Beer in Poland

Euromonitor International November 2014

BEER IN POLAND P a s s p o r t I

LIST OF CONTENTS AND TABLES

Headlines ...... 1 Trends ...... 1 Production, Imports and Exports ...... 4 Competitive Landscape ...... 4 Prospects ...... 7 Category Background ...... 8 Lager Price Band Methodology ...... 8 Summary 1 Lager by Price Band 2013 ...... 9 Table 1 Number of Breweries 2008-2013 ...... 9 Category Data ...... 10 Table 2 Sales of Beer by Category: Total Volume 2008-2013 ...... 10 Table 3 Sales of Beer by Category: Total Value 2008-2013 ...... 10 Table 4 Sales of Beer by Category: % Total Volume Growth 2008-2013 ...... 11 Table 5 Sales of Beer by Category: % Total Value Growth 2008-2013 ...... 11 Table 6 Sales of Beer by Off-trade vs On-trade: Volume 2008-2013 ...... 12 Table 7 Sales of Beer by Off-trade vs On-trade: Value 2008-2013 ...... 12 Table 8 Sales of Beer by Off-trade vs On-trade: % Volume Growth 2008-2013 ..... 12 Table 9 Sales of Beer by Off-trade vs On-trade: % Value Growth 2008-2013 ...... 12 Table 10 GBO Company Shares of Beer: % Total Volume 2009-2013 ...... 13 Table 11 NBO Company Shares of Beer: % Total Volume 2009-2013 ...... 13 Table 12 LBN Brand Shares of Beer: % Total Volume 2010-2013 ...... 14 Table 13 Production, Imports and Exports of Beer: Total Volume 2007-2012 ...... 14 Table 14 Imports of Beer by Country of Origin: Total Volume 2007-2012 ...... 15 Table 15 Imports of Beer by Country of Origin: Total Value 2007-2012 ...... 15 Table 16 Exports of Beer by Country of Destination: Total Volume 2007-2012 ...... 16 Table 17 Exports of Beer by Country of Destination: Total Value 2007-2012 ...... 16 Table 18 Forecast Sales of Beer by Category: Total Volume 2013-2018 ...... 17 Table 19 Forecast Sales of Beer by Category: Total Value 2013-2018 ...... 18 Table 20 Forecast Sales of Beer by Category: % Total Volume Growth 2013- 2018 ...... 18 Table 21 Forecast Sales of Beer by Category: % Total Value Growth 2013- 2018 ...... 19

HEADLINES . In 2013, sales of beer suffer from a decline in volume terms by 2% to register 3.8 billion litres . Customers intensively search for added value . Unit price almost static due to divergent tendencies . Local breweries are on a growth spiral . Sales of beer are predicted to see a volume CAGR of 1% over the forecast period, reaching 4.1 billion litres in 2018

TRENDS . 2013 saw an intensified consumer search for value combined with raising aspirations of shoppers. Beers manufactured by regional breweries are in demand, as a part of shoppers are thirsty for products that symbolise naturalness, “back to roots”, authenticity, heritage, and meet the needs of aspirational consumers. Synergy generated through the mix of beer and lemonade also represents value for a growing number of consumers. New flavours are appealing to those who previously reluctantly reached for beer. Seeking value, Polish consumers tend to choose brands adjusted to various occasions and seasons of the year. The latter means that beer drinkers are more aware, and beer culture gets more sophisticated. An increasing number of shoppers started to show an interest in the content of beer, origin of ingredients from which beers are made, and methods of beer manufacturing. . Sales of beer suffered a decline in 2013, which means a worse outcome compared to the CAGR observed over the review period, both in value and volume terms. The unfavourable weather conditions with the long winter, and heat waves fuelled the summer tempered thirst for beer. The average temperature was 7.5°C in 2012, whereas it was equal to 6.4°C in 2013. The unfavourable economic situation was mirrored by the decline in consumer confidence levels, which also had a negative impact on beer sales. . Weissbier/Weizen/Wheat enjoyed the fastest growth in 2013. An increasing number of beer drinkers turn their attention towards more sophisticated variants of beer. This, in turn, translates into growing demand for niche beers, including Weissbier/Weizen/Wheat Beer. . Flavoured/mixed lager is another category showing fast growth in 2013. Mixed lagers managed to attract new consumers to beer sales. The introduction of mixed lagers contributed to changing the perception of beer. This, in turn, boosted the consumer base. Beer started to be consumed on new occasions. Finally, flavoured/mixed lager sales experienced the introduction of new product developments. . Unit prices were almost static in 2013. An economising trend manifested itself by growing sales of retail chain brands, alongside growing sales through discounters. Additionally, multipacks of four or six items, offered mainly in hypermarkets, supermarkets and discounters, continued to be highly popular amongst Polish shoppers. Beer packed in multipacks is about 10% to 15% lower in price in comparison to standard beer. On the other hand, manufacturers are forced to compensate the volatile prices of commodities. This, in turn, to some degree, exerts upward pressure on prices. . Economy lager sales showed 3% growth in volume terms as rising numbers of consumers turned to low priced products. This was attributable to the implications of the financial crisis, which influenced consumer confidence levels. In contrast, premium lager sales suffered a

decline. Imported premium brands did not manage to offer value that reflected their prices. To reverse this trend, producers followed a strategy of heavy price promotions. Premium brands including Heineken, Carlsberg and Grolsch can be found on the shelves of discounters. What is more, manufacturers offer premium beers in multipacks. For example, the Heineken brand is available in three items packs for PLN9. Standard lager, the largest category, suffered a decline, and drove total sales of beer down. The lower-end standard brands, including Zubr (Kompania Piwowarska SA), Harnas (Carlsberg Polska SA) and Tatra Pils (Grupa Zywiec SA) sustained the strong position of standard lager. . 47% of Poles drink beer. Middle-aged men are the majority of beer consumers. In line with growing emancipation of women, they started to drink more beer. Flavoured and mixed lagers are amongst the most favourable choices amongst women. Beer is perceived as a drink suited to less formal occasions. . 2013 saw a further shift by consumers towards discounters, but at a slower pace compared to the growth rate observed over the review period. Although discounters‟ store shelves are not a leading location of products from branded manufacturers, all leading players cooperate with the biggest discounter chain, Biedronka. Sustaining volume sales levels is the main reason behind maintaining co-operation with the Biedronka chain of discounters. In 2013, the premium-positioned brand Grolsch, filled the shelves of the Biedronka chain, and enjoyed double-digit growth. What is more, manufacturers develop products dedicated only to the Biedronka chain, for example, the Carlsberg Export brand. Producers also developed new sizes of beer for the chain Biedronka. For example, Zywiec, Tyskie and Lech are available in 0.55-litre cans. The second biggest chain of discounters, Lidl, made efforts to attract consumers with heavy price promotions. For example, the price of the Paulaner brand was PLN2.2, whilst the usual price for this beer was PLN3.5. Small grocery retailers are losing ground at the expense of discounters. However, manufacturers made efforts to raise their share on the shelves of small grocery retailers since they earn greater margins within this distribution channel. While supermarkets are gaining in importance, hypermarkets lost their momentum, due in part to the growth of discounters. . On-trade remains on a downward spiral. For one thing, when consumers‟ confidence declines, on-trade sales also suffer a decline. For another, the culture of spending time out of the home is underdeveloped in Poland, and in some respects, even saw deterioration over the review period. The Poles tend to drink at home or during outdoor gatherings with friends. Woes associated with the financial crisis resulted in a drop in consumer confidence. When consumer confidence declines, Polish consumers reduce their visits to and expenditure in on- trade establishments. This stems from the fact that the demand for beer is more elastic in the on-trade than the off-trade channel. What is more, Poles started to produce beer at home in order to replicate the on-trade experience. According to Polskie Stowarzyszenie Piwowarów Domowych, about 30,000 Poles are home brewers. This, in turn, steals consumers from on- trade establishments. Trade sources point to strong discrepancies between prices of beer within on-trade establishments and in off-trade outlets as a reason behind low on-trade sales. Additionally, a relatively apathetic/indifferent culture of eating or drinking outside the home is responsible for the declining level of popularity of on-trade establishments among Polish drinkers. . Convenience, highlighting of products‟ value, quality and safety, environmental friendliness, and consistency of product with packaging are the main criterion behind consumers‟ preferences, when choosing packaging types. 2013 witnessed further growth in the popularity of glass bottles. The declining trend in sales of glass bottles was stopped in 2010. Since then, the share of glass bottles has been on a growth spiral. This has been attributable to consumers‟ growing need for packaging made using eco-friendly and natural components.

Along with the increasing popularity of bottle glass, the importance of metal beverage cans fell. However, high popularity of canned beer is a European phenomenon. It is worth noting that 500ml cans dominate beer sales in Poland, while 330ml cans tend to lead across other European markets. In 2009, Grupa Zywiec introduced two of its major beer brands, Warka and Tatra Pils, in PET bottles. The brand Warka, offered in a 1.5-litre plastic bottle, has been relatively well received by consumers thanks to strong advertising support. Grupa Zywiec aimed the 1.5-litre PET-packaged Warka beers at consumers who drink beer at barbecues and social events. However, 1.5-litre PET-packaged beers gained moderate popularity amongst shoppers. Consequently, Warka in 1.5-litre PET bottles was withdrawn from sale. . 500ml returnable glass bottles grew in importance as a component of the deposit system in 2013. This stems from the growing popularity of beers from the portfolios of regional breweries. According to the domestic branch of Carlsberg, Poland is amongst European countries where the share of returnable glass bottle is medium, between 30-60%. Beer in returnable glass bottles is around 20-30% cheaper than beer offered in cans. . Lower calorie beer in not available for nationwide distribution at the time of writing. In 2007, the domestic branch of SABMiller introduced the Lech Lite brand. The new launch was unable to gain a good response from consumers, and was withdrawn from sale within a year. . Non-alcoholic beer as defined by Euromonitor International is an absolute niche at the time of writing. The growth in sales of beers between 0.5% and 3% ABV is attributable to fast growth of sales of mixed lager brands. . Flavoured lagers make up the majority of flavoured and mixed lager sales. The split between flavoured and mixed lagers is about 0.8:0.2. In 2013, regional breweries started to launch flavoured black beers. For example, the brewery Amber launched Grand Imperial Porter Chili. This black beer flavoured with chilli managed to gain a very good response amongst consumers . Beer manufactured by small, regional breweries, as well as homemade beers, are perceived as craft beers. Craft beers enjoyed healthy growth in popularity throughout the final years of the review period. Small breweries decided to change their strategic approach and focused on manufacturing high-quality beer some years ago. This strategy turned out to be successful. Nevertheless, sales of beer manufactured by small, regional brewers slowed down over the final years of the review period. According to the representative of the Association of Small Breweries, the pace of growth of sales of beer manufactured by small, regional breweries slowed down to 5% in 2013. This is due to woes associated with implications of the sovereign debt crisis in the Eurozone. Top fermented beers witnessed the fastest growth within beers offered by small breweries throughout 2013. Growing sophistication of beer consumption results in increasing interest in more niche products, including ale. What is more, regional beers grew in terms of availability. This stems from the fact that almost all nationwide retail chains extended their offer of regional beers. Browary Regionalne Jakubiak is an example of the successful business model among regional brewers. . Craft beers benefit from being managed and owned by the same person and have less time pressure and thus let an idea develop organically. They use their knowledge of local markets and consumers to get the edge on multinationals. Finally, these entities started to link with each other. For example, Browary Regionalne Jakubiak is owned by Marek Jakubiak. It developed products that were cutting edge for the market, including Ciechan Niepasteryzowane, and embraced three breweries located in Ciechanów, Lwówek Slaski, and Konstancin.

PRODUCTION, IMPORTS AND EXPORTS . Modern production facilities were behind the growth in beer production in Poland. Major manufacturers present in Poland invested heavily in production facilities. Poland became one of the biggest producers of beer in Europe. Trade sources stress that most of the large breweries use a high gravity method to produce beer. This means that production is highly efficient, although critics argue that it impacts taste. . The production capacity of the largest domestic brewery is operated in Tychy by Kompania Piwowarska, amounting to eight million hectolitres. The company‟s brewery in Poznan has a capacity of 7.5 million hectolitres, while its brewery in Bialystok is capable of producing 2.2 million hectolitres per year. The largest brewery belonging to Grupa Zywiec, the domestic division of Heineken NV, is located in Zywiec, in south Poland, and its production capacity amounts to 5.5 million hectolitres, with a total of 15.2 million hectolitres for the company. With a production capacity of 5.8 million hectolitres, the brewery in Brzesko is the largest in the hands of Carlsberg Polska. . The largest domestic player Van Pur manages about five breweries. The biggest breweries are located in Zabrze and Rakszawa both in south Poland, and have capacities of, respectively, 1.25 and 1.2 million hectolitres. . Local breweries have a range of production capacities, from 5,000 to 1.7 million hectolitres. The capacity of brewery Perla, located in Lublin, was increased by 0.7 million hectolitres in 2013, and reached 1.7 million hectolitres. A production capacity of one million hectolitres is available in the Cornelius and Namyslów breweries. On the other hand, very small breweries, Tarczyn, Zawiercie, Imielin, and Gosciszewo, have production capacities of 20,000 hectolitres. 2013 saw the establishment of 21 breweries, and only three went bankrupt. As a result, the number of breweries increased at the fastest pace within the review period. . Restaurant breweries, including Spiz, Bierhalle and Brovaria, have maximum production capacities of about 300-3,000 hectolitres annually. Beer manufactured by restaurant breweries is priced at around PLN15-20 per litre. . Domestic manufacture accounts for the predominant share of beer sales. Around 1% of the beer sold in Poland is imported. With Pilsner Urquell (Kompania Piwowarska SA) starting to be imported in 2011, the Czech Republic became one of the leading import markets, although Germany remained the most important. Following a rapid growth in sales of the Grolsch brand, imports from the Netherlands gained importance. . Ireland became the leading export destination due to the large Polish diaspora. Hungary and the Czech Republic are the main export destinations due to retail chains ordering the beers from, for example, the domestic manufacturer, Van Pur Sp zoo. . Export sales of beer manufactured by regional breweries started also to grow. This stems from the raising interest in craft beers worldwide. . An interesting trend in the production of beer is an increase of output of contract beers. For example, beer Mnich is manufactured under contract in the brewery in Grybów. Piwo Noteckie is manufactured by Browar Czarnków, and respectively Piwo Czarne by Browar Fortuna, Piwo Nakielskie Jasne by Browar Krajan, Piwo Wschowskie by Browar Edi, Piwo Laskie by Browar Koreb, Piwo z Ciechanowa by Browar Ciechan, Piwo Ksiazece z Lwówka by Browar Lwówek, and Piwo Pomorskie by Pomorski Browar Tradycyjny.

COMPETITIVE LANDSCAPE . The domestic division of SABMiller Plc, Kompania Piwowarska SA, remained the leading player in beer sales in 2013. The company benefits from the success of brands with a

domestic heritage, including standard Tyskie, lower-standard Zubr, and premium Lech. The second position is occupied by Grupa Zywiec SA. This stems from the premium positioned Zywiec brand, the lower standard brand Tatra, standard brand Warka as well as regional beer including Specjal, Lezajsk, Królewskie. Grupa Zywiec has the most extensive and diversified portfolio among the three biggest players, which encompasses around 30 beer lines. The domestic division of Carlsberg is ranked third due to the international Carlsberg brand, the lower standard Harnas brand, the Okocim umbrella brand, and range of regional beers. Domestic brands are leading products within the portfolios of the leading beer players. . Browary Regionalne Jakubiak is making waves in sales of beer. For one thing, the introduction of the Ciechan Wyborne beer was a turning point for unpasteurised beer sales. Following the success of the Ciechan brand, unpasteurised beers became popular, and filled store shelves. For example, the domestic branch of Carlsberg introduced the Kasztelan Niepasteryzowane beer, which proved to be very successful. The introduction of the Ciechan Miodowe also strongly contributed to growing interest in flavoured beers. The representative of Browary Regionalne Jakubiak claims that the maturation time of beers manufactured by multinationals is only two or three days, whereas the maturation time of Ciechan Wyborne is about 30 days. Products from the portfolio of Browary Regionalne Jakubiak are available within the nationwide retail chains, including Auchan, Tesco, Top Market, Real, and Carrefour. Browar Zamkowy also enjoyed fast growth over the final years of the review period. In 2000, its sales accounted for 2,000 hectolitres, and respectively, 14,300 hectolitres in 2011, and 18,400 hectolitres in 2012. . The domestic branch of Carlsberg saw one of the biggest increases in volume sales in 2013. This is for the most part attributable to the strong growth of Kasztelan Niepasteryzowane. What is more, the Harnas brand continued on a sustained growth path. The refreshment of the Okocim brand also contributed to better results in sales. Domestic Van Pur also posted a strong performance due to the growing interest in economy products. The Biedronka chain of discounters enjoyed the fastest growth in volume sales. This is an effect of the expansion of the biggest retail chain in Poland. Keniger (lager), Fasberg Premium (lager), V.I.P. (lager with the alcohol content above 6%) and raspberry-flavoured beer Mali, available in 0.5-litre metal cans as well as Sarmackie (lager) in 1-litre PET bottles, constitute the beer offer of Biedronka. . Although in 2013 multinationals accounted for a 90% share of total volume sales, domestic brands including Zubr, Tyskie, Tatra, Zywiec, Lech, Harnas, and Warka were the leading products. Those brands are in the hands of multinationals, however. Although brewers are global, most brands are very local, as consumers show high loyalty towards domestic brands. The similarity of products, which tend to be light and safe in terms of taste, large volumes, the high gravity production method, high availability of products, and production facilities located close to populated areas where the consumption of beer is concentrated, are the main components of the multinationals‟ expansion model. Generally, beer can be made relatively quickly and brewers can react to an increase in demand rapidly. Multinationals have also extended portfolios, embracing premium and standard brands. Although economy products are not the central strategic interest of multinational companies, strong competition at price points between the standard and economy segments, resulted in migration of beers closer to the economy segment. However, regional breweries grew in importance over the review period. This was due to the mistakes made by multinationals, altering of consumers‟ preferences, and the changing strategic approach of regional breweries. Multinational companies overlooked the consumers‟ boredom of beers produced by the use of the high gravity method of manufacturing. Consumers travel more, explore the internet, are more aware of product content, and started to display interest in products manufactured by small regional breweries. In response, regional breweries started to launch limited edition ranges of beer, which attracted a growing number of consumers. The offer of regional breweries was

consequently expanded with beers reflecting changing preferences of consumers. As a result, regional companies grew in importance in favour of multinationals. . Manufacturers introduced various advertising campaigns in order to attract consumers. For low-end standard brands such as Zubr, Harnas and Tatra, the naturalness, authenticity and regional values were highlighted within their marketing messages. Harnas appeals as it is named after a popular historical figure who lived in the Tatra Mountains. Tyskie highlights the Polish origin. The Lech brand is marketed as the best beer for having fun during a weekend. The revamped Zywiec brand managed to reverse the negative tendency in sales. The refreshed brand Zywiec targets a younger generation of consumers. It is marketed as a beer that accompanies occasions associated with nice moments. The new concept behind the Okocim brand also targets younger consumers. . New launches contributed to the increase in sales of flavoured/mixed lager sales. Following the successful performance of mixed lagers in 2013, new launches, Wojak Radler and Okocim Radler, made efforts to engage consumers. The apple variant of the Warka brand contributed to the growth in sales by 100,000 hectolitres over the period of May-September of the Warka brand. Lech Shandy was expanded with the Dry Orange variant. This is a mix of beer and dry orange and lemonade. . Seasonal variants of the Okocim brand surprised consumers. Swietojanskie Piwo Sezonowe was available in the period of May-July 2013, and respectively, Piwo Dozynkowe in the period spanning August-October 2013, Swiateczne Piwo Sezonowe - November 2013-January 2014, and Wielkanoce Piwo Sezonowe will be available in the period of February 2014-April 2014. The concept of seasonal beers proved to be successful with beer connoisseurs. To reverse the seasonality of beer sales, the domestic division of SABMiller rolled out new development dedicated to a winter season. Ksiazece Burgundowe is made of three types of malts - light, dark caramel and caramel flavoured with a wild rose. The new launch was strongly backed with TV adverts. On-trade establishments also saw numerous promotional events that promoted Ksiazece Burgundowe as a drink for the winter season. . The top premium positioning beer under the Grimbergen brand surprised consumers in the first half of 2013. The new launch is available in three variants: Blonde, double and blanche, and only within the on-trade establishments. The new launch targets beer aficionados and wants to capitalise on the snob effect. . What seems to be interesting, the regional Jablonowo brewery surprised consumers with the introduction of Piwo na Miodzie Gryczanym in 500ml aluminium cans. Generally, beers from the portfolio of regional breweries are available in 0.5-litre glass bottles. . Branded manufacturers seek to create added value. Eye-level shelf locations, dedicated stands at points of sale and high availability, all added value. The use of flavour, ergonomically-designed packaging, eye-catching packaging, contents, selected ingredients, small batches, limited releases and special editions were used to provide value to premium brands. For example, in 2013, the Zywiec brand can was equipped with an indicator showing the exact temperature of the beer. . Premium brands are better positioned as they are accessible at 10-20% lower than the eye level of average height of shoppers. The local breweries highlight the authenticity and character of their premium products and accentuate the natural and non-artificial artisanal process. Local breweries emphasise their use of natural ingredients that originate from regions where breweries operate and how they follow old recipes. . Marketers also emphasised emotional benefits. For example, adverts behind the Zywiec brand highlight nice, relaxing moments. Identification with the hero is also an important component of emotional benefits offered to consumers by leading brands. Event sponsorship,

such as the Heineken Open‟er Festival, is also a component of premium brand loyalty building. . In addition to 67 industrial and craft breweries, there are nearly 30 restaurant breweries. The growing number of restaurant breweries is a new trend. There are three chains of restaurant breweries: Bierhalle is the largest, followed by de Brasil and Spiz. . 2013 saw a further rise in sales of private label products. The expanding discounters channel fuelled this growth. Increasing inequalities reflected by the increase in the Gini Index from 35.4% to 36.6% over the review period also contributed to raising interest in private label products. . 2013 witnessed the acquisition of Browar Bojanów by Browary Regionalne Jakubiak.

PROSPECTS . Sales of beer are expected to be more diversified and heterogeneous by 2018. The growing segmentation will be associated with the evolving beer culture. Beer players are expected to target narrower consumer groups. The forecast period is predicted to witness moves into different categories, such as low/non-alcohol beer and premium lager, as well as flavoured beer, in efforts to boost revenue per unit. Companies are expected to develop new products in terms of new tastes, as well as new types and sizes of packaging. The increase in excise duty on vodka on 1 January 2014, will push demand from vodka towards beer. Beer could therefore benefit from the increase in the excise duty on vodka. . Over the review period, beer sales overtook the European average. The high sales base does not leave much scope for substantial volume growth. For this reason, manufacturers will experiment with new products. One natural route to take is into soft drinks, starting with malt- based products. In practical terms, moving into soft drinks is a far easier step for brewers to take than moving into other alcoholic drinks categories such as wine and spirits. Both have similar production and distribution methods. . Beer players will face challenges associated with the consequences of the Eurozone sovereign debt crisis, while sluggish GDP growth will also be challenging for beer sales. The raise in the VAT rate is not excluded as the government will be forced to stabilise the national budget. Additionally, the ageing population will pose challenges associated with changing consumer habits, and reducing occasions associated with beer consumption. Ageing population will force alcoholic drinks manufacturers to look for new drinking occasions and target groups. One of which are women. Thus, an increasing number of products tailored to women is expected to be observed. . Flavoured and mixed lager are expected to enjoy fast progress. This will be attributable to consumers‟ shift towards beer containing less alcohol. Strong growth will be confined to specific product areas. Niche beers, such as dark beer and specifically weissbier/weizen/wheat beer, are expected to see the strongest growth. This will reflect the growing interest in premium products and interesting flavours, as tastes grow more sophisticated, with a strong performance expected from the Paulaner brand. Disposable incomes are expected to see an increase which in turn, will prompt demand for niche beers. The latter in line with an expected increase in need for naturalness will translate into growing sales of beers manufactured by small, regional brewers. The predicted polarisation of disposable incomes, and growth in sales of private label products will prompt sales of domestic economy lager. . Domestic economy lager is also expected to post fast growth. The growth of domestic lager will be attributable to an expected increase in disparities in disposable incomes of Poles. What is more, retail chain brands are expected to increasingly populate store shelves.

. Unit price is expected to see growth over the forecast period at constant 2013 prices. The review period witnessed strengthening price competition amongst the key players. This resulted in lower profitability of beer producers. The strategy of lowering prices is not to be maintained throughout the forecast period. Furthermore, hikes in taxes cannot be discounted. Volatile prices of raw materials will represent a challenge for producers in terms of maintaining profit margins. . Manufacturers are expected to introduce products tailored for narrower consumer groups. Flavoured/mixed lager is expected to see new entrants. According to trade sources, ale sales are predicted to see new launches. For example, the domestic division of Carlsberg is expected to launch ale beers under the Okocim brand. Flavoured/mixed beer sales are expected to be fuelled with new launches. According to the representative of Carlsberg Polska, the Okocim Radler brand will be extended with new flavours. . In 2013, Kompania Piwowarska started to invest in the construction of a new fermentation and bottling line in the Poznan brewery. Fermentation will be expanded to 10 fermentation tanks, the four will have the same capacity as the existing tank (approximately 5,000 hectolitres), and six others, roughly half the size (approximately 2,300 hectolitres). New investments will be beneficial for preparing smaller batches of beers. Kompania Piwowarska will launch numerous small lines of beers that will reflect altering preferences of consumers, including the introduction of new flavours. . It is expected that non-returnable bottles will gain importance due to their convenience and shorter time of rotation on shelves. What is more, non-returnable bottles make up just 10% of the total bottles in circulation. . In times of economic uncertainty, beer players are expected to follow a diversification strategy, moving into different categories, including cider/perry, malt-based RTDs and outside alcoholic drinks into bottled water, etc. In terms of channel diversification, discounters, convenience stores as well as internet retailing are expected to be the fastest-growing channels over the forecast period. In terms of geographical diversification, exports to more dynamic markets, such as Asia or Africa, are not discounted. . The on-trade channel is expected to outperform the off-trade channel in terms of volume sales growth over the forecast period. Forecast period will see massive efforts of multinationals in order to boost the on-trade culture. This, in turn, will mean more interest in spending time in on-trade establishments. The rise in the number of small breweries operated by restaurants is expected to become a trend in the short-to-medium term, due to consumers‟ desire to drink “authentic” beer. Finally, the per capita consumption of beer is amongst the lowest in Europe. The base effect will also translate into growth of on-trade sales.

CATEGORY BACKGROUND

Lager Price Band Methodology . Polish consumers are price sensitive and price therefore plays an important role in beer sales. In nominal terms, beer is relatively cheap in comparison to vodka and grape wine. Relatively low prices are attributable to huge cost reductions. These reductions are a result of the replacing of natural ingredients with artificial ones, according to trade sources. For example, replacement of brewing malt ingredients – sugar with corn syrup, barley grits with corn grits – is being seen within beer manufacturing. Replacements for brewing malt are used for technological and economic reasons. The addition of sugar results in a higher degree of attenuation of beer or an increase in alcohol content and thus increases the throughput

capacity of a brewery. Some modern breweries use carbon dioxide in production in order to shorten the period of maturation. . Price is a good distinguishing criterion between economy and standard beer. However, the product area between economy and standard lager is so price sensitive that trade sources refer to it as the lower-standard segment. Prices of lower-standard beer are close to those of economy products, but lower-standard beer is higher in quality. Kompania Piwowarska‟s Zubr, a lower-standard product, enjoyed total volume share growth over the review period. A good price/quality ratio supported by strong advertising campaigns drove the success of Zubr. Carlsberg Polska‟s Harnas and Grupa Zywiec‟s Tatra Pils are also positioned in the lower standard segment. On the other hand, the leading beer brand, Tyskie from Kompania Piwowarska SA, is positioned in the upper-standard segment. Tyskie‟s prices are higher than those of mid-priced brands, such as Warka. . In the case of standard and premium products, it is not only the price that signifies status. Most breweries offer foreign lager brands, which are positioned as premium offerings and are usually more expensive than other products. Some international brands, for example, Heineken and Carlsberg, are positioned in the mid-premium segment, while Peroni Nastro Azzurro, Grolsch and Pilsner Urquell are located at the higher end of this segment. Imported beer available through specialist retailers is positioned at the high end of the premium segment. . The prevailing share of beers manufactured by local breweries is positioned within the premium segment. For example, honey beer is high priced due to the content of expensive natural honey. Additionally, local breweries highlight the high content of extract in beer. From the perspective of a growing number of consumers, high extract content justifies the premium pricing of beers manufactured by local breweries. . Beer with an alcohol content higher than 7% ABV constitutes a separate group. Many popular brands offer stronger versions, for example Okocim Mocne, Lech Mocny, Tatra Mocne and Harnas Mocne. Their prices vary according to the positioning of the core brand. Generally, high alcohol content standard brands are priced at a higher level than premium brands with a lower ABV. . Mixed lagers are also positioned within the higher price segment than their standard counterparts. For example, Warka Radler is about 20% higher priced than its core variant. The Somersby brand is positioned within the premium segment on the back of its mixed lager status.

Summary 1 Lager by Price Band 2013 Category Price range per litre PLN Premium 11.00 and above Standard 5.39 – 10.99 Economy 2.58 – 5.38

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources Note: Price bands for lager are based primarily on price, but positioning and packaging are other factors that are considered in classification

Table 1 Number of Breweries 2008-2013

2008 2009 2010 2011 2012 2013

TOTAL 69 67 64 73 80 97

Source: Euromonitor International from official statistics, trade associations

CATEGORY DATA

Table 2 Sales of Beer by Category: Total Volume 2008-2013 million litres 2008 2009 2010 2011 2012 2013

Dark Beer - 10.9 12.6 13.3 25.7 32.3 - Ale ------Sorghum ------Weissbier/Weizen/ - 10.9 12.6 13.3 25.7 32.3 Wheat Beer Lager 3,571.7 3,444.4 3,461.3 3,608.7 3,811.7 3,729.3 - Flavoured/Mixed Lager 141.0 160.0 173.2 181.0 236.2 267.7 - Standard Lager 3,430.8 3,284.4 3,288.1 3,427.7 3,575.5 3,461.6 -- Premium Lager 898.6 800.4 731.4 726.2 729.8 696.3 --- Domestic Premium 843.9 758.9 689.7 665.2 668.7 636.0 Lager --- Imported Premium 54.7 41.5 41.7 61.1 61.1 60.3 Lager -- Mid-Priced Lager 2,124.3 2,066.2 2,121.7 2,226.1 2,339.8 2,244.7 --- Domestic Mid-Priced 2,124.3 2,066.2 2,121.7 2,226.1 2,339.8 2,244.7 Lager --- Imported Mid-Priced ------Lager -- Economy Lager 407.9 417.9 435.0 475.4 505.9 520.6 --- Domestic Economy 407.9 417.9 435.0 475.4 505.9 520.6 Lager --- Imported Economy ------Lager Non/Low Alcohol Beer 23.1 20.8 19.9 21.0 22.2 23.3 Stout 33.2 31.1 31.4 31.9 33.3 34.6 Beer 3,628.0 3,507.2 3,525.3 3,675.0 3,893.0 3,819.5 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3 Sales of Beer by Category: Total Value 2008-2013

PLN million 2008 2009 2010 2011 2012 2013

Dark Beer - 111.5 125.3 140.5 239.9 293.2 - Ale ------Sorghum ------Weissbier/Weizen/ - 111.5 125.3 140.5 239.9 293.2 Wheat Beer Lager 18,281.7 18,039.3 17,272.4 17,505.6 18,569.3 18,323.5 - Flavoured/Mixed Lager 1,039.0 1,202.8 1,327.8 1,426.2 1,630.7 1,869.8 - Standard Lager 17,242.6 16,836.5 15,944.6 16,079.3 16,938.7 16,453.7 -- Premium Lager 4,911.9 4,499.3 4,076.2 4,210.9 4,421.7 4,273.9 --- Domestic Premium 4,457.0 4,141.2 3,748.5 3,757.6 3,936.7 3,770.3 Lager --- Imported Premium 454.9 358.1 327.7 453.3 485.1 503.5 Lager

-- Mid-Priced Lager 11,024.1 10,964.4 10,458.3 10,415.4 10,924.4 10,553.3 --- Domestic Mid-Priced 11,024.1 10,964.4 10,458.3 10,415.4 10,924.4 10,553.3 Lager --- Imported Mid-Priced ------Lager -- Economy Lager 1,306.6 1,372.8 1,410.1 1,453.0 1,592.5 1,626.5 --- Domestic Economy 1,306.6 1,372.8 1,410.1 1,453.0 1,592.5 1,626.5 Lager --- Imported Economy ------Lager Non/Low Alcohol Beer 194.6 183.4 180.9 188.8 199.8 208.6 Stout 436.1 431.6 429.5 429.3 465.4 481.2 Beer 18,912.3 18,765.7 18,008.0 18,264.2 19,474.4 19,306.6 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 4 Sales of Beer by Category: % Total Volume Growth 2008-2013

% total volume growth 2012/13 2008-13 CAGR 2008/13 Total

Dark Beer 25.7 - - - Ale - - - - Sorghum - - - - Weissbier/Weizen/Wheat Beer 25.7 - - Lager -2.2 0.9 4.4 - Flavoured/Mixed Lager 13.4 13.7 89.9 - Standard Lager -3.2 0.2 0.9 -- Premium Lager -4.6 -5.0 -22.5 --- Domestic Premium Lager -4.9 -5.5 -24.6 --- Imported Premium Lager -1.3 2.0 10.3 -- Mid-Priced Lager -4.1 1.1 5.7 --- Domestic Mid-Priced Lager -4.1 1.1 5.7 --- Imported Mid-Priced Lager - - - -- Economy Lager 2.9 5.0 27.6 --- Domestic Economy Lager 2.9 5.0 27.6 --- Imported Economy Lager - - - Non/Low Alcohol Beer 4.9 0.2 1.0 Stout 3.9 0.8 4.3 Beer -1.9 1.0 5.3 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 5 Sales of Beer by Category: % Total Value Growth 2008-2013

% local currency, current value growth

2012/13 2008-13 CAGR 2008/13 Total

Dark Beer 22.2 - - - Ale - - - - Sorghum - - - - Weissbier/Weizen/Wheat Beer 22.2 - - Lager -1.3 0.0 0.2 - Flavoured/Mixed Lager 14.7 12.5 79.9 - Standard Lager -2.9 -0.9 -4.6 -- Premium Lager -3.3 -2.7 -13.0

--- Domestic Premium Lager -4.2 -3.3 -15.4 --- Imported Premium Lager 3.8 2.1 10.7 -- Mid-Priced Lager -3.4 -0.9 -4.3 --- Domestic Mid-Priced Lager -3.4 -0.9 -4.3 --- Imported Mid-Priced Lager - - - -- Economy Lager 2.1 4.5 24.5 --- Domestic Economy Lager 2.1 4.5 24.5 --- Imported Economy Lager - - - Non/Low Alcohol Beer 4.4 1.4 7.2 Stout 3.4 2.0 10.4 Beer -0.9 0.4 2.1 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6 Sales of Beer by Off-trade vs On-trade: Volume 2008-2013 million litres 2008 2009 2010 2011 2012 2013

Off-trade 2,750.6 2,725.5 2,776.3 2,936.5 3,157.3 3,101.2 On-trade 877.4 781.8 748.9 738.5 735.7 718.3 Total 3,628.0 3,507.2 3,525.3 3,675.0 3,893.0 3,819.5 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 7 Sales of Beer by Off-trade vs On-trade: Value 2008-2013

PLN million 2008 2009 2010 2011 2012 2013

Off-trade 12,089.6 12,391.4 11,979.9 12,209.4 13,053.9 12,903.2 On-trade 6,822.7 6,374.3 6,028.1 6,054.7 6,420.5 6,403.4 Total 18,912.3 18,765.7 18,008.0 18,264.2 19,474.4 19,306.6 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 8 Sales of Beer by Off-trade vs On-trade: % Volume Growth 2008-2013

% volume growth 2012/13 2008-13 CAGR 2008/13 TOTAL

Off-trade -1.8 2.4 12.7 On-trade -2.4 -3.9 -18.1 Total -1.9 1.0 5.3 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 9 Sales of Beer by Off-trade vs On-trade: % Value Growth 2008-2013

% current value growth 2012/13 2008-13 CAGR 2008/13 TOTAL

Off-trade -1.2 1.3 6.7

On-trade -0.3 -1.3 -6.1 Total -0.9 0.4 2.1 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 10 GBO Company Shares of Beer: % Total Volume 2009-2013

% total volume Company 2009 2010 2011 2012 2013

SABMiller Plc 40.6 39.9 38.3 37.8 36.9 Heineken NV 32.9 30.6 29.9 29.2 28.6 Carlsberg A/S 11.7 13.6 14.6 15.2 15.8 Van Pur Sp zoo 2.6 2.7 4.2 4.1 4.2 Perla Browary Lubelskie 1.2 1.3 1.3 1.3 1.3 SA Paulaner Brauerei GmbH 0.1 0.1 0.1 0.4 0.5 & Co KG Royal Unibrew A/S 1.4 1.4 0.2 0.1 0.1 Bryggerigruppen A/S - - - - - (The Danish Brewery Group A/S) Palm NV, Brouwerij - - - - - Grolsch, Koninklijke NV - - - - - Browary Polskie Brok------Strzelec SA InBev NV SA - - - - - Private Label 5.8 6.1 6.7 7.2 7.9 Others 3.7 4.3 4.7 4.9 4.7 Total 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 11 NBO Company Shares of Beer: % Total Volume 2009-2013

% total volume Company 2009 2010 2011 2012 2013

Kompania Piwowarska SA 40.6 39.9 38.3 37.8 36.9 Grupa Zywiec SA 33.0 30.7 30.0 29.5 29.1 Carlsberg Polska SA 11.7 13.6 14.6 15.2 15.8 Van Pur Sp zoo 2.6 2.7 4.3 4.2 4.3 Jeronimo Martins Polska - - - 3.2 3.6 SA Real Sp zoo i Spolka Sp k 1.5 1.5 1.5 1.4 1.5 Carrefour Polska Sp zoo 1.4 1.4 1.4 1.4 1.5 Perla Browary Lubelskie 1.2 1.3 1.3 1.3 1.3 SA Tesco Polska Sp zoo 0.9 0.9 0.9 0.8 0.9 Other Private Label 0.2 0.2 0.2 0.3 0.5 Carey Agri 0.0 0.0 0.0 0.0 - International Sp zoo Jeronimo Martins 1.9 2.1 2.7 - - Dystrybucja SA Royal Unibrew Polska Sp 1.4 1.4 0.1 - - zoo Murphy Brewery Ireland - - - - -

Ltd Browary Polskie Brok------Strzelec SA Pepsi-Cola General - - - - - Bottlers Sp zoo Browar Belgia Sp zoo - - - - - Peva Poland Sp zoo - - - - - Others 3.7 4.2 4.6 4.9 4.7 Total 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 12 LBN Brand Shares of Beer: % Total Volume 2010-2013

% total volume Brand (Global Brand Company 2010 2011 2012 2013 Owner)

Zubr (SABMiller Plc) Kompania Piwowarska SA 12.7 12.6 12.2 12.1 Tyskie Gronie Kompania Piwowarska SA 13.0 12.6 12.0 11.9 (SABMiller Plc) Harnas (Carlsberg A/ Carlsberg Polska SA 5.5 6.5 7.1 7.2 S) Tatra Pils Grupa Zywiec SA 4.9 6.2 6.2 6.0 (Heineken NV) Zywiec (Heineken NV) Grupa Zywiec SA 6.0 5.6 5.4 5.6 Lech (SABMiller Plc) Kompania Piwowarska SA 6.4 5.8 5.6 5.0 Specjal (Heineken NV) Grupa Zywiec SA 5.1 4.9 4.5 4.2 Warka Jasne Pelne Grupa Zywiec SA 4.1 3.1 3.3 3.2 (Heineken NV) Redd's (SABMiller Kompania Piwowarska SA 2.5 2.4 2.3 2.5 Plc) Desperados Grupa Zywiec SA 1.8 2.0 2.0 2.0 (Heineken NV) Biedronka (Private Jeronimo Martins Polska - - 3.2 3.6 Label) SA Réal (Private Label) Real Sp zoo i Spolka Sp k 1.5 1.5 1.4 1.5 Carrefour (Private Carrefour Polska Sp zoo 1.4 1.4 1.4 1.5 Label) Tesco (Private Label) Tesco Polska Sp zoo 0.9 0.9 0.8 0.9 Other Private Label Other Private Label 0.2 0.2 0.3 0.5 (Private Label) Biedronka (Private Jeronimo Martins 2.1 2.7 - - Label) Dystrybucja SA Others Others 31.9 31.6 32.1 32.4 Total Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 13 Production, Imports and Exports of Beer: Total Volume 2007-2012

Million litres 2007 2008 2009 2010 2011 2012

Beer – Production 3,669.0 3,710.0 3,623.5 3,680.0 3,807.0 3,961.0 Beer – Apparent 3,579.6 3,585.4 3,476.3 3,504.3 3,640.2 3,804.5 consumption

Beer – Exports 123.2 159.2 183.7 210.1 209.2 218.4 Beer – Imports 33.8 34.5 36.5 34.4 42.4 61.9 Source: GTIS, Euromonitor International Note: „-‟ indicates data not available

Table 14 Imports of Beer by Country of Origin: Total Volume 2007-2012 million litres 2007 2008 2009 2010 2011 2012

Beer – Germany 17.2 15.8 11.9 7.7 17.0 22.8 Beer – Estonia - - - - 1.9 11.0 Beer – Czech Republic 2.6 5.8 3.9 4.3 7.5 10.3 Beer – Lithuania 0.4 0.3 0.3 2.6 3.1 3.6 Beer – Netherlands 4.6 3.9 2.4 3.4 4.0 3.4 Beer – Sweden 0.3 0.3 0.3 0.3 0.3 2.2 Beer – Mexico 0.3 0.4 0.5 0.6 0.5 1.5 Beer – Austria 0.6 1.3 2.1 2.6 1.4 1.3 Beer – Italy 2.5 3.1 2.4 2.3 1.3 1.1 Beer – Ireland 0.4 0.5 0.4 0.3 0.8 0.9 Beer – Belgium 0.1 0.4 1.8 2.6 2.1 0.8 Beer – France 0.6 0.2 0.2 0.1 0.3 0.7 Beer – Denmark 2.5 1.3 1.2 2.9 1.0 0.7 Beer – Ukraine 0.3 0.4 0.3 0.4 0.6 0.7 Beer – Spain 0.0 0.1 0.1 0.1 0.3 0.4 Beer – Russia 0.0 0.0 0.0 0.0 0.0 0.2 Beer – United Kingdom 0.5 0.5 0.7 0.6 0.2 0.2 Beer – Romania - - - - - 0.1 Beer – China 0.0 0.0 0.0 0.0 0.0 0.0 Beer – Armenia - - - - - 0.0 Beer – Belarus - - - - 0.1 - Beer – Israel - - - - 0.0 - Beer – Latvia - - 0.2 - 0.0 - Beer – Serbia 0.0 0.0 7.9 3.0 - - Beer – Finland - - - 0.4 - - Beer – Others 0.9 0.1 0.0 0.2 0.0 0.0 Beer – Total 33.8 34.5 36.5 34.4 42.4 61.9 Source: GTIS, Euromonitor International Note: „-‟ indicates data not available

Table 15 Imports of Beer by Country of Origin: Total Value 2007-2012

PLN million 2007 2008 2009 2010 2011 2012

Beer – Germany 31.0 30.5 29.3 20.3 39.8 60.0 Beer – Estonia - - - - 3.5 33.5 Beer – Czech Republic 5.0 10.2 9.6 10.1 20.2 25.7 Beer – Netherlands 14.0 14.4 9.3 12.3 12.6 10.6 Beer – Mexico 1.2 1.7 2.5 2.5 2.5 6.8 Beer – Lithuania 0.6 0.7 0.8 2.7 5.6 6.5 Beer – Ireland 2.1 1.4 1.6 1.5 4.8 5.3 Beer – Austria 0.7 1.7 3.7 4.3 4.9 5.0 Beer – France 2.3 0.8 1.2 0.5 1.1 3.5 Beer – Sweden 0.9 0.9 0.9 0.9 1.1 3.0 Beer – Italy 5.7 7.3 6.9 5.6 3.2 2.8 Beer – Belgium 0.1 0.8 3.2 4.0 4.8 1.7

Beer – Denmark 4.3 1.8 1.9 3.8 1.9 1.6 Beer – Spain 0.1 0.3 0.4 0.4 0.8 1.6 Beer – Ukraine 0.5 0.7 0.7 0.8 1.3 1.4 Beer – United Kingdom 1.5 2.5 3.6 3.1 0.9 1.0 Beer – Russia 0.0 0.0 0.0 0.0 0.1 0.6 Beer – Portugal 0.1 0.1 - - 0.0 0.1 Beer – China 0.1 0.0 0.1 0.1 0.0 0.1 Beer – Greece 0.0 0.0 0.0 0.0 0.0 0.1 Beer – Peru - - - - 0.0 0.0 Beer – Not Determin 0.0 0.0 - 0.0 0.0 0.0 Extra EU Trade Beer – Belarus - - - - 0.2 - Beer – Israel - - - - 0.1 - Beer – Latvia - - 0.2 - 0.0 - Beer – Others 0.6 0.2 13.9 4.8 0.0 0.2 Beer – Total 70.7 76.1 89.8 77.9 109.4 171.0 Source: GTIS, Euromonitor International Note: „-‟ indicates data not available

Table 16 Exports of Beer by Country of Destination: Total Volume 2007-2012 million litres 2007 2008 2009 2010 2011 2012

Beer – Germany 10.2 12.0 10.2 13.1 23.8 31.5 Beer – Hungary 14.3 19.1 35.8 41.6 48.8 30.1 Beer – Czech Republic 8.8 19.6 31.6 39.9 28.4 20.3 Beer – Ireland 3.9 5.2 9.1 13.3 12.4 20.1 Beer – Italy 7.2 11.2 11.2 12.1 13.3 19.1 Beer – Slovakia 4.4 6.6 10.1 15.5 16.8 16.5 Beer – Romania 0.0 0.1 1.0 4.1 8.3 15.1 Beer – US 12.7 12.7 10.6 12.0 10.7 12.9 Beer – Bulgaria 0.0 0.0 0.4 3.6 10.8 11.1 Beer – France 10.4 9.1 10.8 7.8 8.0 6.8 Beer – Lithuania 3.5 5.2 4.6 6.5 5.4 5.6 Beer – Canada 3.6 3.4 3.4 3.7 3.9 4.8 Beer – Netherlands 4.1 2.2 4.3 3.9 0.8 4.3 Beer – United Kingdom 30.9 23.2 14.0 11.2 1.3 3.5 Beer – Slovenia 1.2 2.4 4.4 5.8 4.1 3.1 Beer – Belgium 3.1 2.3 2.7 3.6 1.7 2.3 Beer – Croatia 0.1 - 0.1 1.4 2.0 2.1 Beer – Denmark 0.3 19.0 10.7 2.1 1.8 1.9 Beer – Sweden 0.4 0.1 1.1 0.6 1.2 0.8 Beer – Latvia 0.0 - 2.6 0.4 0.5 0.8 Beer – Sudan - - 0.4 0.5 1.4 0.7 Beer – Australia 0.3 0.5 0.5 0.5 0.4 0.4 Beer – Spain 0.4 1.8 0.2 1.2 0.4 0.2 Beer – Serbia 0.0 - 0.0 0.5 0.4 - Beer – Portugal - - - 0.6 - - Beer – Others 3.3 3.7 4.1 4.6 2.5 4.2 Beer – Total 123.2 159.2 183.7 210.1 209.2 218.4 Source: GTIS, Euromonitor International Note: „-‟ indicates data not available

Table 17 Exports of Beer by Country of Destination: Total Value 2007-2012

PLN million

2007 2008 2009 2010 2011 2012

Beer – Ireland 7.1 9.7 19.3 26.0 25.1 48.9 Beer – Germany 17.7 18.8 14.5 19.3 30.5 47.2 Beer – Hungary 13.3 20.8 43.9 41.0 52.2 42.8 Beer – Czech Republic 9.3 24.2 34.4 46.6 45.0 38.3 Beer – US 28.3 28.5 25.3 27.3 24.7 30.2 Beer – Italy 10.1 12.8 20.9 21.1 19.2 29.7 Beer – Romania 0.0 0.1 2.0 6.6 13.8 26.3 Beer – Slovakia 4.2 6.0 12.4 16.2 23.4 24.5 Beer – Bulgaria 0.0 0.0 0.7 5.8 17.3 18.6 Beer – France 19.3 14.9 21.4 16.8 17.7 15.5 Beer – Canada 12.3 9.8 10.8 12.0 12.3 14.5 Beer – Netherlands 10.3 3.6 7.4 6.6 2.0 10.7 Beer – United Kingdom 68.9 49.5 28.9 21.1 3.2 10.3 Beer – Lithuania 4.0 7.8 7.8 10.0 8.8 9.3 Beer – Slovenia 0.9 1.9 3.3 4.3 4.0 4.5 Beer – Belgium 8.0 3.2 4.4 5.3 3.1 4.2 Beer – Denmark 0.6 13.2 6.6 1.5 1.8 4.0 Beer – Croatia 0.2 - 0.3 0.5 3.2 3.0 Beer – Sweden 0.7 0.3 1.7 1.0 2.1 1.8 Beer – Australia 0.9 1.2 1.6 1.6 1.2 1.4 Beer – Sudan - - 1.0 1.1 2.9 1.3 Beer – Not Determin 0.5 0.6 0.9 1.1 1.3 1.3 Extra EU Trade Beer – Russia 0.0 0.3 0.9 1.3 1.0 1.1 Beer – Spain 1.1 4.3 0.6 2.0 1.1 0.8 Beer – Serbia 0.0 - 0.1 1.2 1.1 - Beer – Others 6.2 6.5 9.9 9.8 5.3 10.4 Beer – Total 224.2 238.0 280.8 307.3 323.1 400.6 Source: GTIS, Euromonitor International Note: „-‟ indicates data not available

Table 18 Forecast Sales of Beer by Category: Total Volume 2013-2018 million litres 2013 2014 2015 2016 2017 2018

Dark Beer 32.3 38.5 43.8 49.0 54.3 59.7 - Ale ------Sorghum ------Weissbier/Weizen/ 32.3 38.5 43.8 49.0 54.3 59.7 Wheat Beer Lager 3,729.3 3,766.1 3,791.6 3,835.3 3,887.9 3,944.6 - Flavoured/Mixed Lager 267.7 283.7 300.8 312.8 323.7 333.5 - Standard Lager 3,461.6 3,482.4 3,490.9 3,522.5 3,564.2 3,611.2 -- Premium Lager 696.3 687.2 692.9 706.6 728.3 753.9 --- Domestic Premium 636.0 627.8 633.5 646.2 665.8 688.8 Lager --- Imported Premium 60.3 59.4 59.3 60.5 62.4 65.1 Lager -- Mid-Priced Lager 2,244.7 2,257.1 2,239.3 2,238.6 2,240.3 2,243.1 --- Domestic Mid-Priced 2,244.7 2,257.1 2,239.3 2,238.6 2,240.3 2,243.1 Lager --- Imported Mid-Priced ------Lager -- Economy Lager 520.6 538.1 558.7 577.3 595.6 614.1 --- Domestic Economy 520.6 538.1 558.7 577.3 595.6 614.1 Lager

--- Imported Economy ------Lager Non/Low Alcohol Beer 23.3 24.4 25.4 26.6 27.9 29.2 Stout 34.6 35.9 37.5 39.1 40.8 42.6 Beer 3,819.5 3,864.9 3,898.3 3,950.0 4,010.9 4,076.1 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 19 Forecast Sales of Beer by Category: Total Value 2013-2018

PLN million 2013 2014 2015 2016 2017 2018

Dark Beer 293.2 330.9 372.3 413.2 456.2 497.7 - Ale ------Sorghum ------Weissbier/Weizen/ 293.2 330.9 372.3 413.2 456.2 497.7 Wheat Beer Lager 18,323.5 18,461.4 18,890.2 19,372.9 19,862.9 20,423.4 - Flavoured/Mixed Lager 1,869.8 2,017.3 2,172.9 2,295.7 2,412.0 2,521.6 - Standard Lager 16,453.7 16,444.1 16,717.4 17,077.1 17,451.0 17,901.8 -- Premium Lager 4,273.9 4,317.5 4,573.7 4,824.9 5,068.0 5,364.1 --- Domestic Premium 3,770.3 3,818.0 4,062.9 4,293.1 4,508.2 4,771.8 Lager --- Imported Premium 503.5 499.5 510.8 531.8 559.8 592.3 Lager -- Mid-Priced Lager 10,553.3 10,459.2 10,432.6 10,491.9 10,590.7 10,701.7 --- Domestic Mid-Priced 10,553.3 10,459.2 10,432.6 10,491.9 10,590.7 10,701.7 Lager --- Imported Mid-Priced ------Lager -- Economy Lager 1,626.5 1,667.4 1,711.1 1,760.3 1,792.2 1,836.0 --- Domestic Economy 1,626.5 1,667.4 1,711.1 1,760.3 1,792.2 1,836.0 Lager --- Imported Economy ------Lager Non/Low Alcohol Beer 208.6 218.0 228.1 238.4 249.7 262.0 Stout 481.2 495.6 512.2 533.5 555.5 578.3 Beer 19,306.6 19,505.8 20,002.9 20,558.0 21,124.4 21,761.4 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 20 Forecast Sales of Beer by Category: % Total Volume Growth 2013-2018

% total volume growth 2017/18 2013-18 CAGR 2013/18 Total

Dark Beer 9.9 13.1 84.8 - Ale - - - - Sorghum - - - - Weissbier/Weizen/Wheat Beer 9.9 13.1 84.8 Lager 1.5 1.1 5.8 - Flavoured/Mixed Lager 3.0 4.5 24.6 - Standard Lager 1.3 0.8 4.3 -- Premium Lager 3.5 1.6 8.3 --- Domestic Premium Lager 3.5 1.6 8.3 --- Imported Premium Lager 4.2 1.5 7.9

-- Mid-Priced Lager 0.1 0.0 -0.1 --- Domestic Mid-Priced Lager 0.1 0.0 -0.1 --- Imported Mid-Priced Lager - - - -- Economy Lager 3.1 3.4 18.0 --- Domestic Economy Lager 3.1 3.4 18.0 --- Imported Economy Lager - - - Non/Low Alcohol Beer 4.8 4.6 25.4 Stout 4.2 4.2 22.9 Beer 1.6 1.3 6.7 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 21 Forecast Sales of Beer by Category: % Total Value Growth 2013-2018

% local currency, constant value growth

2013-18 CAGR 2013/18 TOTAL

Dark Beer 11.2 69.8 - Ale - - - Sorghum - - - Weissbier/Weizen/Wheat Beer 11.2 69.8 Lager 2.2 11.5 - Flavoured/Mixed Lager 6.2 34.9 - Standard Lager 1.7 8.8 -- Premium Lager 4.6 25.5 --- Domestic Premium Lager 4.8 26.6 --- Imported Premium Lager 3.3 17.6 -- Mid-Priced Lager 0.3 1.4 --- Domestic Mid-Priced Lager 0.3 1.4 --- Imported Mid-Priced Lager - - -- Economy Lager 2.5 12.9 --- Domestic Economy Lager 2.5 12.9 --- Imported Economy Lager - - Non/Low Alcohol Beer 4.7 25.6 Stout 3.7 20.2 Beer 2.4 12.7 Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources