economic situation and the general reduction trend on the beer market,” said Noop. He continued: “We uphold the constant development of Premium and contribute a lot both to marketing as well as package innovation.” According to Noop, this year the company also plans innovations with regard to their number one brand – Premium.

The total sales of the company in 2008 was 125.17 mln litres, and the segment which has increased in volume is A. Le Coq beers and ciders. The sales of other segments have remained the same or decreased to some extent as compared to sales in 2007. According to Noop the reason for the decrease in sales is the general reduction in consumption and the bad weather that we had in summer.

In the first 11 months of this year A. Le Coq beer sales exceeded last year’s result by over 300,000 litres despite the general market recession trend. At the same time, the 11-month analysis of the alcohol excise duty proceeds compiled by the Estonian Breweries Association indicates a general beer sales decrease of 6%. Despite the beer market decline, A. Le Coq predicts stability for high-quality beers coupled with an even faster drop in sales of strong beers.

According to Tarmo Noop, Director of A. Le Coq, the beer sales volume increase after a considerable price hike and in the context of the general market decline trend is truly a remarkable result. “Maintaining a stable sales level in the current economic situation is a form of art and even the smallest of rises are very pleasing indeed,” said Noop. He added that, in view of the overall beer sales volume decrease, A. Le Coq’s sales volume increase in excess of 300,000 litres over last year is highly commendable. “We have actually increased our market share and will try to continue doing so,” Noop expressed optimism.

According to Noop, the beer market recession trend has been predictable from the beginning of this year. “I believed that the market would decrease by about 5% and the excise duty proceeds analysis and other summaries indicate approximately the same percentage,” added Noop.

Noop pointed out that the strong beer production decline trend will continue and the Premium beer share will grow. “Although the beer prices have been raised and consumers are now more budget-oriented, they do value high-quality beer and do not want to cut corners in this respect,” remarked Noop. “The increased market share of A. Le Coq Premium is a litmus test of consumers’ quality preferences,” concluded Noop. AC Nielsen’s data shows that as of the end of September, A.Le Coq Premium enjoyed a retail trade share of over 13% and was thus the market leader.

Noop added that the falling trend concerns ciders and other light alcoholic beverages, too. “The decline of the light alcoholic beverage and beer sales will probably continue, which is why it is even more important now to constantly invest in product research and development,” stressed Noop. He believes that one of the causes of the dropping light alcoholic beverage sales is the 30% excise duty raise implemented in 2008. “Tallinn is the fourth most expensive beer city in Europe and so both the city residents and tourists are forced to consume less beer,” Noop admitted.

Source: http://www.alecoq.ee/eng/life/news/?newsID=2340