After a rough start in 2020 with significant decreases in volume and the closure of on-trade outlets, beer sales saw an unexpected rebound in consumption starting from Q2. As the dust settled and the population grew accustomed to COVID-19, even though the country saw increasing number of cases and deaths, the consumer decidedly looked for indulgence opportunities and opportunities to meet their friends and family.
Q1 2020 was not easy for Ambev, the biggest beer player in Brazil, but it was not easy for anyone else either. What made Ambev go from certain loss to ending the last quarter with growth in volumes was a variety of strategies and playing to its strengths.
Although bigger companies were able to continue performing well in Q2 2020 due to their already strong position, share of mind and logistics, the same did not apply for what was the growing premium and specialty beer market which suffered heavy losses in volume in 2020 from a more rational consumer who prioritised cheaper brands, and a lack of glass bottles in the market.
2020 proved a challenging year for all the beer companies, not only being affected by COVID-19 but all the consequences of it, mainly logistics problems. It was unclear for a while how COVID-19 would impact production, shipments, logistics and freight prices and after the consolidation of the year it became clear which strengths supported and will continue to support the beer market in Brazil: Accessibility.
K-shaped recoveries were debated extensively in the last year as it became clearer how the different income consumers behaved differently and had different consequences for the market. Mid-price brands were dropped, as the consumer became more rational and feared income or employment loss, while economy brands were able to grow due to the issuing of a “Corona Voucher”, the government incentive for casual workers.
The search for low or no alcoholic options did not wane during 2020, in fact the launch of Heineken 0.0, its zero-alcohol beer option, increased and showed the market and consumers how a zero abv beer can be positioned, sold, marketed, and produced.
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This report originates from Passport, our Beer research and analysis database.
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