Carbonates in Venezuela

PROSPECTS

Unreliable supply of inputs continues to hurt sales

The decline of domestic sugar production shaped the category in 2016 and continued to have an important influence during 2017. During the review period, the government – which has an almost complete monopoly over sugar imports – lost its ability to adequately supply the industry with imports.

Maturity limits expected growth

As the carbonates category has reached maturity, no substantial growth rates are expected over the forecast period. Given that neither the entrance of new players nor the development of non-exploited niches is anticipated, carbonates will have limited possibilities for expansion.

Venezuelans continue to choose regular colas over low calorie colas

The erratic supply of sugar has pushed the companies to increase the presence of reduced sugar versions of the main carbonated brands, charging the same unit prices as those of regular types. In 2017, regular cola carbonates performed better than their low-calorie counterparts, although both posted a volume decline.

COMPETITIVE LANDSCAPE

Coca-Cola is the single most important brand in 2017

Coca-Cola FEMSA de Venezuela SA led carbonates in 2017. The company enjoys great equity with domestic brands in the non-cola carbonates category, such as Hit (Orange, Pineapple, Grape and Apple), as well as Frescolita and Chinotto.

Pepsi-Cola Venezuela leads non-cola carbonates

The manufacturing and distribution of Pepsi-Cola Venezuela CA brands is the responsibility of Empresas Polar CA, which is the largest food company in the country. Combined, Pepsi-Cola Venezuela and Empresas Polar carbonates sales are very strong, with an important presence in non-cola carbonates, where the presence of domestic brands is more significant since all brands competing in malted barley beverages are local.

Lack of new products characterises the category in 2017

Shortages of raw materials, which continue to occur in 2017, have prevented manufacturers from venturing into new product developments, such as juice-based carbonates. As long as domestic sugar production continues to fail, it is very unlikely that manufacturers involved in the industry will venture into key launches.

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