BOTTOMS UP

Kazakhstan 2015 | INDUSTRY | INTERVIEW

TBY talks to Serkan Erifl, Managing Director of Efes Kazakhstan, on trends in the market, innovations at the company, and new products.

Serkan Eriş
BIOGRAPHY
Serkan Eriş was born in 1971. He graduated from Dokuz Eylul University in Izmir with a degree in Public Administration and began his career at Efes Turkey in 1996 as a Sales Supervisor. He spent four years in Romania with Efes before moving to European Telecommunication Holding in Germany to work as a Sales and Marketing Manager. He then moved to Kazakhstan in 2003 to work with Efes as Sales and Marketing Manager and Sales Director, and is currently the Managing Director of the company's local operations.

What are the main trends that emerged last year in your sector?

The year started off with a major devaluation. However, it was partially expected. The devaluation affected the FMCG manufacturers directly. As for Efes Kazakhstan, we rely heavily on importing our main raw materials, such as glass bottles and aluminum cans. It certainly was a challenging year. Despite these difficulties, we maintained a high performance level in the first three months following the devaluation. Luckily, in 2014 we had a good summer compared with 2013, which made up for the preceding slump. It may have not completely compensated for overall industry losses; however, the market overreacted during the season. All in all, it was an interesting, exciting, and competitive year. In terms of new brands and products appearing in the market, it was one of the most fruitful years for the industry.

The brewery market in Kazakhstan is very dynamic: in 2013, 30 new brands appeared in the local market. How do you approach this fluid market?

Innovation is the key to success. Efes is committed not only to growing its market share, but also to assisting in the growth of the beer segment as a whole. When we launch a new product, we are not trying to beat our competitors; instead we ensure that Efes offers a wider variety of products that meet the expectations of different target groups. In 2014 we launched quite a few products, such as Efes Radler, which was produced and launched in Kazakhstan for the first time. We also launched brands that meet the demand for milder beer products here. Upsizing is another area where Efes is a trend-setter. In 2014, we launched 10 packages in one-liter bottles, which was new for the market. Beer consumption per capita is not that high in Kazakhstan. A larger package is more convenient to take home and share with friends.

How is Efes investing in modern technologies and equipment to create high-quality and competitive products?

Almost half of our annual investments go to machinery, technologies, hardware, and software. Because efficiency and quality are extremely important, the technology we use is constantly changing. In addition, over the past two years, we have made significant investments to improve our reporting systems and integrate our software in order to eliminate human error.

What are the advantages of brewing in Kazakhstan?

Beer is a highly regional product. One of the main quality indicators for a beer is its freshness. The fresher it is, the better the taste. One of our core beliefs is that beer should be produced locally. On top of that, brewing adds value to the country's economy. Brewing creates a lot of jobs. Unfortunately, as is the case with packaging here, almost everything is imported. Again, we will be more than happy to have a large high-quality bottle or can producer in Kazakhstan when the opportunity arises. Beer has a small number of basic ingredients. These are basically water, malt, and hops—hops are mostly imported from Russia or the Czech Republic. Packaging is our weakest link as it accounts for about one-fifth of the shelf price.

You recently launched “Efes Radler," a drink with a high component of lime, and a low-alcohol content (2%). What are the market opportunities for 'healthier' beers or non-alcoholic drinks in the country?

Alcoholic beer is not necessarily less healthy than the non-alcoholic variety. Beer is a 100% natural product. That said, we agree with the government that consumers should drink responsibly. Efes encourages consumers of its products to do so, in which case our products can be part of a healthy lifestyle. However, we also offer three non-alcoholic brands. In the future, we will consider launching more non-alcoholic varieties.