Recent Developments in Turkey's Beer Market
By John G. Rodwan, Jr.
Slowing Output
Turkey's beer production in 2000 was slightly less than its output five years earlier. It achieved strong growth in 2000 following two consecutive years of sizeable declines. In 2000, 6.90 million hectoliters of beer were produced in Turkey, off slightly from the 6.95 million hectoliters brewed there in 1995. Although Turkish beer production increased by 3.1% in 2000, the market was essentially flat for over the five years from 1995 to 2000.
Table 1
TURKEY'S BEER MARKET
Volume & Change
1995 – 2000
Thousands of Thousands of
Year Hectoliters Barrels % Change
1995 6,946.0 5,915.3 --
1996 7,382.0 6,286.6 6.3%
1997 7,448.0 6,342.8 0.9%
1998 7,131.0 6,072.9 -4.3%
1999 6,695.0 5,701.5 -6.1%
2000 6,903.0 5,878.7 3.1%
Five-Year CAGR -0.1%
Source: Beverage Marketing Corporation
Although Eastern Europe's importance as a brewing region has increased recently, Turkey has not contributed to its expansion. The markets of Eastern Europe produced roughly one-quarter of Europe's beer in 1995. By 2000, they accounted for more than more than one-third. Eastern European beer production advanced with a five-year compound annual growth rate (CAGR) of 8.3%, while the overall European market's CAGR from 1995 to 2000 was just 1.9%. In 1995, Turkey brewed 6.4% of Eastern European volume, 1.6% of total European output and 0.6% of the world's beer. It shares have declined since then. Its 2000 output represented 4.2% of the beer produced in Eastern Europe, 1.4% of all European beer and 0.5% of global beer volume.
Table 2
EASTERN EUROPEAN BEER MARKET
National Production, Compound Annual Growth Rates (CAGRs) & Share
1995 – 2000
Thousands of Hectoliters CAGR Share of Volume
1995 2000 1995/00 1995 2000
Russian Federation 21,335.0 54,900.0 20.8% 4.9% 11.5%
Poland 15,154.0 24,000.0 9.6% 3.5% 5.0%
Czech Republic 17,687.0 17,916.0 0.3% 4.1% 3.8%
Romania 8,558.0 12,097.0 7.2% 2.0% 2.5%
Ukraine 7,013.8 10,270.0 7.9% 1.6% 2.2%
Hungary 7,678.0 7,300.0 -1.0% 1.8% 1.5%
Turkey 6,946.0 6,903.0 -0.1% 1.6% 1.4%
Yugoslavia, Fed Rep of 5,448.0 5,750.0 1.1% 1.3% 1.2%
Slovakia 4,369.0 4,500.0 0.6% 1.0% 0.9%
Bulgaria 4,737.0 4,115.0 -2.8% 1.1% 0.9%
Croatia 3,167.0 3,857.0 4.0% 0.7% 0.8%
Slovenia 2,100.0 2,500.0 3.5% 0.5% 0.5%
Belarus 1,518.0 2,370.0 9.3% 0.3% 0.5%
Lithuania 1,080.0 2,146.0 14.7% 0.2% 0.5%
Bosnia and Hercegovina 180.0 1,100.0 43.6% 0.0% 0.2%
Estonia 492.0 958.0 14.3% 0.1% 0.2%
Latvia 613.0 854.0 6.9% 0.1% 0.2%
Macedonia, Fmr Yugo 620.0 660.0 1.3% 0.1% 0.1%
Cyprus 340.0 450.0 5.8% 0.1% 0.1%
Malta 180.0 90.0 -12.9% 0.0% 0.0%
Albania 109.0 45.0 -16.2% 0.0% 0.0%
Moldova, Republic of 0.0 0.1 -- 0.0% 0.0%
Eastern Subtotal 109,324.8 162,781.1 8.3% 25.2% 34.1%
Others 324,519.0 314,095.0 -0.7% 74.8% 65.9%
EUROPE TOTAL 433,843.8 476,876.1 1.9% 100.0% 100.0%
Source: Beverage Marketing Corporation; Productschap voor Gedistilleerde Dranken/Commodity Board for the Distilled Spirits Industry (Netherlands); Joh. Barth & Sohn GmbH & Co.; S.S. Steiner
Increasing Consumption
Turkey ranks as one of the biggest beer consuming nations in Europe despite relatively low per capita consumption. The nation of 65.7 million people imbibed more than 11 million hectoliters of beer in 2000, or about one-eighth of what Germany's 82.8 million residents consumed. From 1995 to 2000, Turkey increased its beer intake by more than 4 million hectoliters, upping per-person consumption by more than 50%. This occurred even though Turkey decreased its production slightly during the same period. The tenth largest beer-drinking nation in Europe was not among the top-ten producers.
Although Turkey's per capita intake increased at an exceptional pace during the 1990s, its level in 2000 (16.8 liters per person) remained far below the global average (22.7 liters). In terms of per capita consumption, Turkey resembles China more than many of its European neighbors. Chinese per capita beer consumption increased from 12.7 liters in 1995 to 16.1 liters in 2000.
Table 3
EUROPEAN BEER MARKET
Leading Countries' Consumption and Compound Annual Growth Rates (CAGRs)
1995 – 2000
Thousands of Hectoliters CAGR Liters Per Person
Countries 1995 2000 1995/00 1995 2000
Germany 111,260.0 103,910.7 -1.4% 135.9 125.5
United Kingdom 59,059.8 56,773.9 -0.8% 100.9 95.4
Russian Federation 35,863.2 52,560.4 7.9% 24.2 36.0
Spain 26,106.5 28,717.6 1.9% 66.6 71.8
Poland 15,058.7 23,033.0 8.9% 39.0 59.6
France 22,701.5 22,604.6 -0.1% 39.1 38.1
Czech Republic 16,210.9 16,435.5 0.3% 156.9 160.0
Italy 14,529.8 16,195.2 2.2% 25.4 28.1
Netherlands 13,264.7 13,111.1 -0.2% 85.8 82.5
Turkey 6,777.4 11,032.0 10.2% 11.1 16.8
Top 10 Subtotal 320,832.5 344,374.2 1.4% 56.4 59.8
Others 914,008.9 1,035,180.2 2.5% 17.9 18.8
WORLD TOTAL 1,234,841.4 1,379,554.4 2.2% 21.7 22.7
Source: Beverage Marketing Corporation; Productschap voor Gedistilleerde Dranken/
Commodity Board for the Distilled Spirits Industry (Netherlands); Joh. Barth & Sohn GmbH & Co.
Brewer Activities
Two brewers – Efes Beverage Group (Anadolu Efes) and Turk Tuborg – account for most of Turkey's beer production. Efes enjoyed two consecutive years of double-digit volume growth, with its output reaching 7.3 million hectoliters in 2000. Its output stands higher than that of Turkey itself because the company also operates a brewery in Romania. The company's share of European beer production increased from 1.2% in 1995 to 1.5% five years later. Turk Tuborg is significantly smaller than the leading Turkish brewer. Its 2000 output was 1.6 million hectoliters, or just 0.3% of European volume. However, the brewery has the capacity to produce 3 million hectoliters annually.
Developments in Turkey demonstrate both the increasing penetration of Western European brewers into Eastern markets and the generally tendency of brewers to pursue growth beyond national borders.
Carlsberg has become more active in Eastern Europe recently. In May 2000, Carlsberg A/S and Norway's Orkla formed Carlsberg Breweries A/S, which effectively merged the brewers' operations, thereby bolstering Carlsberg's presence in both Scandinavia and Eastern Europe. The deal with Orkla gave the Danish brewer an interest in Baltic Beverage Holding (BHH), which also has brewing facilities in Russia as well as the Baltic states. Carlsberg already owned a major portion of Okocim SA of Poland, Eastern Europe's second largest beer market. In 2001, Carlsberg gained controlling interest in Turk Tuborg in Turkey. The company held a small stake in Turk Tuborg that it increased to 50.01% in summer 2001 by acquiring 47.7% of total share capital from Yasar Holding (which retained 15%). Later in the year, Carlsberg acquired an additional 21.19% in Turk Tuborg from George Soros's Quantum Fund. Turk Tuborg currently holds a 23% share of the Turkish beer market (the largest Tuborg market outside Denmark), a share Carlsberg hopes to grow to 27% within five years.
In October 1999, Interbrew bought a 50% stake in the Efes Brewery in Romania from its Turkish parent group. Efes began brewing and distributing Miller Genuine Draft for the Turkish market in 2000.
Although major international brewers like Interbrew and Carlsberg have ties with the leading Turkish companies, some other important global players have no real presence in Turkey. Heineken, for example, has significant stakes in a number of Eastern European brewers but not with Turkish companies. Its activity in Eastern Europe includes partial ownership of companies in Bulgaria, Hungary, Macedonia, Poland and Slovakia. Anheuser-Busch's European activity is limited to Western markets (Ireland, Italy, Spain and the U.K.).
John G. Rodwan, Jr. (jrodwan@beveragemarketing.com ), is editorial director of New York-based research and consulting firm Beverage Marketing Corporation (www.beveragemarketing.com ) and co-author of the new edition of its Global Beer Report: A Worldview. Beverage Marketing Corporation, the leading provider of research, data and consulting to the global beverage industry, publishes a series of 35 annual reports on various segments of the beverage industry including bottled water, soft drinks, sports beverages, wellness drinks, beer, wine and spirits and more. For a full list of all Beverage Marketing reports, visit www.beveragemarketing.com/marketing5.htm or e-mail the Company at bevinfo@beveragemarketing.com .
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