New Generation
THE WORLD OF HEINEKEN
Spanning the continents of Europe and Asia with a population of
145 million, the Russian Federation is the epitome of the drinks
industry's Wild East. Despite years of spectacular growth,
Heineken still expects the Russian beer market to grow by 5.5%
to over 89 million hectolitres in 2005, and has built a strategic
broad base of premium international and local brands with
growing geographical reach to succeed in this frontier market.
Russia is the world's fifth-largest beer market - after China, the US,
Germany and Brazil. Salary levels may seem low relative to Western
European levels, but expences on rent, heating and so on are still low and
Russians spend as much as 60% of their disposable income on food and
drink.
This growth in disposable Incomes has resulted in a shift in consumer
preferences away from basic necessity foods; beer consumption has
doubled in the past five years as many drinkers turn from hard spirits such
as vodka to softer brews such as lager, stout and bitter.
The country's US $7 billion beer market is growing by at least 5% a
year. The surge in beer sales follows a ban on drinking vodka and other
strong liquor in public - beer is classified as a refreshment - as Moscow
tackles Russia's hard-drinking culture. But it has partly been the result of an
increase in advertising; a large part of Russia's annual advertising
expenditure is spent on beer commercials.
The result is rising desire for and sales of high-end Russian and Western
brews. "Russians have more and more money and they want to spend it,"
Heineken's Chief Financial Officer Rene Flooft Graafland has declared. "The
younger generation is living a completely different life to the one their
parents led, and they want more and more to identify with national and
international beers they like."
Bars, restaurants and hotels are being refurbished and opened, not just
in the Big Two metropolitan areas of Moscow and St. Petersburg, but across
the Federation. Leisure facilities that were almost completely absent are
developing quickly with new bowling alleys, multi-screen cinemas and
water parks.
THE SLEEPING
