Academia de Studii Economice din Bucureti

Marketing Project
Beer Market Analysis










Members:
Stoica David
Suciu Alin
Turcus Valeriu

Market Analysis for Beer in Romania

The Product
Bitter, cold, blonde or black, beer is a drink which has long surpassed any border
through its gift of bringing friends together.
The Greek-Roman civilization considered beer the drink of the old people. Suburbs in
Rome and Athens were full of small beer factories which supplied small bodegas. A famous
beer lover supposedly would have been Julius Caesar, and the legend says that after he
crossed the Rubicon with his legions to conquer Rome, he toasted to his victory with beer.
Even though Romans didnt appreciate beer highly, the Roman medics had a different
opinion. Medicine treatise dating back to Antiquity were full of recipes in which beer played
the main role. Antyllus recommended to women who were nursing little children to drink beer
with with withered and pressed palm tree leaves. Philumenus recommended against bee stings
beer mixed with crushed garlic, and Marcellus Empirius claimed that a glass of boiled beer
with salt stopped any kind of cough. Interestingly, all these recipes are still being used today
in traditional European medicine.
The biggest Roman accomplishment regarding beer was passing the recipe to the
Germanic tribes they have conquered in the north of Europe. The Germans mastered this
craft, making beer their national drink. .
Beer commerce exploded in the eleventh century. Also in this period the first
commerce associations were created, associations that tried to face the power of the feudal
lords or of the governments depending on the country. The so called Traders Guilds thus
became very influential in the economy of that time, they passed borders and managed to
form even brotherhoods. One of the most important was the Hanseatc Federation which
included the most important German cities.
Beer was also pretty commonly drank at the work place. Scientist and politician,
Benjamin Franklin registered the daily beer consumption of the people working in a London
typography which he visited. Each employee consumed half a pint before breakfast, one pint
between breakfast and lunch, one pint at lunch, one at 60 clock and another one after
finishing work.




Beer in Romania
Mass production of beer on Romanian territory dates back to the early 19th century
when Johann de Gotha inaugurated a brewery in 1809 , on the outskirts of Bucharest . Since
the second half of the 19th century , the emergence of several breweries translates into the
opening of numerous pubs , some of which however had only a fleeting life.
Very quickly the brewery became an institution, and not only that but also an
important meeting place for journalists , politicians and theater people. Thus was created a
specific language , as was for example the name of the beer sales measures.
The ambience of Bucharest Brewers nf the turn of two centuries often transpire in
stories by Caragiale, thanks in large to his experience as a self proclaimed "beer salesman.

A common classification , which meets in ordinary traders and consumers is:
- Filtered or unfiltered dark beer
- Root beer
- Pasteurized or unpasteurised lager
- Superior lager
- Cream of beer
- Beer
- Beer with lime

Supply analysis :
Presentation of main supply (producers , importers) in terms of products offered :
As part of the Heineken group , Heineken Romania was founded in 1998 ,
initially carrying the name of Brau Union. Since March 2007, the company
changed its name to Heineken Romania , which meant changing the culture
and values of the Heineken Group .
The portfolio of brands Heineken Romania covering all market segments :
Heineken , Silva , Ciuc Premium , Golden Brau , Neumarkt , Bucegi ,
Edelweiss (import ) Zipfer (import ), Gosser, Schlossgold, Gambrinus,
Harghita and Hategana.
Heineken Romania is number one on the beer market in Romania , with a
market share of 31.9 % and has four factories terioriul Romania, located in
Constanta , Craiova, Miercurea Ciuc and Targu Mures .
Ursus Breweries , a subsidiary of SABMiller, is known because of brands
like : URSUS, Ciuca , Azuga , Oak , Redd's , Grolsch , Peroni Nastro Azzurro
, Pilsner Urquell and Miller. It owns four factories in Romania : Cluj -Napoca ,
Timisoara, Buzau and Brasov. Timioreana was declared the best lager in the
world at the Australian International Beer Awards. Timioreana brand is based
on tradition and is very successful because it answers very well to the
consumer needs. Thus it has associated its image with football and more, it
turned to using a PET packaging. Ursus is also the official sponsor of the
national football team.
Romaqua Borszk Group makes its presence felt on the beer market in
Romania through Albacher trademarks and Dorfer .
Bergenbiers local branch is StarBev group. Along Bergenbier, Cheers, Stella
Artois, Beck's and Lwenbru which are produced in Romania , the company
imports Leffe and Hoegaarden which are Belgian specialties . Bergenbier has
also its image associated with football, as they were the official sponsor of the
national football team of Romania for a period of 12 years. Currently
Bergenbier has associated its name with the Romanian Football Ligue 1.
United Romanian Breweries Bereprod holds exclusive portfolio of
international premium beer brands: Tuborg, Carlsberg, Skol, Holsten and
imported beers Guinness and Kilkenny. The largest volume of sales recorded it
Skol brand, following their mainstream media activities.
European Food S. A. sell beer such as Burger, Servus, Guttenbier and
Meister.

The total volume of beer sales in Romania in the year of 2013 was 16,3 mil.
hectoliters, small that the volume registred in 2012 when it was regisetred sales of 18,2 mil.
hectoliters.So, we can say that in the year of 2013, the beer market has been submitted to a
major contraction from the viewpoint of the sales. The decrease of the consumption is the
result of the reduced wages of the consumers and also because of their reduced trust in the
economic situation, but also because of the fiscal pression over the produces and the
unfavorable weather in the summer of 2013.
The contraction of the beer market in 2013 lead to a decrease of 10 mil. euros to the
invested budgest by the producers-members of the Association, these leading to a 62 mil.
euros. Until now, the big beer produces invested in Romania over 1,25 bil. Euros and the local
beer production represents over 97% of the beer consumed by the Romanian population.
Regarding the repartition of the sales by offerers, we can see in the table below that
Heineken Romania is the market leader with 31.9 market share.

Offerers Market share 2012(%) Market share 2013(%)
Heineken Romania 30,1 31,9
Ursus Breweries 28,5 26,9
Bergenbier 12,2 12,4
United Romanian Breweries 8,9 8,2
European Food S.A. 7,2 7,2
Romaqua Group Borsec 3,1 3,7
Others 10 9,7

Because of the desire of ensuring an appropriate environment in the sector of beer
production in a national level, five of the biggest companies that are on the Romanian market
are now members of the Ascociation of Romanians brewers: Bergenbieer, Heineken Romania,
Romaqua Group, Ursus Breweries and United Romanian Breweries. Together, the five
companies give over 80% of the beer quantity cosumed in Romania.
The analyse of the demand
Regardin the beer consumption, being a product for the people over 18 years old and
unsatisfying primary needs, the cosumer, the buyer and the decider are the same. Amog flavor
and the attachement for the brand, a high impact regarding the deicision of the brand is the
economic aspect.
With the help of Insider, an instrument made by the department of strategy and
research of Graffiti BBDO, the profil of the cosumers of the four big categories of beer in
Romania was created: super premium, premium, mainstream and economic.
- The sophisticated 6%
The teens (67% are under 39 years old), live especially In the big cities, have big
wages and superior education. They are successful people, aware of this fact and
appreciated by those that are around them. They pay a lot of attention with their
image, they are very individual the independent. The choice of the brand is very
important, being one of the elements that creates their status and makes them different
from the others. The house, the car and their lifestyle- all of these indicate their high
social status. When they are going to shopping, they choose the most expensive shops,
the price having a small importance for them when it comes to their acquistions. They
have a social active life, with a small group of friends, mostly elites, this thing
contribuiting to their need of being far from the other social classes. When they have
timp to spend, they preffer the confort and sophisticated experiences. The beer brands
that gain their interest are those who, among the international recognition, transmit
refinement and the exclusivity of consumption.
- The professionals 24%
Consumed in a proportion of 50% by the people with their age between 18-34 years
old, the premium beer attracts people with medium wages and medium education.
Their aspirations are in the direction of professional recognition and reaching the
Western Europeean lifestyle. They trust their capacities buy among all of these, the
appreciation of the others in the direction of the success, and the assurance that they
are on the right road in reaching the success are very important for their own succes.
So, the premium consumers monitor their image and try to build a successful one: to
cosume and to have prestige brands. They are open persons, independent, who
appreciate the new experiences. They spend their free time with their friends and
consider that this situations are a well-deserved escape, a reward for their everyday
efforts, their principle being: I want all the best for me because I give my best.
- The family man 54%
Equal distrubuited in all age categories, the mainstream cosumers are most of them
married, with medium wages and medium education. They are simple people, not
sophisticated, and their values that motivate them are: the family, the safety, the stability and
the friendship. They are people please, optimistic, who know how to enhjoy life. The opinion
of the others is important also for this category and its sustained by their smart choices
among the people around them (collegues, neighbors. Theyll be always proud because of a
new smart choice/solution, theyll always want to share and recive the apprectiation of
those around them. The beer is a kind of happiness, fun, celebration of their meetings. They
are aware buyers, the restrictions of the budget being a factor that takes them out from a
compromise between the price and the quality. Rational, a beer brand is appreciated by this
group should succeed to merge the armonic prestige (quality, tradition etc.) with the
availability (accessible price, good distribution), the key emotional element being the social
happiness. On this sector, the Skol brand imposed their product, being a beer that is suitable
for young people, with the sense of humor, popular and contemporary.
- The traditionals 16%
They are men with low wages and low education, most of the married and high-aged
that the cosumers of the other categories (65% of them are over 45 years old). They
are that type of people that stay with the family, that prefer the stability and
organization. Conservative by definition, they join the traditional values, wich they
apply also in their family. Nostalgic when it comes to good times of the past, they
are unconfident in new things, innovative things, wich they consider that make more
harm than good. Their small wages make them being buys with the need of assuring
their daily life and to look with no trust over the future, wich they think that it is
threatening and they have no control over it. Their buying behavior is mostly
controlled by price. Though, they try as much as possible to find a quality thats safe,
good for their health, in the segment of the low-priced brands. The big procent of
consumers that this segement gains together is because of the local beers that are
preferred for freshness and for their contribution to the local pride. According the the
Datasight previsions, this segment wll drop, eventhough the beer market will increase.

Calculated with the reference of the data delivered by the last Romanian
census, the beer consumption per capita in 2013 reached the value of 87 liters, in a
decrease that the year of 2012, when this number was around 90 liters per capita.

In the year of 2012, and also and in 2013, the Romanian consumer proved a
high preference in buying retail beer and cosume it at home. In only 35% and 33% of
the cases, the Romanian cosumed the beer in a pub or a restaurant.

Brand Market share 2012(%) Market share 2013(%)
Timisoreana 14.9 14.3
Bergenbier 10.0 10.0
Golden Brau Original 9.2 9.8
Bucegi 6.6 7.1
Burger 6.8 6.6
Ciucas 5.6 5.6
Neumarkt 5.1 5.4
Ursus 6.0 4.9
Skol Pilsener 4.6 4.1
Ciuc Premium 3.7 3.8
Others 27.6 28.3

The market of this product gains the effective market formed by the actual cosumers,
the potential market formed by the effective market + relative non-cosumers and the theoretic
market, formed by the potential market + absolute non-consumers.
- Absolute non-consumers- people that will never buy beer; they represent a small
percent, around 9%. From this category take part also the persons that are forbidden to
drink alcohol or those who are not agreeing it. (for ex. Religious reasons).
- The relative non-consumers-peope that would consume the product, but for some
certain reasons they dont do it: its about the lack of money, or they dont have the
proper age (under 18 people). The percent of these people is around 13%.
- The actual cosumers- people that consume beer-78%.
-
Year Theoretic market
(mil.perssons
Potential maket (mil
perssons)
Effective marker (mil
perssons)
2012 19,57 17,82 15,27
2013 19,10 17,38 14,89

The change of the market-extensive, intensive, crossed
100 * 1 1
1
|
|
.
|

\
|
=

n
n
Y
Y
R
, where:
Y n- the sales volume in the year 2013;
Y 1- the sales volume in 2011;
n - the number of years taken into consideration

R = -6 => a decrease by 6% of the volume of sales.

Each company is interested in strengthening its market position to increase the sales
volume and possibly its share in the market. In this respect they will address concerns
regarding the coverage gap between the actual market and the potential market .

Development of a market can be :
- Extensive ( by attracting new buyers for products or among nonconsumatorilor
relative or among customers of competing companies ) ;
- Intensive ( by increasing your shopping medium / average consumption per unit of
consumption ) ;
- Mixed ( a combination of the above two , which is the most effective ) ;
Based on the data on the volume of sales for beer and the number of current customers
(effective), we determined an average consumption of 113 l and 110 l 2012 2013.
Extensive change= (14.89 million person - 15, 27 thousands)*113l/cons =-0.42
million hl.
Intensive change = ( 140l/cons-113l/cons . ) * 15.27 mil.pers = 0.20 million hl .
Mixed change = (14.89 to 15.27 ) ( 140l/cons-113l/cons ) = -0.01 million hl .
Distribution:
Like previously mentioned, beer sales in Romania is realized manly through retail. By
analyzing the year of 2012, we arrive to the following conclusions: 33% of the sales were
done through the Horeca segment, while 67% of the sales were done through retail, as
represented here:
- 13,8 % hypermarkets
- 27,8% supermarkets
- 17,1% large shop chains
- 8,3% corner shops and smalls stores
Retail on the beer market is characterized like this:
- 52,3% sales of beer on PET (with an increase of 0,7% compared to 2012)
- 26,3% sales of bottled beer (with a decrease of 1,9% compared to 2012)
- 17,1% sales of canned beer ( with an increase of 1,3 % compared to 2012)

Price:
Regarding the price segmentation, we can identify 3 major categories:
-premium, with a variation of price/liter of beer ranging between 4.5 and 30 RON; here are
included the following brands of beer: Heineken, Edelweiss, Gosser, Stella Artois, Pilsner,
Guiness, Killkenny, etc.
-mainstream, with a price variation ranging between 2,7 and 4,49 RON, this category includes
the following brands: Becks, Carlsberg, Peroni, Golden Bru, Timioreana, Ursus, etc.
-economical, with a price variation ranging between 1,6 i 2,69 RON, this category includes:
Bucegi, Burger, Ciuc, Silva.
The monthly price variation of prices in 2013 on the beer market is represented in the
following table:

January February March April May June
100,31 100,11 100,23 100,23 100,12 100,01
July August September October November December
99,98 100,19 100,08 100,03 100,11 100,06

The increase in prices is caused mainly by inflation, but also to the increase in the
price of fuel. The month of July is marked by a decrease of the price indicator of beer, caused
by aggressive discount campaigns led by producers.
The average increase of prices on the whole year, based on data from IPC, is one of
1,45%.
From the large number of beer brands on the local market (30), the top five - Tuborg,
Bergenbier, Ursus, Skol, Beck's - focus, during October-December 2012, almost half of the
effort on promoting on shelf (44, 7%, PRPs). Interestingly, from the top is missing
Timioreana, leader of the market, which in the mentioned period was not very active in the
area of promotions.
Unlike other markets, the impact of promotions is lower in the case of beer. Thus,
almost two-thirds of consumers have preferences of brands which wont be changed by
certain promotions. Moreover, fewer than one in five (18.5%) last purchased beer because it
was on promotion. It is possible that this is caused by the fact that this product is mainly
bought through traditional trade in many situations where consumers are less exposed to such
campaigns.
Beer will know a growth on the market share of alcoholic beverages based on the
following considerations:
-providing household demand in summer, when the product reaches the highest demand,
particularly in the south, where the average temperature is higher;
-the increase inthe purchasing power of consumers strongly affected by the economic crisis;
During this period, beer consumption was affected and as it does not represent a basic need of
the population;
-another beer market growth factor is the involvement of manufacturers in the supply of
outlets, such as: the use of production capacity to a greater extent, to ensure continuity of the
sale of beer and granting of commercial loans to larger network outlets. Another measure used
to boost sales would be to increase marketing budgets.

Biography:
http://www.romaniatv.net/
http://www.berariiromaniei.ro/
http://www.wall-street.ro/
http://www.ziare.com/