E-Malt.com News article: 3393

Poland: SABMiller announced on 01 October 2004 that in recent months its subsidiary, Kompania Piwowarska, has undergone significant transformations. “We have significantly invested in our distribution and sales functions: headcount in the department has gone up by ca. 300 people. We have exerted efforts to improve our presence in the on-premise channel by, among others, signing contracts with numerous new outlets. We equip each such outlet with applicable equipment (benches, tables, umbrellas, refrigerators, draft dispense installations), which makes it a regular investment project and requires significant financial outlays, thus a properly thought through plan and logistics,” the company said.

“The approach to consumers in the context of individual brands building their images has also improved in its level of professionalism. By means of research we are trying to reach numerous different consumers in the most effective way. Our promotional campaigns aimed at supporting sales in selected regions nationwide receive detailed attention. And to do the above we have established a specialized function with a headcount of several dozen people, i.e. the National Trade Marketing, which, using sophisticated data and research results can in an efficient and rational way manage our brands at points of purchase.” The Marketing Department is headed by Vice-President Blain Rowlette, formerly Managing Director of Finlandia Vodka in Poland.

At the same time SABMiller has increased its efforts to improve the presence in hypermarkets thanks to which its share in that sales segment rocketed from 18% to 25% within the last 9 months.

Kompania Piwowarska’s sales enjoy major growth also from efficient brand management. Żubr brand’s volume experienced massive growth of several hundred percent and now holds over 5% of the Polish beer market. At the same time change of the label (refreshed logo) and launch of the green bottle for Lech brand has given us a ca. 30% sales growth of that brand vs. last year (currently Lech brand’s market share stands at 4.5% of the Polish beer market).

Kompania Piwowarska’s year to date overall sales growth dynamic (including Dojlidy Brewery as of May 2003) has shown a 7.3% increase (it sold 4.5 million hl) and is the best result in the Industry, which during the same period showed growth of a mere 0.6%. Subsequent summer months of July and August gave us more top sales growths with a similar momentum trend.

In the current financial year, i.e. by end of March 2005 the brewery plans to exceed the threshold of 10 million hl and become the leader on the Polish beer market. Even now sales results in July and August indicate that Kompania Piwowarska is becoming clear leader as far as the volume of beer sold on the market. Kompania Piwowarska’s flagship TYSKIE Gronie brand is the biggest Polish beer brand (according to AC Nielsen which excludes the on-premise channel its market share is at 15.8%, while taking into account GUS (Central Statistical Office) data which includes all beer sales in Poland and not only in the off-premise channel, the share stands at 17.9%). This is over two times more than company competitor’s flagship brand and makes TYSKIE Gronie one of the biggest beer brands in Europe.

Kompania Piwowarska constitutes an important part of SABMiller: “we are the biggest company in the European structures of the corporation and at the same time we contribute a significant part of profit generated by SABMiller”. In the latest ranking made by “Polityka” magazine (“Polityka 500”) the brewery was No. 9 on the list of the most profitable companies in Poland. In “Rzeczpospolita’s” rating called “Polish Brands” in the group of the strongest brands Tyskie was ranked No. 2 while Lech No. 16 in the foodstuffs category.

Dojlidy Brewery’s current capacity stands at 1.2 million hl while other KP breweries (in Poznań and Tychy) have much higher capacity at 5-6 million hl each. This size is optimal for the brewery, ensuring proper cost rationalization.

In April Kompania Piwowarska commissioned Huppmann’s brewhouse, so far standing idle, which has nearly doubled brewery’s capacity. In recent weeks the brewery started two new capital projects in Białystok: (1) New bottling line with a 60 000 bottles per hour capacity; project cost PLN 46 million (2) New high storage warehouse with an area of 5 800 m sq.; project cost PLN 13 million. This financial year, i.e. by end of March 2005 Kompania Piwowarska plans, as KP, to exceed 10 million hl of beer sold.

Average real beer price over the past five years has gone down by 11 percent. To a large extent this came from the evolution of the biggest breweries’ brand portfolios. In Kompania Piwowarska’s portfolio the share of lower mainstream brands has significantly gone up as well. It is Żubr brand which represents this segment. Lower mainstream brands are high quality beers, but at a relatively inexpensive price. The market is also changing in such a way that over time more and more sales is generated by the on-premise channel (up from 26% in 2000 to 30% last year) and by big modern trade outlet chains (up from 7% to 14% over the same period). These increases are at the cost of small and independent food stores and following the changes breweries adjust their sales strategies accordingly.

The Polish market is also characterized by an extraordinary surge in the population of cans; one could actually claim that this is a trend countering many European countries, Germany in particular. In 1995 only 5% of beer was sold in cans; last year as much as 37%. At the same time in the growing on-premise channel less and less draft beer is sold: sales of draft beer sold in Poland tumbled down from 34% in 1995 to a mere 12% in 2003. This means that consumers go to pubs but often buy bottled beer. “We see this as an opportunity for some imported beers from the top shelf, like Miller Genuine Draft, which we import from the USA (its a unique beer brewed using cold filtered technology),” the company said.

Kompania Piwowarska has significantly changed its management processes. Currently the brewery is implementing a performance management system involving work management by precise goal setting. The system involves not only precise planning of individual and functional/organizational goals, but also performance measurement, setting individual career development programs, self-management, communication, job performance, superiors’ feedback, etc.

The Managing Director of Kompania Piwowarska has been Kar Lippert since 2003. Karl is 43 years old. He was born in Africa, and his mother tongue is German. Educated as an aeronautics engineer, he is a passionate beer lover, a pretty good golfer and a cigar expert.

He has been with SABMiller since 1992: he started as the right hand of a Regional Director, with time becoming a successful General Manager for SAB operations in Eastern Cape in South Africa. As from 2000 he was Sales and Distribution Director for Europe, and recently Managing Director of Dreher Sörgyarak in Hungary.

What future does Kompania Piwowarska’s Managing Director see for the beer industry?

“The future will bring us new challenges. We are facing an intensive development of modern trade and retail chains. In the future we will witness (and participate in) the increase of society’s wealth. This will make consumers spend less on consumption goods and more on durable goods, although by value the amounts will be higher. A cut of excise will be necessary, which will let us reduce beer prices; thus the brewing market will also change as far as competitiveness of our products against foreign beers”.


05 October, 2004