Pikra hoping for can success in Siberia

The €9.2 million new production line, which has an output of 36,000 cans/hour (or 10 cans/second), was not due to come on stream until April, but close collaboration between the company and SIG Simonazzi, the Italian firm which installed the line, allowed testing to be completed far earlier than planned, said Pavel Steshin, Pikra's PR manager.

The first beers to be produced in the cans will be group's two leading brands Kupeceskoe and Leghenda, and the company said it would also begin producing a range of non-alcoholic drinks and low-alcohol cocktails in cans in the immediate future.

Daniil Breeman, Pikra's president, claims that Kupeceskoe in particular will offer consumers an excellent quality:price ratio in the canned beer sector.

Getting the new line up and running a month ahead of time could prove to be of vital importance for Pikra, given the fast-growing demand for beer in cans in Russia, the company said. Cans are seen as convenient to use, as well as simpler to produce, distribute and store than bottles, the traditional packaging for Russian beers.

The company added that the greater shelf life and ease of distribution afforded by the cans would also allow it to extend distribution further afield. At the moment, the brewer focuses primarily on the northern part of the Krasnoyarsk region, but it will now be able to extend its distribution further into eastern Russia - traditionally a difficult part of the country to reach.

Pikra will continue to sell some of its beers in glass bottles supplied, as before, by manufacturers in Ekaterinburg and St. Petersburg, but will invest increasing amounts in cans. Estimates suggest that the Russian tax coffers will grow by around RUR156 million each year as a result of the additional sales of beer in cans.

According to Breeman, Pikra has just 1.3 per cent of the Russian beer market, but has a solid position in its local market of Krasnoyarsk, Hakasiya and Tyva, where is accounts for around 33 per cent. But rather than seeking to compete with bigger brewers such as Baltika and Sun Interbrew in the more affluent western part of the country, Pikra is seeking to expand into the less populous east.

Its market share in Eastern Siberia is around 15 pc, but in western Siberia it has just 2 per cent of the market, while in the Russian Far East it accounts for just 6 per cent of sales. With beer market forecasts suggesting a downturn in sales in 2005 and beyond, as a result of tougher rules on beer consumption and advertising, Pikra is keen to grow sales by whatever means it can, and believes that the new can line will allow it to consolidate its position in eastern Siberia and to develop a larger share of the market.