The future of a more concentrated market of juices and beers

São Paulo – the market of juices and beers is more concentrated in Brazil. In recent months, several companies have entered the Brazil or expanded its presence through acquisitions.
The consolidation is good for the market, according to analysts ears for may EXAME.com increase the strength of distribution of acquired brands and encourage an increase in the consumption of juices, still little explored by sector here.
Ambev announced the purchase of breweries Wälls, Minas Gerais, São Paulo and Colorado, in addition to the manufacturer of the juices well. She can also buy a Brazil factory Kirin.
Coca-Cola acquired the Ades, Unilever, for $ 575 million and the British incorporated Britvic Ebba, Maguary, to enter the Brazilian market.
Stronger and more present
The increase in concentration in the beverage market is largely influenced by the economic crisis in Brazil, affirms Paulo de Tarso Petroni, President of the Brazilian Association of the industry of Beer (CervBrasil). Inflation and the debt growing population "have compressed income for consumption of products like beer," he said.
According to him, only the large companies have more strength to go through those moments. "When the market and the consumer changes, these companies have agility and breath to meet the customer," said Petroni.
For Petroni, the size is also necessary to have a wide distribution network reaches 1.2 million points of sale in the country.
The beer market in Brazil is already quite concentrated. Only 4 companies control 96% of sales, which amount to 14 billion liters every year, according to CervBrasil, these companies.
As the microbrews and craft breweries don''t have scale or distribution force, they differ by the taste. Now, with the purchase of Ambev, the Wälls and the Colorado gain distribution capacity.
Sweet future
Already in the juices, the scenario is another, much less focused. "Companies don''t have such strength of distribution, which is essential in this market," said Adalberto Viviani, President of Concept, consulting firm specializing in food and drinks. As the juices have a lower profit margin, need to have a large volume of sales to make up for it.
Financial strength is also an important factor. "You buy the fruit harvest, freeze, prepare and will only sell long after. This requires a high working capital, "said the consultant. So, the trend is that companies gather around large structures.
Behind the acquisitions are also strategies to increase the portfolio of large companies. When the English group Britvic bought the Ebba, owner of the Maguary, he purchased his ticket to enter the Brazilian market, said Viviani.
Already the acquisition of Ades, who belonged to Unilever, the Cola is intended to expand the company''s portfolio in addition to soda drinks.
The soda company is trying to be more "healthy". She released the Del Valle 100% juice and Coca Cola Life, which replaces 50% of the sugar cane sugars by the natural sweetener stevia in the United States, and is investing in milk enriched with aloe vera drinks.
This movement of the sector may be beneficial to small businesses of juices as it can stimulate the increase in consumption of the beverage.
The per capita consumption of juices in Brazil is still small – in 2014, was 3.3 liters per inhabitant per year, according to the Brazilian Association of manufacturers of soft drinks and non-alcoholic beverages, Abir.
So, there is room for both large as small manufacturers. "Ambev, the well, will not grow on top of the small, but people still do not consume juice, said the consultant.
According to him, there is opportunity to consolidate in the niches, with higher average price, which does not depend on both a large distribution structure. Therefore, the future of juice manufacturers in Brazil can be sweeter.