Beer in Brazil

PROSPECTS

Expected recovery in beer consumption fails to materialise in 2018

While beer producers in Brazil were initially optimistic about their prospects in 2018, especially considering it was a World Cup year, the expected recovery in demand failed to materialise. The category’s performance was further undermined by a 10-day truckers’ strike in May, which severely disrupted beer production and distribution.

Packaging shortfalls will continue to pose challenges for beer producers

Bottlenecks in packaging production also posed challenges for beer producers in 2018. The Brazilian glass industry struggled to meet demand, forcing beer manufacturers to leverage returnable systems or increase their use of metal beverage cans.

On-trade recovery not expected to curb off-trade beer consumption

During the recent economic crisis, many Brazilians sought to save money by drinking at home instead of going out to bars and other on-trade establishments. However, with economic conditions projected to improve from 2019, over the forecast period consumers should gradually increase spending on out-of-home leisure activities.

COMPETITIVE LANDSCAPE

Cia Brasileira de Bebidas diversifies its portfolio beyond mid-priced lager

Cia Brasileira de Bebidas is still heavily dependent on the mid-priced lager segment, where it offers brands like Skol, Brahma and Antarctica. However, with mid-priced brands being among the worst affected during the economic crisis, in recent years the company has worked to diversify its portfolio.

Heineken continues to perform strongly despite distribution dispute

Since acquiring Brasil Kirin, Heineken has faced challenges in formalising a new distribution structure in Brazil. This is partly due to a legal dispute arising from its decision to exit a contract with Coca-Cola bottlers responsible for distributing the company’s beer products.

Grupo Petrópolis focuses on strengthening its presence in the premium segment

After investing heavily in the premium version of its mid-priced lager brand Itaipava during the review period, Grupo Petrópolis is now focusing on new products to strengthen its presence in the premium segment. For example, in early 2018 it launched a number of added-value variants under its Black Princess brand.

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