Beer in Venezuela
Euromonitor International's Beer in Venezuela market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 60 | Publication date: Jan 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Dark beer; Lager by origin; Lager by price platform; Low/non- alcohol beer; Stout
Executive summary
Consumers demonstrated a marked preference for light beers in 2008, driving manufacturers to devote extra attention to developing and marketing these types of products. While this trend is not brand new, it has become one of the most influential trends within the Venezuelan beer sector, especially among consumers aged 21-35 years old. According to several industry sources, consumers in this age group are exhibiting an increased preference for light and refreshing beers because they are easier to drink and leave consumers feeling less full after consumption. This preference also includes beers that have a lower content of alcohol, since they can be consumed in greater quantities over the course of a night. Several manufacturers are benefiting from this growing trend, including AmBev, which launched Extra Light de Brahma in 2008. The product is 4% ABV and comes in a 300ml glass bottle. The company was motivated to launch the product after months of market research that convinced it of the strength of this trend. Empresas Polar was another company that paid extra attention to its light beers in 2008 in the hope of spurring sales, investing extra resources in a new marketing campaign to advertise its Polar Light brand. The new campaign received about 30% of the brand’s annual advertising budget with the specific goal of targeting young adults. The campaign worked, with Polar Light achieving the highest sales growth of any other brand in the Empresas Polar portfolio.
Volume growth in the sector was slightly higher than that of the previous year despite an overall economic slowdown in 2008 that contributed to a decline in overall consumer purchasing power. The beer sector was somewhat shielded from this decline because beer is the least expensive product in alcoholic drinks and therefore benefited from consumers trading down to cheaper alternatives. Moreover, Venezuela has established a strong beer-drinking culture, allowing beer to be less affected by negative shocks than other types of alcoholic drinks.
Imported premium lager was the fastest growing category in volume terms, but this was mostly due to its extremely low penetration compared to other types of beer. In 2008 the category accounted for sales of only three million litres, equating to around 0.1% of total beer volumes. Demand for imported premium lager was largely unaffected by the significant rise in the price of imported alcoholic drinks (stemming from the repeal of preferential currency rates for these products) due to its negligible presence in the market. Consumption of these products is limited to high-income consumers, whose demand preferences are quite inelastic given their large amounts of disposable income and the relatively small share that beer assumes in their consumption budget.
Unit prices registered a significant jump in 2008, especially for those products imported from abroad. As mentioned above, the Chávez administration repealed a regulation which gave importers of alcoholic drinks access to preferential currency rates, causing the local currency price of these products to skyrocket. As a result, the price of imported premium lager increased more than any other beer category. However, the increase experienced by other categories was also particularly high, due to the rising rate of domestic inflation plaguing the Venezuelan economy.
Domestic standard lager continues to remain the most popular beer type, accounting for close to 97% of total sector volumes. Premium lager is the next largest category at 3% of sector volumes. Domestic manufacturers have yet to successfully launch products in dark beer or stout, despite global trends in beer consumption favouring these types of products. Industry sources reference traditional beer preferences and the increasing demand for light and refreshing products as the main barriers to the launch of these more value-added products. Attempts were made in the past with products like Polar Bock, Polar La Negra and Brahma Stout, but all failed to generate sizeable demand within a reasonable time period to be worthy of sustained manufacturer support. There are some imported brands within these categories, but distribution is extremely limited.
The first low/non-alcohol beer was launched in December 2007 by Empresas Polar and was named Polar Zero. The launch signified growing segmentation in the Venezuelan beer sector, with an increasing array of products for different consumer tastes. In its first year Polar Zero recorded respectable sales, propelling the low/non-alcohol beer category ahead of imported premium lager with over seven million litres sold. Empresas Polar was motivated to launch the beer after market studies confirmed a gap in the market for consumers wanting a refreshing product like beer but without the alcohol content.
Trends in the beer sector are largely the same in both on-trade and off-trade sales. However, it is important to note that increasing security concerns are causing fewer Venezuelans to go out at night, which is negatively impacting the growth potential of on-trade sales. As a result, manufacturers are shifting resources away from this once dynamic channel and putting more emphasis on driving off-trade sales. Most of these efforts take the form of marketing campaigns that try to increase the consumption occasions for beer, providing consumers with creative ideas for parties and social events.
The typical alcohol content of lager in Venezuela is 4.5% ABV. There is a growing trend, especially among younger consumers, for beers with a lower alcohol content due to their more refreshing nature.
PRODUCTION, IMPORTS AND EXPORTS
Domestic production of beer continues to be dominated by the main domestic breweries: Empresas Polar CA, Cervecera Regional CA and Cervecería Nacional CA. These three companies are responsible for around 99.8% of Venezuela’s domestic beer production. The companies increased their production output over the 2003-2008 period in order to respond to increasing domestic demand as well as increased foreign demand in popular export markets like neighbouring Colombia and some Caribbean nations.
Imported beer is considered a premium product in Venezuela and has a very small market presence. The most important company with regard to imported beer is D’Ambrosio Hnos SA, which imports Corona Extra and Negra Modelo from Mexico as well as the Beck’s brand from Germany. The Dutch brand Heineken (imported by Alnova CA) is another popular imported brand and trails only the leader Corona in retail volume sales. Importers are facing increasing challenges in importing products into Venezuela as the Venezuelan Commission for Currency Administration (CADIVI) has imposed increased restrictions which have delayed and limited the amount of imports that can enter the country.
Imported lager accounts for a tiny fraction of the country’s overall sales at less than 0.1%. Domestic lager is king in Venezuela, accounting for almost all beer sales. Domestic products are priced significantly lower than imported ones, making them much more accessible to consumers.
Table of contents
ALCOHOLIC DRINKS IN VENEZUELA : MARKET INSIGHT
EXECUTIVE SUMMARY
Industry maintains growth despite decrease in consumer purchasing power
Growing interest in gastronomy supports strong growth in wine
Empresas Polar CA increases its overwhelming lead of the industry
Specialists increase their share of off-trade volume sales
Volume growth expected to slow as the Venezuelan economy cools down
KEY TRENDS AND DEVELOPMENTS
Large young adult population allows manufacturers to grow their consumer base, but requires modernisation of marketing techniques
Security concerns restrict on-trade growth
Attention to health having a stronger influence on consumption decisions
Aspirational behaviour shapes the development of alcoholic drinks
Specialist Retailers
Summary 1 Leading Specialist Retailers 2007
Market Merger and Acquisition Activity
Summary 2 Speculated Merger and Acquisition Activity 2007-2008
LEGISLATION
TAXATION AND DUTY LEVIES
Table 1 Taxation and Duty Levies on Alcoholic Drinks 2008 (5)
Table 2 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 3 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 2008
Table 4 Selling Margin of a Typical Domestically Produced Beer Brand 2008
Table 5 Selling Margin of a Typical Imported Wine Brand 2008
Table 6 Selling Margin of a Typical Imported Spirits Brand 2008
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 7 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 8 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 9 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 11 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 12 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 14 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 15 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 16 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 17 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 18 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 19 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 20 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 21 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 22 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
DEFINITIONS
Summary 3 Research Sources
LOCAL COMPANY PROFILES - VENEZUELA
CERVECERA REGIONAL CA - ALCOHOLIC DRINKS - VENEZUELA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Cervecera Regional CA Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 5 Cervecera Regional CA: Production Statistics 2005
COMPETITIVE POSITIONING
Summary 6 Cervecera Regional CA: Competitive Position 2007
EMPRESAS POLAR CA - ALCOHOLIC DRINKS - VENEZUELA
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Empresas Polar CA: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 8 Empresas Polar CA: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 9 Empresas Polar CA: Competitive Position 2007
PONCHE CREMA CA - ALCOHOLIC DRINKS - VENEZUELA
STRATEGIC DIRECTION
KEY FACTS
Summary 10 Ponche Crema CA: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 11 Ponche Crema CA: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 12 Ponche Crema CA: Competitive Position 2007
RON SANTA TERESA CA - ALCOHOLIC DRINKS - VENEZUELA
STRATEGIC DIRECTION
KEY FACTS
Summary 13 Ron Santa Teresa CA: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 14 Ron Santa Teresa CA: Production Statistics 2005
COMPETITIVE POSITIONING
Summary 15 Ron Santa Teresa SA: Competitive Position 2007
TAMAYO & CíA SA - ALCOHOLIC DRINKS - VENEZUELA
STRATEGIC DIRECTION
KEY FACTS
Summary 16 Tamayo & Cía SA: Key Facts
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 17 Tamayo & Cía SA: Competitive Position 2007
BEER IN VENEZUELA
HEADLINES
TRENDS
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager price band methodology
Summary 18 Lager by Price Band 2008
Published data comparisons
SECTOR DATA
Table 23 Sales of Beer by Subsector: Total Volume 2003-2008
Table 24 Sales of Beer by Subsector: Total Value 2003-2008
Table 25 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 26 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 27 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 28 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 29 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 31 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 32 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 33 Beer Exports by Country of Destination: Total Value 2002-2007
Table 34 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 35 Beer Imports by Country of Origin: Total Value 2002-2007
Table 36 Company Shares of Beer by National Brand Owner 2003-2007
Table 37 Company Shares of Beer by Global Brand Owner 2003-2007
Table 38 Brand Shares of Beer 2004-2007
Table 39 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 40 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 41 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 42 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013