Beruflich Dokumente
Kultur Dokumente
Brazil
1
Who we are?
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Summary
WHO WE ARE? 2
SUMMARY 3
PRIX ET PRODUIT 15
PRICE 15
PRODUCTS 16
PRODUCTION - DISTRIBUTION 22
PRODUCTION – DISTRIBUTION 22
PRODUCTION 22
DISTRIBUTION 24
SEGMENTATION 27
UNDERSTANDING THE MARKET CONCENTRATION 28
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Market & Trends
Presentation
Present in everyday life, the Soft Drinks segment alone accounts for
62% of the Non-Alcoholic Drinks market revenue globally, with a
volume of sales of 245bnL in 2016 (equivalent to 42%).
Source: Statista
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Market
The Soft Drinks market is led by the United States (USA) – not by
accident the country of origin of the two largest market players, the
Coca-Cola Corporation and PepsiCo. The most important producers in
this segment worldwide are Coca-Cola Corporation, PepsiCo and Red
Bull. The market for non-alcoholic drinks is structured into off-trade
sales (in stores) and on-trade sales (in bars, restaurants etc.).
Source: Statista
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The Brazilian Soft Drink market is the fourth largest market in the
world. It is ahead of Mexico and only falls behind the USA, China and
Japan. Its expected total revenue for 2018 is of US$18,853M which is
very close to the US$19,669M and US$22,409M expected for the third
and second biggest markets respectively.
Source: Statista
The Brazilian Soft Drinks market combines the offers of the large
corporations, with Coca-Cola Company, AmBev and Heineken
(previously Brasil Kirin) leading the market with over 80% of market
share, and smaller producers with significant representation at
regional level and competitive prices that reach the lower classes.
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These producers are called Tubaínas, as it will be explained in the
market segmentation section.
Consumer Lifestyle
Source: Statista
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Source: Statista
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Source: Statista
Trends
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Source: own elaboration based on Statista data
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Source: ABIR
11
Regulation and Taxation
Brazil holds a complex tax system. As for the Soft Drinks, there are
four different taxes: IPI, ICMS, PIS and COFINS. The Imposto sobre
Produtos Industrializados (IPI) is a national tax and its rate for soft
drinks varies from 1.56% to 4%. The raw material of non-alcoholic
beverage products, e.g concentrate or syrup, has an aliquot of 20%.
The other three taxes are locally managed and thus their aliquots vary
according to the Brazilian State where production takes place or the
product is sold.
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• Soft Drinks
• Fruit-based Drinks
SWOT
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Forces Faiblesses
Force A Faiblesse A
Force B Faiblesse B
Force C Faiblesse C
Opportunités Menaces
Opportunité A Menace A
Opportunité B Menace B
Opportunité C Menace C
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Prix et produit
PRICE
The Soft Drinks’ prices vary according to the product sizing. According
to Statista data, although the volume per capita is expected to
decrease from 95.0L in 2018 to 89.3L in 2021, the average revenue
per capita should grow 2.3%, 2.6% and 2.8% by 2019, 2020 and 2021,
respectively. This means that the average price per unit in the
Brazilian Soft Drinks market that currently amounts to US$0.93 (in
2018) is expected to grow to US$1.07 in 2021.
Source: Statista
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The growth in revenue in spite of the decrease in the volume of sales
can be explained by the investment companies are making in smaller
packaging of their products as a response to the down-turn in sales
during the crisis.
PRODUCTS
In 2016, Coca-Cola led the soft drinks retail and wholesale market in
Brazil in sales with a 36.9% share. It was followed by Guaraná
Antarctica, a traditional soda made with guarana berry, with a 7%
share.
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Source: Statista
• Sodas:
Sodas are offered in all kinds of flavors, with a wide range of fruit
flavors available too – and exploring Brazil’s diversity with flavors like
guarana, passion fruit and other tropical tastes. The most consumed
flavors are cola, guarana and fruits (orange, lime, grape, etc.).
The drinks are sold in three kinds of packaging: PET bottles, cans and
glass bottles. PET bottles are the most diffused type of packaging and
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there are available in different sizes. According to Statista, PET
responded to 83% of the distribution of carbonated beverages.
Source: Statista
The brands try to offer a wide range of sizing for all the different life
occasions – the Sunday family lunch and birthdays to single doses –
and budgets. The small size presentation is also a market strategy of
the companies to even out the reduction in the sales volume that
have taken place in the past years. Albeit the price per liter is higher,
the small doses are more affordable to fulfill consumer’s desires in the
short term – particularly important if considered that impulse
consumption is a really in the 99% offline sale.
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1L, 750ml, 600ml and 400ml), glass bottles (1L, 290ml and 237ml) and
cans (350ml and 250ml). The reintroduction of the glass bottles in the
market was a strategy to compete with the Tubaínas and regain some
market share.
• Energy Drinks:
According to a 2018 survey conducted by Clint, 15.43% of the
respondents affirmed to regularly consume energy drinks. On the one
hand, this might indicate that the market has the potential to grow.
On the other hand, previous data from 2014 to 2016 on per capita
consumption shows a decrease from 0.7L per person to 0.54L per
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person. Regarding production, the volume produced has also
decreased in the 2014-2016 period.
Source: Statista
The Energy Drinks market is led by Red Bull with a 50% market share,
and followed by Coca-Cola’s Burn, Monster, TNT (owned by Cervejaria
Petrópolis) and AmBev’s Fusion. There are also smaller brands who
sell their products in PET bottles and tend to gain consumers in terms
of the price offered. As for packaging, energy drinks are usually sold in
cans and PET bottles.
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• Isotonic Drinks:
Isotonic Drinks are also known as Sports Drinks. These drinks are
available in different fruit flavors, such as orange, tutti-frutti, citrus,
tangerine, grape, etc. In 2016, the production of isotonic drinks in
Brazil amounted to more than 98 million liters, representing a
decrease from nearly 104 million liters a year earlier. The main market
players for isotonic drinks are Coca-Cola, Global Bev, AmBev/PepsiCo
and Ultrapan.
Source: Statista
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Production – Distribution
PRODUCTION
The crisis Brazil is facing has negatively affected the volume of soft
drinks. However, Statista’s forecast for the 2018-2021 period show a
reversion in the negative growth in terms of volume for this market.
22
Source: Statista
Besides water, the ingredients used to produce soft drinks are sugar
(or sweeteners), concentrate (or syrup) and carbonic gas (in the case
of the fizzy drinks). Preservatives, acidulants and antioxidants may
also be part of the ingredients.
The syrup is responsible for the color, aroma and flavor of the drinks.
According to BNDES, the most consumed flavors are cola, guarana and
fruits (orange, lime, grape, etc.). Since the syrup’s formula is an
industrial secret, they are produced in the company’s own industrial
facilities and later distributed to the partners and manufacturers
spread all over the country. A common location for the syrup’s
production in Brazil is the Free Economic Zone of Manaus, in the
North of the country. As a free economic zone, the production in the
zone is exempt from certain taxes and have reduced fees for others.
Coca-Cola Brasil has a factory there.
The Soft Drinks are produced in large amounts, mostly destined to the
internal market and presenting a relative homogeneity according to a
BNDES study. However, the increase in the population’s income
widened the opportunities for a market niche of more sophisticated
products. This process increased the demand for imported products.
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DISTRIBUTION
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Source: Statista
Source: Statista
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The giant AmBev has advantage given its superior distribution
structure, especially as for the distribution to restaurants and
commercial establishments. AmBev counts on an extensive system
with 114 warehouses around Brazil. The company has all its activities
and checks digitalized after the implementation of the Warehouse
Management System in 100% of its Distribution Centers operations.
Regarding cargo transportation, the company has a tracking system
monitoring 100% of its 5,000 trucks fleet. The Coca-Cola System
doesn’t fall behind with its network of franchised groups.
Since they lack a distribution structure like the large corporations, the
Tubaínas supply the demand close to their manufacturing facilities, or
at a regional level. The use of PET bottles has helped them reach more
consumers in supermarket sales and in larger volumes.
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SEGMENTATION
The Soft Drinks market in Brazil can be divided into two categories. On
the one hand, there are the big companies with large scale production
and distribution, high investments in marketing and branding. On the
other hand, there are the remaining small companies with a shorter
production and distribution capacity, usually commercialized in a
regional scale. These companies’ strategy is one of price competition.
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However, some of the Tubaínas have managed to move pass this
regional barrier and reach further markets. This is the case of Dolly
and Refrigerantes Convenção, for instance.
Source: AFREBRAS
Large corporations own over 80% of the market share and invest
more heavily in technology, distribution and marketing. The Coca-Cola
Brasil leads the market with a 57.8% share in 2017, followed by
AmBev with 16.4% and Heineken with 4%. One can notice that the
Brazilian Soft Drinks market is highly concentrated, a trend that has
been growing for decades with the acquisition of local and smaller
companies by the large corporations.
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Mergers and acquisitions have characterized the Soft Drinks market in
Brazil from the start. As a country of continental dimensions and given
the distribution characteristics and difficulties in this market, a spread
regional presence was necessary for increasing market access – and
consequently, profits.
The second largest player in this market, AmBev has a long history
with mergers. The company was created in 1999 as a result of the
union of two Brazilian breweries, Cervejaria Brahma and Companhia
Antarctica. The merger was analyzed by the antitrust authority who
voted in favor in March 2000, with some restrictions which included
the sell out of 5 factories and the share of its distribution network
with its competitor for the following 4 years. After the merger, AmBev
became the 5th largest beverage company in the world.
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In March 2004, AmBev and the Belgian brewer Interbrew merged,
forming the InBev. And, in 2008 the acquisition of the American
Anheuser-Busch by the Belgian-Brazilian InBev took place, forming the
giant Anheuser-Busch InBev SA/NV (abbreviated as AB InBev). Later in
2016 the merger finally took place, adding to the pile the British
SABMiller.
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Coca-Cola Brasil
http://www.cocacolabrasil.com.br/
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AmBev
http://www.ambev.com.br/
Location: Rua Dr. Renato Paes de Barros 1017 – 4th floor. São Paulo.
Zip code: 04530-000.
Identification: CNPJ 02.808.708/0001-07
Number of employees: 35,000 Brazil 2018
Net Income: 2.61B US$ Brazil 2016
Business Segmentation: Alcoholic and Non-alcoholic beverage
AmBev has a product line that comprises sodas, iced teas, energy
drinks and isotonic drinks in a wide range of flavors. The company’s
leading Soft Drink is the famous Guaraná Antarctica, which held a 7%
market share in 2016 right after Coca-Cola. Ambev acquired in 2016
the juice company “Do Bem” as a means to expand even more its
portfolio.
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Heineken
http://www.heinekenbrasil.com.br/
Brasil Kirin was part of the Japanese group Kirin Holding Company and
had previously acquired the Brazilian Schincariol and its portfolio of
Soft Drinks, waters and beers. The acquisition of Brasil Kirin by
Heineken put the company not only as a leading in the beer segment
(second place, behind AmBev), but among the top 3 in the Soft Drinks
segment in Brazil.
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Red Bull
https://energydrink-br.redbull.com/
Red Bull invests heavily in marketing and sponsors radical sports and
auto racing. Red Bull has a team in Stock Car Brasil since 2007, the Red
Bull Racing Brasil. It also supports a soccer team, known as the Red
Bull Brasil.
Red Bull leads the energy drink market in Brazil. It is the first name to
come in the client’s minds when they think about energy drinks.
However, its market share has decrease from over 60% in the last
decade to 50% in 2016. Its main competitors are Coca-Cola’s Burn,
Monster, TNT (owned by Cervejaria Petrópolis) and AmBev’s Fusion.
Smaller brands sell their products in PET bottles and tend to gain
consumers in terms of the price offered.
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Bebidas Fruki S.A
http://www.fruki.com.br/
Description: Bebidas Fruki S.A. produces and sells soft drinks, energy
drinks, juices, and mineral water. The company was founded in 1924
and is based in the city of Lajeado, in the South of Brazil. Over the
years, the company has expanded a lot in the South region of Brazil,
counting on a large distribution network in the region.
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Dolly
http://www.dolly.com.br/
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Refrigerantes Convenção
http://convencao.ind.br/
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