Stronger purchasing power boosts premium beer sales

Catalin Ignat, marketing manager with United Romania Bereprod Breweries, a licensed producer of Tuborg and Carlsberg brands, says the company has doubled its exports each year since 2004 and is banking on an upward trend after integration, too.
“Following the elimination of custom duties starting 2007, some new import brands will penetrate the Romanian market more easily, with Romanian exports to the EU to be also facilitated.
“As for us, we have been taking some big steps in this direction for several years and we plan to retain the position of Romania’s biggest exporter of premium beer next year,” stated Catalin Ignat.
According to company data, starting 2004, URBB has doubled its exports each year. From a 3.6% weight in turnover in 2004, exports have gradually come to contribute more to turnover, 7.5% in 2005.
In 2006, volumes delivered abroad will account for 15% in the company’s turnover, and for 2007 the company is banking on a 30% rise in exports, to 20% of turnover.
URBB annually brews around 1.2 million hectolitres of beer, which means some 180,000 hectolitres of beer made in the brewery of Pantelimon will be headed to foreign markets this year.
All the 4 brands produced domestically (Skol, Holsten, Tuborg and Carlsberg) are also exported. Tuborg and Holsten are exported to the Republic of Moldova.
For Skol, the company has contracts in Hong Kong and in the Republic of Moldova and is currently in talks with the US, while Carlsberg is exported to Bulgaria and Serbia. URBB also has Guinness and Kilkenny brands in its portfolio, both imported and sold on the Romanian market.
Each product has its own role and position in the portfolio. “Strategically, we are present on the market only with international and well-known brands,” explained the marketing manager. Amid export growth and the rising beer consumption in Romania, URBB is expecting a 30% sales increase year-on-year for 2007 and a 35% higher turnover.
Beer consumption per capita in Romania currently stands at 64 litres, but URBB’s marketing manager believes EU integration will influence beer consumption as well. “We estimate growth to 80 litres per capita, to the level of the European average,” adds Ignat.
URBB saw sales advance by 20% in terms of volume during the January-September period, against the same period of last year. Ignat says the advance was largely triggered by the trend of the premium and super-premium beer segment.
“An important growth driver is Romanian consumers’ stronger preference for premium beer brands amid the rising purchasing power. This trend is going to maintain on the beer market,” believes Catalin Ignat.
The company plans to double production capacity by 2011, to 2.3 million hectolitres per annum.

URBB
Has doubled exports each year since 2004
From 3.6% in turnover in 2004, exports came to weigh 7.5% in turnover in 2005
For 2007 expects 30% exports increase, to 20% of turnover
In January-September period of 2006 registered 20% bigger sales compared with the same period of last year
Growth was largely triggered by the premium and super-premium beer segment