Mid-priced beer loses space in the Brazilian market

Changes in consumer habits during the crisis have made mid-priced beers lost space for economic and premium categories. In this scenario, the highest-volume segment should only recover with a more robust economic upturn. "Mid-priced lager Beers, which represent the largest slice of the market, they're still losing ground due to the advancement of the premium category", Eurmonitor International report points out. According to the survey, there is a tendency among consumers to adopt an attitude of consuming less, but with more quality in the midst of slow economic recovery of the country. The President of Ambev, Bernard P, highlighted in a teleconference to reporters the growth in the premium segment of the company. "The global brands had a combined 40% advance and the places above 10%." P admits that the average price range is the most impacted by the crisis, but also the most benefits for the economic recovery. "The economic segment had a significant growth in the last four years. The more traditional beers also lost space for them. What will occur in the future depends on the economy. " He points out that, in case of confirmation of a more consistent improvement in 2019, the economic sector may even shrink. "Traditionally, we observed an evolution of consumer category in these times when the economy improves." P points out that the company made structural investments to compete in all categories. "We are ready for the upturn. My expectation is that it will be a little better, but not much, "he said. Swing on Thursday (25), Ambev reported net profit of Rs $7.913 billion January through September, up 73.9% compared to same period in 2017. The earnings before interest, taxes, depreciation and amortization (Ebitda) adjusted the first nine months of the year was R $13.623 billion, increase of 6% on the same basis. On the other hand, the net profit in the third quarter showed a fall of 10.2% compared to the previous year. "The industry as a whole had a better second quarter. Now, consumer confidence shows fall, there was no price adjustment and the environment of the country is not the best, depending on the voltage of the election period. Was negative for the entire industry, "said Paiva. In addition to the drop in sales of beer, 3.1% below the volume sold in Brazil in the second quarter, the results also reflected the crisis in Argentina. "There was an impact of hyperinflation that occurred in the neighboring country, which caused a contraction of consumption in the short term," says the Vice President financial and investor relations officer of Ambev, Fernando Tennenbaum. In the region made up of Chile, Argentina, Bolivia, Paraguay and Uruguay, the company presented a fall of 5% in the quarter. "The Argentine consumer confidence hit the lowest level of the last three years," he said. In the analysis of Bradesco BBI, the results were below the expected by the market. "The volumes in Brazil were 5% below our estimates, before a more competitive market," says the report. In view of the Bank's investment arm, the competition, especially with Heineken, caused a destabilization in the market. "Ambev has implemented some measures to combat this competition, how to introduce single-malt versions of their brands, but we still don't have clarity of purpose," the report said. Another highlight is that this dynamic makes it harder to price adjustment. "So, 2019 will be a challenging year for Ambev, as we estimate increased costs between 10% to 11%, unless there's stronger economic activity", the Bradesco BBI.