Ambev Stock- Heineken escalates Brazil beer war
SAO PAULO: Heineken, the Dutch brewing giant, is exploring all aspects of its business – products, packaging, marketing and distribution – as it steps up its challenge to rival AB InBev in Brazil.
Last year’s acquisition of the Brazil operation of Japanese brewer Kirin doubled Heineken’s share in this market to almost 20%, but that remains a long way behind AB InBev-owned Ambev which claims more than 60%.
The purchase was part of a strategy that has seen Heineken expand its product offer from the top and bottom ends of the market to embrace all points in between.
“Today we have a portfolio that allows us to play in all segments that matter in Brazil,” said Marc Busain, Heineken’s President of Americas. “We have plans to transform Brazil into one of Heineken’s top markets,” he told Reuters.
At the same time, the company has been expanding its geographical coverage into the country’s poorer north east, where the per-capita consumption of beer is half that of the richer south east and where it faces the challenge of attracting drinkers more accustomed to the local cane spirit, cachaça.
One area where Heineken can bring its experience to bear is in the sponsorship of the Salvador carnival by Schin, the budget beer brand acquired from Kirin. Back in 2010, for example, Heineken was turning New Year’s Eve in Vietnam into a brand platform.
It is also looking at producing smaller bottles for the region as a way of lowering prices for more premium brands.
More generally, Heineken is investing in bar refurbishments as a way to persuade owners to stock only their products; around 45% of beer volume sales in Brazil are via bar.
In addition, it is building new distribution centres as it seeks to move away from an existing contract that ties distribution to a Coca-Cola bottling unit to a system that is purely focused on beer.
Sourced from Reuters; additional content by WARC staff