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Beer Marketing in Brazil
Carlos Lisboa Head of Marketing Marketing Operations Brazilian Beer Market Overview AmBev’s Marketing Strategy The Brazilian Beer Market The 4th largest beer market in the world and growing Beer Volume – Brazil (million HL) 87,5 2002 Source: LCA 89,3 91,7 85,6 2003 2004 2005E The Brazilian Beer Market Volume, as disposable income, is concentrated in southern regions 64% of population 74% of GDP 75% Beer volume Source: IBGE, LCA Beer Consumer Profile Beer consumption is highly concentrated in young, middle class males Penetration by Gender Penetration by Age 62% 39% 33% 51% 49% 29% 38% 22% 15% 19% 13% 13% 8% 0% Male under 1 8 years Female Total Population 1 8 - 2 9 years 3 0 - 39 years Total Population Beer Consumption 45% 39% 31% 27% 19% 5% Low Income Class Middle Class Total Population Source: LCA,IBGE,Inbev Upper-Middle Class Beer Consumption 5 0 - 59 years Beer Consumption Penetration by Social Economic Level 25% 4 0 - 49 years 9% Upper Class The Brazilian Beer Market Beer market is concentrated in AmBev’s stronghold Volume Contribution by Channel - 2004 Supermarkets On Premise (Bar) 30% 25% 50% 62% Volume Contribution by Packaging - 2004 Can Returnable 28% 68% Long Neck Grocery Stores 4% 20% 13% Volume Contribution by Occasion - 2004 Beer Blast 60% Others 40% Source: Nielsen, Ipsos The Brazilian Beer Market AmBev is the clear market leader with high opportunity to grow the premium segment Volume Contribution by Market Segment Low Price 13,6% AmBev Share by Segment Premium 4,5% Core 81,8% Premium = 93% Core = 75% Low Price = 0% Lowprice: < 85% price index Core: 85% < x < 115% price index Premium: > 115% price index Source: Nielsen Per Capita Beer Consumption Vast Room for growth in Brazil despite being the 4 th largest beer market in the world Per Capita Beer Consumption (in liters) 162 141 119 113 99 97 97 84 63 49 Czech Ireland Republic (Rep) Source: Canadean 2003 Germany Austria UK Denmark Belgium Spain Portugal Brazil AmBev’s Market Strategy Strengthen core performance Develop the premium segment Grow volume and profitability through per capita programs Market Intelligence Decision making based on facts Development Exploratory Usage and Attitudes Behaviour Creative Sessions Consumer Product/ Package/ Price Tests Communications Tests Launch Final Mix Test Market Simulation Developing Monitoring Consumer profile Market Segmentation Brand Sales Sales Data Behavior at POS Service/ Sales Diagnosis Consumer Tracking Brand Equity Advertising/ Positioning Exploring Usage and Attitudes Market trends and opportunities Identify key beverage occasions Key occasions Beer Blast Daily Indulgence Flavor With Food Describe each occasion Healthy Good Morning Light Snack Identify Key need sates Night Out On the Go Quantify occasion volume Pit Stop Wake Up Map growth opportunities Brand Equity Brand positioning based on attributes proven to be relevant and diferentiated Attribute 1 32 Attribute 2 25 Attribute 3 18 Attribute 4 14 Attribute 5 9 Attribute 6 Attribute 7 6 3 Monitoring Brand Equity AmBev brands standing out in main category attributes 100 A mBev 1 80 60 A mBev 1 A mBev 1 A mBev 2 A mBev 1 A mBev 1 A mBev 2 A mBev 1 40 20 A mBev 3 A mBev 3 A mBev 2 A mBev 3 A mBev 2 Compet it o r 3 A mBev 2 A mBev 3 0 Compet it or 1 A mBev 2 Co mpet it o r 2 Co mpet it or 2 20 Co mpet it or 1 Co mpet it o r 1 Compet it o r 1 Compet it o r 2 40 Compet it o r 2 Co mpet it o r 2 A mBev 3 Compet it o r 1 A mBev 3 Compet it o r 3 Co mpet it or 3 Co mpet it or 2 60 80 Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5 Attribute 6 Consumer Tracking Preference is the most important brand image KPI for AmBev brands Preference Consideration Awareness Consumer Tracking Robust and detailed information on our consumer for every brand in the Market * Gender Social Economic Class Preference Age Region (*) Data received twice a month Market Intelligence Decision making based on facts Development Exploratory Usage and Attitudes Behaviour Creative Sessions Consumer Product/ Package/ Price Tests Communications Tests Launch Final Mix Test Market Simulation Developing Monitoring Consumer profile Market Segmentation Brand Sales Sales Data Behavior at POS Service/ Sales Diagnosis Consumer Tracking Brand Equity Advertising/ Positioning Brand Preference Growth potential driven by gap between consumer preference and AmBev market share Consumer Preference AmBev Brands Market Share Petrópolis 5 Others 5,2 Others 19 Molson 9,2 Schincariol 12,6 AmBev 68 Source: Nielsen, Ipsos, YTD 2005 AmBev 81 AmBev’s Market Strategy Strengthen core performance Develop the premium segment Grow volume and profitability, through per capita programs Core Portfolio Strategy Skol The leading brand in Brazil Youngest, most modern and innovative brand in the Brazilian market Brahma Second largest brand Strongly associated to Brazilian identity and male friendship Antarctica #3 national brand with strong regional presence in north and northeast More than a beer, a brewery recognized for beer expertise and quality “The Beer that Goes Down Round” Skol – A True National Brand National Brand Skol market share above 20% Source: Nielsen Skol X Competition Goes down smooth Young/Young spirit Skol Positioning “Skol. The beer that goes down round” Liquid Smooth and light liquid proposition Goes down round Spirit The most daring innovative and fun personality; resembles a young spirited life style Skol’s Success pillars 1 2 3 Positioning & Advertising Events Platform Product Innovation filmes Skol Skol’s Events Platform Provide a full brand experience Consolidate brand values: youth, daring, entertainment, innovation Leverage impact with young adults (core target) Skol’s Event Platform Skol’s Innovation Platform 1st can 1st long neck First 473mlCan Cold Pack Skol Beats Big Neck Skol’s Innovation Platform 2005 – Another Step Ahead Video Skol Skol’s Image Strong positioning leading to dominance of main category attributes 100 Skol 80 Skol A mBev 2 Skol Skol Skol 60 A mBev 2 Skol 40 20 A mBev 3 A mBev 3 A mBev 2 A mBev 3 A mBev 2 Comp et it o r 3 A mBev 2 A mBev 3 0 Compet it or 1 A mBev 2 Co mp et it o r 2 Co mpet it or 2 20 Co mpet it or 1 Co mp et it o r 1 Comp et it o r 1 Comp et it o r 2 40 Comp et it o r 2 Co mp et it o r 2 A mBev 3 Comp et it o r 1 A mBev 3 Comp et it o r 3 Co mpet it or 3 Co mpet it or 2 60 80 Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5 Attribute 6 Skol´s Market Share Evolution Strong positioning leading to great market results 32,1% 14,6% 1995 Source: Nielsen YTD 2005 “The Beer that Goes Down Round” Brahma Brahma Leading brand in the most important market – São Paulo Brahma market share above 20% Source: Nielsen Brahma Positioning Male friendship Brazilian spirit – “Ginga” Brahma Positioning Video Brahma Brahma BOA (“The Good One”) Antarctica 3rd position in Brazil Strong presence in North and Northeast Antarctica market share above 20% Source: Nielsen Antarctica’s Positioning More than a beer, a brewery Quality and beer expertise Antarctica’s Positioning Regional Events Video antarctica BOA (“The Good One”) Video antarctica 2 Core Portfolio Strategy Skol The leading brand in Brazil Youngest, most modern and innovative brand in the Brazilian market Brahma Second largest brand Strongly associated to Brazilian identity and male friendship Antarctica #3 national brand with strong regional presence in north and northeast More than a beer, a brewery recognized for beer expertise and quality AmBev’s Marketing Strategy Strengthen core performance Develop the premium segment Grow volume and profitability through per capita programs Premium Segment Premium segment more than doubled participation in the total beer volume since 1998 Premium Segment (% Volume) Source: Nielsen 2% 4,5% 4% Brazil - 1998 Brazil - 2004 Premium Segment And there is still plenty of room for growth Premium Segment (% Volume) 45% 33% 15% 7% 2% 4% 5% Brazil - 1998 Brazil - 2004 Source: Inbev Ukraine USA France Belgium Premium Segment A comparison between beer and other consumption categories in Brazil also suggests room for further development of the premium segment Premium Segment (% Value) 31% 152 Mass Consumption Categories Source: Nielsen 2004 7% Beer Premium Categories AmBev has the highest market share and the leading brand in all premium categories Premium Volume Contribution by category Night Out 8% Non Alcohol 14% Dark 28% Source: Nielsen 2004 Premium Pilsen AmBev Segment 50% Market Share Leading Brand Premium Pilsen 93% Bohemia Dark 72% Caracu Night Out 49% Skol Beats Non-Alcohol 49% Kronenbier Premium Pilsen Bohemia leading the premium pilsen growth in Brazil and in a position to become a 4 th big player for Ambev Bohemia Market Share (Total Beer) 1.80% 3X 0.60% 2000 Source: Nielsen 2004 Premium Pilsen - Bohemia The first beer in Brazil Heritage, Superior Quality Premium Pilsen - Bohemia Kit Imagem Bucket Metal sign Proprietary Merchandising Material Refrigerator Special Glass Premium Pilsen - Bohemia Bohemia Line Extensions Premium Pilsen - Bohemia Video Bohemia AmBev’s Marketing Strategy Strengthen core performance Develop premium segment Grow volume and profitability through per capita programs Beverage Share of Stomach Looking beyond the category is the name of the game 9% Beer 15% 45% CSD Tap water Other 31% Source: InBev study Beverage Map of Occasions Strategy focused on 3 key occasions: 80% of beer consumption Beer Blast 60% Beer volume Daily Indulgence Flavor With Food Healthy Good Morning Light Snack Night Out On the Go Pit Stop Wake Up Night Out 2 nd Most Important Ocasion for Beer Alcohol Dominance Product Test Concept & Mix Test Innocheck Brainstorming Mapping Night Out U&A Skol Beats - Innovation Funnel Communication Test Mapping Night Out Main Need States ‘Cool’ name Premiumness Good taste Leaves no residual taste Thirst-quenching Relatively higher alcohol content Skol Beats Concept Skol Beats sets up the right mood for a night out Emotionally Stylish Packaging Right Brand Support Functionally Higher Alcohol Content Less Bitterness Cleaner After Taste Skol Beats - Out of Home Media Sign on buildings Stand Skol Beats – Proprietary Materials Wall Display Light signs Buckets Neon Skol Beats – Volume Results Skol Beats Volume Evolution (in 000hl) 140 111 93 7 2002 2003 2004 2 X Alcoholpops Source:InBev 2005E Night Out Up Beat Relaxed Stella Artois Sofistication Since 1366 European Breweing Heritage Stella Artois NYSE § ABV § ABVc Proprietary Materials Draft Beer – New Concepts Locations with high concentrations of people Home consumption Kiosk Chopp da Brahma Providing the same quality and service of a regular bar Kiosk Chopp da Brahma Expansion Results in 2004: The biggest growth among food & beverage franchising chains 25 24 2005 22 40 Kiosks 19 18 Throughout Brazil 17 16 16 12 Quiosque Chopp Brahma* Casa do McDonald´s Dunkin´ Pão de Donuts Queijo source: ABF 2004 Habib´s Bob´s Spoleto MR. Pretzels Rei do Mate 12 China In Box Home Consumption Chopp Express Store: brand experience and delivery Non Alcohol Segment BEER LOVERS Non Alcohol Segment With the launch of Liber, AmBev gained market share and increased the segment Non Alcohol Market Growth 6% Before Liber launching (04 x 03) After Liber launching (05 x 04) -6% AmBev Market Share 57 % 46% 'Aug-0 4 Source:Nielsen jul/0 5 AmBev’s Marketing Strategy Strengthen core performance Develop premium segment Grow volume and profitability through per capita programs AmBev’s Marketing Strategy Strengthen core performance Develop premium segment Grow volume and profitability through per capita programs
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