armenian alcoholic beverages market and industry …€¦ · armenian alcoholic beverages market...
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Yerevan, 2015
Avenue Consulting Group Strategy | Operations | Legal and Tax
Armenian Alcoholic Beverages Market and Industry Overview
Content
Why This Report is Prepared 3Armenian Alcoholic Beverages MarketOverview
4
Wine Production in Armenia 6Wine Consumption in Armenia 7Sparkling Wine Production in Armenia 8Sparkling Wine Consumption in Armenia 9Brandy Production in Armenia 10Brandy Consumption in Armenia 11Beer Production in Armenia 12Beer Consumption in Armenia 13Vodka Production in Armenia 14Vodka Consumption in Armenia 15
Whiskey Consumption in Armenia
16
Gin Consumption in Armenia 17Tequila Consumption in Armenia 18Rum Consumption in Armenia 19Some Interesting Stats 20Sources 22
This Report aims at presenting the structure of alcoholic beverages market of Armenia, and delineatingthe potential of the industry both from export potential and local market development points of view. Itwill serve as a base for deeper analysis of Armenian alcoholic beverages market development trends toreveal its opportunities for Armenian entrepreneurs and guide them in developing or starting theirbusinesses in alcoholic beverages market.
Moreover, the analysis of alcoholic beverages market might be useful for discovering changes inconsumers’ behavior, particularly in their preferences and their paying capacity.
This report includes the description of market structure, especially stressing alcoholic beverages, whichare not only imported, but also produced locally. It also highlights the trends of alcoholic beveragesimport and export and outlines the produced and consumed volumes since 2009 to 2013. Statistics forthe year 2014 are not complete yet, so they are presented only for those alcoholic beverages aboutwhich they are available.
All information presented in report is collected from National statistical service of the Republic ofArmenia, as well as from internal sources of Avenue Consulting Group. Statistics of vodka and cognac(brandy) production, export and import volumes taken from National statistical service of the Republic ofArmenia are figured based on recalculation of measurement unit "100% alcohol content“ into themeasurement unit of " 40% alcohol content“. Therefore there is some extent of approximation.
Why This Report is Prepared
3
Armenia is considered one of the ancient countries known its traditional recipes ofdifferent type of alcoholic drinks. The consumption of main alcoholic beverages(wine, sparkling wine, brandy, vodka, beer, whisky, rum, tequila and gin ) in 2013was more than 44 million liters or more than 245 million US dollars, which iscalculated by the equation
Consumption=Production+Import-Export (if other things equal).It is remarkable that vast majority of consumed alcoholic beverages are locallyproduced. Totally in 2013 in Armenia 56,5 million liters of alcoholic beverageswere produced, 11,8 million liters of them were imported, and 24 million literswere exported.**As statistics about whisky, gin, tequila and rum consumption for 2014 are not available yet, the alcoholicdrinks consumption volumes are presented for 2013.
**As statistics about sparkling wine for 2014 are not available yet, the volumes are presented for 2013.
Armenian Alcoholic Beverages Market OverviewAccording to “spyur.am” business directory, there are 52 alcoholic beverage producers in Armenia, from which
• 18 still light wine producers
• 2 sparkling wine producers
• 13 vodka producers
• 14 brandy producers
• 5 beer producers
Product
2014 January-December
produced (1000 liters)
imported (1000 liters)
exported (1000 liters)
The average retail price (AMD)
(for 0.7l)Wine 6,131 252 2,130 1,780 (0.7l)
Sparkling wine** 634.4 184.1 40.3 -Brandy 9,502 114 18,096 5,551 (0.5l)Vodka 18,726 9,246 2,599 1,375 (0.5 l)Beer 23,717 2,838 1,988 379 (0.5l)
4
Armenia imports wine, vodka, gin, tequila, whisky etc. Local production of wine, vodka, beerand brandy are rather developed and consumers mainly use those of local production. As perwhisky, tequila or gin the whole market is occupied by imported goods. Alcoholic beverages aremanly imported from Russian Federation, Spain, Ukraine, Georgia and Finland.
Armenia also exports alcoholic beverages. Russian Federation is the major export market forArmenian producers of alcoholic beverages(in 2013, 80% of all exported beverages). It showsthat Armenia’s export of alcoholic beverages geographically has high level of centralization.
Armenian Alcoholic Beverages Market Overview
Product
2013. January-Decemberproduced
(1000 liters)
imported (1000 liters)
exported (1000 liters)
Wine 6,422 354 1,393Sparkling wine 536 184 40
Brandy 20,284 30 18,304Vodka 9,906 8,374 1,932Beer 19,848 2,730 2,346
72,70 100,60
137,30 174,00
212,90
42,1 52,6 47,5 53,7 56,6 -
50,00
100,00
150,00
200,00
250,00
2009 2010 2011 2012 2013
Total alcoholic beverages import-export from Armenia in million US dollars
Beverages export
Beverages import
Since 2009, the export volumes of Armenian alcoholic beverages has registered CAGR of 24%, while the same indicator for import is only 6%.
5
Wine is among most popular alcoholic drinks in Armenia. Besides large-scale,traditional wineries there are many small wine makers, that produce wine not onlyfrom grapes but also from pomegranate, raspberry, etc.
During last 5 years the production volume of wine has increased by 20,6%. It isnoteworthy that the CAGR level of import for 2010-2014 was (-14,5%), while that ofexport was 18,2%, therefore during 2010-2014 the decrease of import was almostequal to increase of export.
Wine Production In Armenia
More than 6000 years history of wine production.
The CAGR of wine production growth was 3.8% during 2010-2014.
According to “spyur.am” business directory, there are 18 local producers of wine (excluding large number of small producers, who produce wine at home). 5 084
6 178
5 714
6 422
6 131
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
2010 2011 2012 2013 2014
Wine production in 1000 liters
552 620 369 354 252
924 744 1 185 1 3932 130
2010 2011 2012 2013 2014
Wine import and export in 1000 liters
import export
6
During the period from 2010 to2014 the consumption of winehas decreased for 9,7%, whilethe average retail price hasgrown for 34,5%.
Wine Consumption In Armenia
The consumption of wine in Armenia as of 2012 was 1,63 liters per capita. For comparison, in France it is equal to 44 liters, and in Vatican which was considered as largest consumer of wine 72 liters.
Local wine market size is estimated at 26.1 million US dollars or 4.2 million liter in 2014.
The CAGR of wine consumption inArmenia was -2% during 2010-2014, while for average retail priceit is 6,1%.
1 323
1 315
1 669
1 746
1 780
0200400600800
1 0001 2001 4001 6001 8002 000
2010 2011 2012 2013 2014
The average retail price for 0,7l of wine (AMD)
4 711
6 054
4 898
5 384
4 252
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
2010 2011 2012 2013 2014
Wine consumption in 1000 liters
7
The production volume of sparkling wine has increased by 39% during last6 years. The average price of a bottle of sparkling wine of local productionas of February 2013 was 1,700 Armenian drams while concerning importedwines it varied from 2,000 to 210,000 Armenian drams.
Sparkling Wine Production in Armenia
The CAGR of sparkling wine production growth was 5.6% during years 2009-2014.
According to “spyur.am” business directory, there are 2 local producers of sparkling wine.
456
618 623
479536
634
2009 2010 2011 2012 2013 2014
Sparkling wine production volumes in 1000 liters
117 99 115184
127
5684
40
2010 2011 2012 2013
Sparkling wine import and export in 1000 liters
import export
8
The consumption of sparkling wine* in Armenia has grown for 1.1 timesand the majority of consumers prefer sparkling wine of local production. In2013 the consumption of sparkling wine was 680 thousand liters, of which536 thousand liters were the sparkling wine of local production.
Sparkling Wine Consumption in Armenia
The CAGR of sparkling wine consumption growth was 2,9% during 2010-2013
The export of sparkling wine during 2009-2013 was only 345 thousand liters.
Local sparkling wine market size is estimated at 3.9 million US dollars (1.8 million US dollars for imported sparkling wine and 2.1 million US dollars for the locally produced) or 0,68 million liter (0.5 million liters for locally produced sparkling wine and 0.18 million liters for the imported) million liters in 2013.
608
667
510
680
0100200300400500600700800
2010 2011 2012 2013
Sparkling wine consumption in 1000 liters
*The statistical data for 2014 about sparkling wine is not available yet.
9
The modern history of Armenian brandy started in 1887, when the firstguild merchant Nikolai Tairov build the first brandy factory in the place ofancient Yerevan fortress.
During 2010-2014 years the production volume of brandy has increased by48,3%. However, in 2014 the volumes of brandy production have a littledecreased comparing with 2013.
Brandy Production in Armenia
The CAGR of brandy production was 8.2% during years 2010-2014, for brandy export – 10.4% and import – 29.2%.
According to “spyur.am” business directory, there are 14 local producers of brandy.
During 2010-2014 only 366,760 liters of brandy was imported, in comparison with the 78,216,160 liters of its export.
12 624
15 342
18 481
20 285
18 726
0
5 000
10 000
15 000
20 000
25 000
2010 2011 2012 2013 2014
Brandy production in 1000 liters
11 041
13 494
17 282
18 304
18 096
0
5 000
10 000
15 000
20 000
2010 2011 2012 2013 2014
Brandy export in 1000 liters
10
Brandy consumption in Armenia during2010-2013 has increased by 10%.Considering that NSS of RA does nottake into account the specificities ofbrandy manufacturing process, theconsumption statistics are based oninternal sources of Avenue ConsultingGroup.
Particularly the NSS of RA does notconsider that the whole producedvolume of brandy is not sold during ayear but during several years. AvenueConsulting Group has considered thisfact and revealed the market size.
During the period 2010-2014, theaverage retail price has grown for 42%.
Brandy Consumption in Armenia
The CAGR of brandy consumption was 2,4% for the period of 2010-2013.
The CAGR of brandy average retail price growth was 7,2% for the period from 2010-2014.
Local brandy market size is estimated at 48,5 million US dollars or 1,8 million liter in 2013.
3 914
4 785
5 247
5 336
5 551
01 0002 0003 0004 0005 0006 000
2010 2011 2012 2013 2014
The average retail price for 0,5l of brandy (AMD)
1 694
1 757 1 836
1 861
1 600 1 650 1 700 1 750 1 800 1 850 1 900
2010 2011 2012 2013
Brandy Consumption in 1000 liters
11
During 2010-2014 the production volume of beer has increased by 54,5%. The CAGR for theperiod is 9,1%. According the pictures presented below, the import volumes have decreasedfor 40%. The CAGR for import is -9.6%.
The export volumes, contrary, have increased since 2010 for 1.4 times. The CAGR is 6,5%.
Beer Production in Armenia
CAGR (2010-2014)
•Beer production 9,1%
•Import – (-9,6%)
•Export – 6,5%
According to “spyur.am” business directory, there are 5 local producers of beer.
15 353
14 744
13 668 19 848
23 717
-
5 000
10 000
15 000
20 000
25 000
2010 2011 2012 2013 2014
Beer production in 1000 liters
4 691 3 299
2 262 2 730 2 838
1 450
1 742 2 795 2 346 1 988
2010 2011 2012 2013 2014
Beer import and export in 1000 liters
import export
12
In 2014 beer consumption volumes has increased for 32% in comparison with 2010,reaching 24,5 million liters. During the same time the average retail price hasincreased only for 24%.
The vast majority of total consumed quantity is beer of local production. The mostpopular brands are Kilikia, Gyumri and Kotayk.
Beer Consumption in Armenia
The CAGR (2010-2014)
•Consumption – 5.7%
•Retail prices – 4,4%
In 2012, in Armenia the beer consumption per capita was 4.4 liters. In Czech Republic, which is the largest beer consumer in the world this indicator was 158.6 liters, in Russia 58.9 liters.
Local beer market size is estimated at 44,8 million US dollars or 24,5 million liter in 2014.
18 594
16 301
13 135
20 232
24 566
0
5 000
10 000
15 000
20 000
25 000
30 000
2010 2011 2012 2013 2014
Beer consumption in 1000 liters
305
305
333
362
379
-50
100 150 200 250 300 350 400
2010 2011 2012 2013 2014
The average retail price for 0,5l of beer (AMD)
13
During last 5 years the production volume of vodka has decreased by 20%. The CAGR ofproduction volumes during 2010 -2014 is -4.4%.
The import volumes has registered a growth during 2010 – 2014. The CAGR for thementioned period is 7.1%.
Vodka’s export has grown for 26.8 times since 2010. The CAGR for the period of 2010-2014is 93.1%.
Vodka Production in Armenia
CAGR (2010-2014)
•vodka production –(-4.4%)
•Import – 7.1%
•Export – 93.1%
According to “spyur.am” business directory, there are 13 local producers of vodka.
11 886
9 106
10 069
9 906
9 502
-
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2010 2011 2012 2013 2014
Vodka production in 1000 liters
6 571 6 248 8 103 8 374 9 246
97 642 1 514 1 932 2 599
2010 2011 2012 2013 2014
Vodka import and export in 1000 liters
import export
14
Vodka is the biggest spirits category in Armenia and is seen as an everyday product.Flavored vodkas have slowed down after initial interest by consumers. Nevertheless,the volumes of vodka consumption have decreased since 2010 reaching the level of16,149 thousand liters in 2014 from 18,359 thousand liters in 2010.
The average retail prices of vodka have registered a growth.
The most popular brands among the consumers are those of local production, that arefollowed by Finlandia, Belenkaya,Cristall Premium.
Vodka Consumption in Armenia
The CAGR (2010-2014)
•Consumption – (-2.5 %)
•Retail prices – 2.4%
In 2012, the consumption of vodka per capita was 5.6 liters. The world’s number one consumer of vodka Russia consumed in 2012 10 liters of vodka per capita.
Local vodka market size is estimated at 107,1 million US dollars or 16 million liter in 2014.
18 359
14 712
16 658
16 349
16 149
0
5 000
10 000
15 000
20 000
2010 2011 2012 2013 2014
Vodka consumption in 1000 liters
1 221 1 350
1 369
1 379
1 375
1 100 1 150 1 200 1 250 1 300 1 350 1 400
2010 2011 2012 2013 2014
The average retail price for 0,5l of Vodka (AMD)
15
Consumption volumes of whisky in Armenia has grown for 1.6 times since2009. In 2013 Armenians have consumed 182 thousand liters of whisky. Asthere is no whisky production in Armenia, the whole amount is imported.The average price of whisky as of February 2013 was 30,000 Armeniandrams. The price varied according to brands starting from 4,000 Armeniandrams to 240,000 Armenian drams.
Whisky Consumption in Armenia
The CAGR of whisky consumption in Armenia for the period of 2009-2013 was 13%.
Whisky is mainly imported from US, Canada and UK.
Local whisky market size is estimated at 13,1 million US dollars or 182 thousand liter in 2013. 2%
8%6%
56%
28%
Whisky import to Armenia shares in 2013
France
Ireland
India
United Kingdom
USA
112 109 124
171 182
2009 2010 2011 2012 2013
Whiskey Consumption 1000 liters
16
The volumes of consumption of gin in Armenia has grown twice since 2009.The consumption of gin in Armenia was equal to 13.5 thousand liters. As incase of whisky, there is no gin production in Armenia, so the wholequantity is imported The average price of gin as of February 2013 was7,000 Armenian drams.
Gin Consumption in Armenia
The CAGR of gin consumption for the period of 2009-2013 was 18.9%.
Local gin market size is estimated at 230 thousand US dollars or 13.5 thousand liter in 2013.
1%
57%27%
1%14%
Gin import to Armenia shares in 2013
Canada
France
Spain
United Kingdom
USA6,75
9,00 11,25 11,25
13,50
2009 2010 2011 2012 2013
Gin Consumption in 1000 liters
17
Tequila is one of least popular beverages in Armenia. However, itsconsumption has grown for 2.8 times since 2009 with CAGR equal to 29.4%.The whole consumed quantity is imported as there is no local production oftequila. The price for tequila as of February 2013 was varying from 5,100Armenian drams to 34,500 Armenian drams. In Armenia is mainly consumedMexican production tequila.
Tequila Consumption
The CAGR of tequila consumption for the period of 2009-2013 was 29.4%.
The whole market is occupied by imported tequila.
Local gin market size is estimated at 1.2 million US dollars or 31.5 thousand liter in 2013.
11,313,5
2729,3
31,5
2009 2010 2011 2012 2013
Tequila consumption in 1000 liters
18
Rum also is not considered popular beverage in Armenia. Its consumptionhas grown for 2.3 times since 2009 reaching 36 thousand liters in 2013. Thewhole consumed quantity is imported as there is no local production ofrum. The price for rum as of February 2013 was varying from 6,200Armenian drams to 23,200 Armenian drams.
Rum Consumption in Armenia
The CAGR for the period of 2009-2013 was equal to 23%.
Local rum market size is estimated at 860 thousand US dollars or 36 thousand liter in 2013.
11%8%
77%
4%
Rum import to Armenia shares in 2013
Cuba
UnitedKingdomUSA
Other countries
15,8
22,5 24,8
31,536
2009 2010 2011 2012 2013
Rum Consumption in 1000 liters
19
Some Interesting Stats
25%
17%15%12%
31%
Wine Import Structure by origin
FrenchMoldovanChileanGeorgianOther
84%
16%
Sparkling wine consumption shares by origin
ArmenianOther
58%26%
2%
14%
Whisky consumption shares by quality
ScotchAmericanCanadianIrish
23%
77%
Sales shares by Gin type
PremiumStandard
20
Some Interesting Stats
88%
13%
Beer consumption shares by origin
Armenian
Imported50%
15%
24%
10%1%
Vodka sales by brand type
LocalStandardValueLow priceOther
57%43%
Tequila consumption shares by type
WhiteGold
49%
9%14%
28%
Rum sales by brand type
WhiteDarkFlavouredOther
95%
5%
Brandy consumption shares by origin
ArmenianImported
21
● Reports of national statistical service of republic of Armenia
● Spyur.am business directory
● Internal sources of Avenue Consulting Group
● UN Comtrade Database
Sources
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