Domestic beer hops into second slot

  • 2000-02-03
  • By Brooke Donald
TALLINN – A.Le Coq Tartu Brewery sold 29.4 million liters of its entire product line last year, up 65 percent from 1998. The company's market share of domestic beer rose to a whopping 30 percent by the end of the year, almost three times its market share in the beginning of 1999.

Thanks to the successful launch in June of the A.Le Coq brand name which carries Premium, Porter and Pilsner beers and an increase in production from a more sophisticated factory, A.Le Coq secured its place as the number two selling domestic beer in Estonia. The company's market share rose to 30 percent during the year, but it maintains 20 percent for the 1999 average.

Estonia's leader, Saku, owned by Scandinavian Baltic Beverages Holding, ended the year with a little over 50 percent of the total market share in domestic beers. Estonia's third largest brewery is Viru, holding around 12 percent of the market share.

Tarmo Noop, board chairman of A.Le Coq Tartu Brewery, hopes that the sales of locally-made beer will continue to increase this year. The company's goal is to grab 30 percent to 35 percent of that market share by 2002. "Last year's results are encouraging," he said.

"Whereas Estonia's beer market increased by a third, we were almost doubling our sales," Noop said in a statement. "Beer and cider are our best selling products. We hope to increase beer sales this year and also expect a good cider year."

Beer sales increased 87 percent from 1998. Growth was particularly strong in the second half of the year when the sale of beer increased 2.27 times year-on-year.

The company spent the first half of last year investing in the new brewery that is heralded as one of the most modern breweries in the Baltic region. A.Le Coq's majority owner, the Finnish Olvi OY, invested 270 million kroons ($18 million) for the modernization.

Employee numbers were reduced from 420 in 1998 to 178 last year because of the new dependence on computer-assisted technology. Noop said the new brewery – by employing less to do more – contributed to the 65 percent increase in sales.

Another reason for success was the re-launch, of sorts, of the A.Le Coq brand name in June. The marketing campaign was nominated Estonia's best last year and helped put the new products on display.

"The history helps us a lot," Noop said. "The young don't remember the name, but grandfathers remember, my parents remember. When it entered it into the market again, they remember that time."

A.Le Coq is the former name of the Tartu brewery that was given up in 1940 at the beginning of the Soviet occupation. The then A.Le Coq was founded in 1807 in London to produce beer in Tartu for the Russian czars. It closed up shop until the name was introduced again last spring.

Besides beer, A.Le Coq Tartu Brewery produces non-alcoholic beverages such as mineral water and soft drinks. The company reported increased sales among the non-alcoholic products as well. However, Noop said while A.Le Coq will be committed to its entire product line, the main focus is the beer.

The company sold 55 percent more mineral water and 51 percent more soft drinks than in 1998. Additionally, A.Le Coq's exports rose 66 percent with Latvia, Lithuania and Sweden as the main export countries.

"First is beer, second is the ciders. Ciders are the future market here," he said. "We, of course, have to be active in every product group that we offer, and we will work heavily with product development, but our main focus is the beer."

Olvi OY also owns Cesu Alus in Latvia and 49.9 percent of the Ragutis Brewery in Lithuania.