Development in 2018

The Baltic market continued to be volatile in 2018. Beer consumption declined as alcoholic beverage sales in both Latvia and Lithuania were negatively affected by legislative changes such as increased excise duties, advertising ban and packaging restrictions. Beer consumption is estimated to have shown a decline of about 6% in 2018 and Royal Unibrew is estimated to have maintained its market shares in beer, whereas it is estimated that we have gained market shares in the non-alcoholic segment.

Royal Unibrew’s volumes increased by 3% in 2018. As expected, soft drinks sales increased, whereas total beer products sales decreased as a consequence of the declining beer consumption. Net revenue showed a 4% increase and was positively affected by the development in craft and specialty beer sales as well as soft drinks sales. Net revenue per volume unit for 2018 improved 1% to 2017 due to a changed product and packaging mix.

Many new products were launched during 2018 in both Lithuania and Latvia, focusing on the craft/specialty beer segment and the non-alcoholic beer and radlers assortment. An example of the new innovative products is the Kalnapilis Lite Radler. In the soft drinks segment, we have seen very good performance from a mix of products from the PepsiCo portfolio supplemented by local brand flavors. On the event side in Latvia, Royal Unibrew refreshed over 50,000 enthused consumers during the Positivus Festival – a festival presenting a large number of artists from the Baltic.

 

BALTIC COUNTRIES

	2018	2017		2018	2017
	Q1-Q4	Q1-Q4	% changes	Q4	Q4	% changes
Volume (thousand hectoliters)	2,328	2,260	3	519	528	-2
Net revenue (mDKK))	726	696	4	161	158	2

 

Profile

Royal Unibrew is a significant beverage provider in the Baltic countries, and we offer a combination of own strong national brands as well as international Heineken and PepsiCo brands.

Our brewery business Kalnapilio-Tauro Grupe is the second largest in Lithuania with the national beer brands Kalnapilis and Taurus, the Vilkmerges craft beer brand as well as Faxe and Heineken as international brands. In the soft drinks category, our offerings comprise Cido, which is the second largest fruit juice brand, PepsiCo products and Kalnapilis Norte in waters.

The Cido Grupa in Latvia is the second largest beverage provider in Latvia. We offer a complete portfolio of fruit juice products under the Cido brand, mineral water under the Mangali brand and nectar drinks under the Fruts brand as well as PepsiCo soft drinks. Our beer offerings comprise the national beer brands Lacplesa Alus and Livu Alus, the Lielvardes craft beer brand as well as Heineken as an international brand.

The primary brands in Estonia are Cido and Pepsi in the soft drinks category as well as Meistriti Gildi, Faxe and Heineken in the beer category.

Royal Unibrew has two production facilities in the Baltic countries – one in Lithuania producing beer, and in Latvia one producing soft drinks.

Sales are made business-to-business, and distribution is made directly to the individual Off-Trade and On-Trade customers from own terminals.