Facts, Figures, Forecasts

Kevin Baker

Account Director – Alcoholic Beverages

14th May 2013

1

Facts, Figures, Forecasts

Agenda

� Global Beer Market Trends

� Consolidation

� Emerging Markets

� “Craft Beer”� “Craft Beer”

� The Radler Phenomenon

� Cider

� Forecasts & Summary

Global Beer

Trends

3

Trends

4.0%

5.0%

6.0%

7.0%

1,500,000

2,000,000

2,500,000 MHL YoY Growth

The Fall & Rise

0.0%

1.0%

2.0%

3.0%

0

500,000

1,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

02–’12 - 520 MHL Incremental Volume – Average CAGR ‘3.1%

Volumein ‘000 HL

2012

Regional Variations

CAGR2006 - 2012

2.0%

1,951

MHL

Global

6.1% 5.1% 0.3% -1.6% 3.3% 3.1% -1.1%

720

326

-1.6%

5

Per

Capita2012

30 12 7419 6562 54 5 72

108

21

250269

8

249

Africa Asia Australasia Europe (East)

Europe (West)

Latin America

MENA North America

Regional Growth

1000

1200

1400

1600

1800

2000

Africa

Asia

MENA

Latin

Beer MHL Geographic MixBeer MHL Geographic Mix

0

200

400

600

800

1000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Latin America

Australasia

East Europe

North America

West Europe

Latin America

Australasia

Asia

Africa

Asia Drives Volume, But Africa Growing Fastest

Increm. MHL ’06 – ‘12Increm. MHL ’06 – ‘12

Latin America

Australasia

Asia

Africa

CAGR ’06 – ’12CAGR ’06 – ’12

-50 0 50 100 150 200 250

West Europe

North America

MENA

East Europe

-2% 0% 2% 4% 6% 8%

West Europe

North America

MENA

East Europe

Consolidation

8

Consolidation

Consolidation – The Story Continues

The World’s Top 10 Brewers 2013 (Estimate)

1.

Volume (mhls)

404.4A-BInBev

CompanyRank

2. 299.5SABMiller (inc CRB)

3.

4.

177.1Heineken

124.4Carlsberg

(inc Modelo ex-USA)

(inc. Kingway)

(inc APB)

(inc. Chongqing)

5.

6.

7.

76.9Tsingtao

8.

58.2

9.

43.5

Yanjing

10.

28.4

Molson Coors

Based on 2012P data

22.7

Asahi

58.5

Kirin

Castel

Global Consolidation

19981998 2013P2013P

All Others35%

Top 10 Brewers

34%Top 10

Brewers65%

35%34%All Others

66%

The Big Five

54%54%

Emerging Markets

13

Emerging Markets

Latin America

Australasia

Asia

Africa

Asia Drives Volume, But Africa Growing Fastest

Increm. MHL ’06 – ‘12Increm. MHL ’06 – ‘12

Latin America

Australasia

Asia

Africa

CAGR ’06 – ’12CAGR ’06 – ’12

-50 0 50 100 150 200 250

West Europe

North America

MENA

East Europe

-2% 0% 2% 4% 6% 8%

West Europe

North America

MENA

East Europe

Emerging Markets

Emerging vs Mature Markets

Increm. MHL ’06 – ‘12Increm. MHL ’06 – ‘12 Share of Global Market, 2012Share of Global Market, 2012

Mature31%

-200 0 200 400

Mature MarketsEmerging69%

Brewers Exposure to Emerging Markets

A-BInBevA-BInBev

Emerging59%

Mature41%

SABMillerSABMiller

Emerging67%

Mature33%

HeinekenHeineken

Emerging63%

Mature37%

59% 67% 63%

CarlsbergCarlsbergEmerging71%

Mature29%

Molson CoorsMolson Coors

Emerging18%

Mature82%

1.5%

2.0%

2.5%

3.0%

3.5%

Growth Outlook

EmergingEmerging

Forecast YoY Growth, 2012 - 2018Forecast YoY Growth, 2012 - 2018

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2012 2013 2014 2015 2016 2017 2018

MatureMature

Mexico

USA

Vietnam

Brazil

China

Forecast Market Growth

Incremental Volume 000’s HLIncremental Volume 000’s HL

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

Nigeria

Argentina

South Africa

Colombia

India

Mexico

Africa Awakes

The African Market is set to

grow faster than Asia

There is a clear trend towards

developing more premium developing more premium

offerings

At the other end of the

spectrum many brewers are

looking at non-malt alternatives

to produce lower cost products

The “Craft” Beer

20

The “Craft” Beer

Phenomenon

Defining Craft Beer

The Brewers Association in the US defines “Craft” beer as being

produced by brewers who are:

Small – <6 million barrels per year

Independent – Less than 25% equity held by a larger brewer

Traditional – Flagship brand is an all malt beer

Defining Craft Beer

The problem with this definition is that it excludes many products that

consumers would probably consider “craft” beer :

Leffe

Doom BarDoom Bar

Jacobsen

Blue Moon

Affligem

Grimbergen etc. etc.

Defining Craft Beer

Canadean believes that a better definition would be :

Products either produced by microbreweries

or or

Superpremium speciality (typically non-lager) beers* brewed by larger

brewers

*excluding Guinness

The Bigger Picture

Craft Beers is part of a wider

trend towards more local,

smaller scale, traditionally

made products

Other examples of this trend

can be seen in cheese;

bakery; chocolate; and in the

success of farmer’s markets

15,000

20,000

25,000 000's HL

The Rise of Craft Beer

0

5,000

10,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

02–’12 – 11.1 MHL Incremental Volume – Average CAGR 6.9%

Belgium

Italy

France

Germany

USA

Leading Craft Markets

Volume 000’s HLVolume 000’s HL

0.00 2,000.00 4,000.00 6,000.00 8,000.00 10,000.00 12,000.00

UK

Russia

Austria

Poland

Netherlands

Radler

27

Radler

“Sweetening the

Pils”

The Drift To the Sweet Spot

There is a clear consumer need for

products that offer the following :

• around 5% Abv

• packaged in single serve bottles

• Sweet/Easy To Drink

• Refreshing

• Affordable• Affordable

This need can be met by

• less bitter beers

• Fruit Beer (or beers served with fruit)

• Beermixes

• FAB’s/Premixes

• Cider

Has the drift to Sweetness halted?

There is a some evidence

that consumers are now

looking for more challenging

bitter flavours

Examples are the increased Examples are the increased

popularity of espresso coffee,

dark/bitter chocolate; Gin &

Tonic and the launch of a less

sweet cider by Lambrini.

Mixing It Up

The mixing of Beer with Soft Drinks (especially Lemonade) is

surprisingly widespread.

These drinks are known as Shandy in the UK; Panach in France and

Switzerland; Radler in Germany and Austria; and (with the addition of

Worcester Sauce!) Michelada in Mexico.Worcester Sauce!) Michelada in Mexico.

These products really took off in Germany where the category now

accounts for almost 6% of the total beer market

These drinks have now been very successfully launched in Eastern

Europe

Ukraine

Serbia

Slovenia

Croatia

Hungary

Radler Growth in East Europe

Radler Volume 000’s HLRadler Volume 000’s HL

0.00 100.00 200.00 300.00 400.00 500.00 600.00

Bosnia

Czech Republic

Latvia

Lithuania

Romania

Ukraine

New Radlers

Croatia

Slovenia

Czech

Republic

Hungary Romania

UK

Cider

33

Cider

Global Cider : Steady Growth

Global Cider Volume 000’s HLGlobal Cider Volume 000’s HL

CAGR ‘99–’12P: 3.8%

Cider…Not Small Beer!

8%

10%

12%

14%

16%

18%

Cider as % of Beer MarketCider as % of Beer Market

0%

2%

4%

6%

Cider Types 2012Cider Types 2012 ‘06-’12 Volume CAGR‘06-’12 Volume CAGR

Apple Dominates - Pear & Flavoured Growing Faster

36

Local Preferences

Cider Types by RegionCider Types by Region

Cider Is Still Predominantly European

BeerBeer CiderCider

North America4%

Latin America7%

Africa/Middle East7%

Asia1%

Australasia6%

Europe75%

7%

The World’s Largest Cider Brands

Bulmers Original

Kopparberg

Savanna

Magners/Bulmers (Ireland)

Strongbow

666

676

766

1,678 3,415

Ranking:

2012 KHL

Ranking:

2012 KHL

Stella Cidre

Frosty Jack's

Westons

Somersby

Hunter's

Bulmers Original

265

311

348

358

590

Note: Excludes Poland volumes for Somersby

� Cider growth expected to slow down but remain positive

� Slowdown in mature markets tempered by growth in new markets,

especially in Eastern Europe

� Growth will continue to be driven by pear and flavored cider

Global Cider Market Outlook

� Category will face competition from “new wave” of flavoured alcoholic

beverages and flavoured beers/beermixes

� Entry of all major brewers into category will drive growth and disrupt

competitive landscape

Forecasts &

Summary

41

Summary

1.5%

2.0%

2.5%

1,500

2,000

2,500 MHL YoY Growth

Global Beer Market Outlook

0.0%

0.5%

1.0%

0

500

1,000

2012 2013 2014 2015 2016 2017 2018

12 –’18 - 269 MHL Incremental Volume – Average CAGR ‘2.2%

Global Beer Market Trends

� Global market growth at a much lower lower rate than before the 2008

crash

� Growth rates between emerging markets (Asia; Africa; LatAm) and

mature markets (Europe, North America) will continue to widen

� China continues to grow – but growth rate slowing

� Africa will be the region to watch

� Key markets to watch are Brazil; Vietnam; Mexico and India

Global Beer Market Trends

� “Craft” Beer is a hot topic – although there is little consensus over

how to define it!

� Radler volumes have exploded in East Europe and are fuelled by

the trend towards sweeter beverages

� Cider continues to grow and outperform beer in many markets

� Consolidation slows but no signs that we have reached the

endgame yet!

2014

Canadean predict that Global Beer Volume will top 2 billion hectolitres

Will there be any further large scale mergers and acquisitions?

Will West European volumes continue to fall?

Will the Russian market return to growth?Will the Russian market return to growth?

Can Cider continue to grow?

Will Craft and Radlers continue to boom?

See you next year!