Brazil's Beer Market Analysis - Grolsch

Only available on StudyMode
  • Download(s) : 363
  • Published : November 7, 2012
Open Document
Text Preview
Beer market in Brazil
Brazil is the 5th largest country in the world with total population of 194 million. Total beer consumption in Brazil in year 2012 is estimated to be 11,563.9 million liters. Which means each person in Brazil is going to consume an average of 60 liters per year. The Brazilian beer market generated total revenue of $24.55 billion in year 2011. As stated by DataMonitor (2011), the market share for standard lager in Brazil is 86.3% and premium lager is 7.0%. Which means premium lager generated $3.5 billion from the total revenue. The performance of the market is expected to be accelerated, with an anticipated CAGR of 6.5% for the next five year period 2012-2017, which will drive the market to a value of $35.8 billion by the end of year 2017. The Market

According to Euromonitor International (Jan 2012),Brazil beer market saw total volume growth of 4% in 2011, which was lower than the expected CAGR of 6.5% registered over the review period. However, the beer market in Brazil is considered to keep growing and improving. As reported by Portuguese American Journal (30th July 2011), Pope Benedict XVI will visit the country at the occasion of World Youth Day event in 2013, as well as the soccer Confederations Cup will be held on the same year. In 2014, twelve Brazilian cities will host the soccer World Cup. Therefore, the performance of Brazil beer market is forecast to improve, with an anticipated CAGR of 6.5% As stated by DataMonitor (2011),Anheuser-Busch InBev (AB InBev) is the leading player of Brazil beer market, roughly holding 66.7% of market volume. American Beverage ( Ambev ), one of the subsidiaries of AB InBev, has had an incredibly successful time in post-global crisis Brazil. Ambev radically control about 66.7% of the market and has solid relations with most bars and retailers and it has served as a powerful deterrent to foreign competitors.

Standard lager is the largest segment of the Brazil beer market as shown by DataMonitor(2011). The most popular beers in Brazil are Skol and Brahma. They also have Heineken in Brazil, but it is imported and expensive and also thought of as more “high class” among normal people. It isn’t found as often as the other Brazilian beers, Brahma and Skol being ubiquitous in Brazil. 

In Brazil beer market, producers able to differentiate their beers not only by overall segments (lager or bitter) but also by their brands, ingredients, and packaging style. Therefore, consumers have too much of choices and the switching cost of the buyer is not particularly high. Moreover, the beer market in Brazil consists of few substitutes such as wine, whiskey, functional drinks, and champagnes. Oppurtunities

Beer “must be sold’ at Brazil World Cup
BBC (19th Jan 2012) reported that beer must be sold at all venues hosting matches in the 2014 World Cup in Brazil, football’s world governing body, Fifa, has insisted.
Under pressure from FIFA, the Senate of Brazil has approved legislation which allows beer sales in football stadium during the 2014 World Cup. This is one of the biggest events that will increase the revenue of the year. This is an opportunity for Grolsch to generate a huge margin here.

Brazil’s beer technology
Brazil has a very advance beer technology as it has varies type of beer in Brazil’s market. Brazil Brau ( the only meeting of the professional brewing industry in Brazil), it is the only exclusive event of the brewing industry in Brazil, it brings together companies and internationally renowned institutions to provide the latest beer technology. The next exibition, which will take place from 25 to 27 June, 2013. Infrastructure in Brazil

Information from DHL’s website (Logistics in Brazil) stated that, Brazil’s transport system is heavily dependent on the highway network. There are 60% of total transport volume is handled by it. The quality of rail transport in Brazil is poorly developed and parts of it are in bad condition. It is primarily based...
tracking img