Russia: Baltika is restyling brands aiming to become leader in all price segments

Baltika Breweries is restyling its most popular brands and intends to become the leader in all price segments of the Russian beer market, Interfax News Agency reported April 25.

In particular, the company is planning to increase the share of its Baltika N3 brand in the average-priced segment of the Russian beermarket to more than 20% by the end of this year, Baltika marketing vice president Marcho Kuyumdzhiyev said.

It's difficult to predict exact figures, but if we manage to increase the share [of this brand] to 20% by the end of this year, that would be good, he said, noting that the Baltika N3 brand had a 19.3% share of the market at the end of 2006.

“We are hoping for significant growth in this brand, Kuyumdzhiyev said at a press conference in Moscow on April 5. Following the company's first restyling campaign, sales of Baltika N3 grew by almost 20% per month, he said. At present, growth on the beer market has slowed down on the whole and this is normal, but nevertheless we are expecting significant growth”, he said.

The company is also planning to resume packaging of other average-priced Baltika brands - the N2 and N4, he said. The Baltika brand isworth some $2 billion, he said.

Kuyumdzhiyev confirmed Baltika's earlier announced plans to become the number one brand in Europe, surpassing even Heineken. The company is planning to achieve this mainly by increasing its sales on Russian and CIS markets, he said.

Asked if Baltika is planning to purchase a brewery in Europe, he said the company has no such plans. We have a great base in Russia, and we are constructing our export policy on its basis, he said. Exports accounted for about 5% of the company's sales in 2006.

Kuyumdzhiyev said the Russian beer market could grow by 3%-5% in 2007, although it could be a bit more. Our goal is to not grow at lower rates than the market.

Baltika sold 37.2 million hectoliters of products in 2006, up 10.3% from 2005. Beer sales accounted for 36.6 million hectoliters of sales, up 10.6% from the previous year. The company increased revenue to International Financial Reporting Standards (IFRS) 20.8% to 1.74 billion euros in 2006 and net profit 42.2% to 330.9 million euros.

Baltika has ten breweries in nine Russian regions. Baltika merged with the Vena, Yarpivo and Pikra breweries in 2006. Baltic Beverages Holding is the main shareholder in Baltika with 85.6% of the company's charter capital.

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