Beer in Colombia

2021 DEVELOPMENTS

Beer shows improved performance at off- and on-trade levels

After having plummeted in 2020 due to lockdown measures and the home seclusion trend, on-trade volume sales of beer soared back into positive territory in 2021 as Colombians began frequenting foodservice outlets again following the rollout of COVID-19 vaccines and the relaxation of public health restrictions. With the easing of the pandemic supporting a strong economic recovery, improvements in consumer confidence and spending power further bolstered on-trade demand, as did an increased appetite for socialising among the local population and the gradual return of foreign tourists.

Category leader Bavaria to the fore in terms of new product development

New product development also helped to lift the overall performance of beer in 2021, with category leader Bavaria among the most active players in this regard. Following its introduction of Poker Roja in 2020, the company continued to expand this range with the launch of Poker Pura Malta, which is a more upscale variant but still has an affordable price positioning.

Premium brands in smaller and cheaper pack sizes gain popularity

Since the beginning of the pandemic many Colombians have started regularly drinking beer in moderation at home on a day-to-day basis, especially with meals, whereas previously they would have been more inclined to only consume this type of alcoholic beverage in larger quantities at weekends. In 2021 this trend continued to fuel demand for premium brands in smaller and more affordable pack sizes.

PROSPECTS AND OPPORTUNITIES

Robust growth in off- and on-trade beer consumption projected from 2022 onwards

Beer is set to perform positively throughout the forecast period, with robust growth in off- and on-trade volume sales projected. In the short-to-medium term, the category should continue to benefit as further improvements in epidemiological and economic conditions in Colombia strengthen consumer confidence, encourage higher levels of socialising and boost inbound tourism numbers.

Use of social responsibility initiatives to differentiate new brands likely to increase

Frequent new product developments will also help to drive the expansion of beer over the forecast period. While innovative ingredients or flavours and pricing strategies will remain the primary means by which manufacturers seek to differentiate new launches and win the attention of consumers, sustainability and social responsibility credentials should continue to gain importance in this regard.

Rising inflation expected to temper growth potential and shape consumer choices

Although the outlook for beer over the forecast period is broadly favourable, volume growth potential is likely to be constrained somewhat as rising inflation fuelled by the global recovery from the pandemic and the geopolitical fallout of Russia’s invasion of Ukraine continues to drive up unit prices and the general cost of living in Colombia. Price hikes and pressure on purchasing power are also expected to shape consumer choices within the category.