PET goes draught: take home draught beer boosts regional brewers

Prohibition breeds ingenuity. After the ban on kiosk sales of alcohol, some ingenious entrepreneurs invented a specialised retail channel which holds the middle ground between the on-premise and the off-premise. Called “Draught In Off-Trade” (DIOT) it serves beer straight from kegs into PET bottles for shoppers to take home.

The DIOT boom was made possible by a homegrown invention: the Pegas beer filler by company NPM from Novosibirsk, which fills PET (and other containers) quickly and foam-free.

These DIOT outlets are either stand-alone pavilions, or shop-in-shop formats in supermarkets. But their most popular incarnation is outlets on the ground floor of Soviet time apartment blocks, which offer anything from 25 to over 100 different draught beers.

The country’s major brewers initially dragged their feet when it came to selling their beers through the DIOT channel. Not so the country’s regional and small brewers. Their number has risen to an estimated 1,000 in 2017 from 700 in 2016 on the back of their entering into the DIOT channel in droves. Euromonitor thinks that the DIOT is the regionals’ main distribution channel, accounting for almost half of their sales.

Insiders reckon there are over 30,000 so-called beer shops across Russia. There are even chains of beer shops to be found. They are hugely popular because they are very conveniently located, and have on site a variety of usually fresher, tastier beers than the PET offerings in the modern trade.

Shoppers need to buy empty plastic bottles (including some super-sized ones), which they then have filled to take home. Cleverly, the beer shops thus partially circumvent the legislation that prohibits the sale of beer in PET containers of more than 1.5 litres.

Trade data indicate that the beer shops and the Keg-to-PET shops (they offer fewer taps than the former) combined accounted for 13 percent of volume sales in 2016, up from five percent in 2010. There is an argument that the convenient locations and the wide availability of fresh beer could potentially boost the channel’s share further.

However, there is a catch. In an effort to clamp down on alcohol consumption, some regional authorities are looking to introduce limitations for selling draught beer on the ground floors of apartment blocks. This being Russia, beer shop owners suspect that there is foul play at work and have accused big trade networks of lobbying for the trade restrictions.

According to Euromonitor, Russians drank 77 million hl beer in 2016, down from 103 million hl in 2011. Per capita consumption of beer is estimated between 52 litres and 58 litres. Euromonitor expects beer volumes to fall to 69 million hl by 2021.

In value terms the Russian beer market was worth USD 7.9 billion in 2016, sharply down on the USD 12.2 billion generated in 2011 amid economic and regulatory turmoil and high illicit sales.

The country’s top three brewers – Carlsberg, AB-InBev/Efes, Heineken – account for 71 percent of the beer market. In terms of market shares, Carlsberg has 31 percent, AB-InBev/Efes 26 percent, Heineken 14 percent and the independents 29 percent.