RESEARCH: Brazilian soft drink companies challenging multi-nationals
The hundreds of independent regional producers, known as ‘tubaineiros’, have increased their market share significantly in the last five years, particularly in the burgeoning packaged water and carbonates sectors, say leading beverage industry analysts, Canadean.
At the same time, market leader Coca-Cola has seen sales fall by over 10% and Pepsi-Cola has lost a quarter of volume, while major local producer Ambev has suffered badly from the price cutting techniques of the ‘tubaineiros’.
All categories, if not companies, have seen significant increases from the explosive growth of the sector over the last decade, which has raised per capita consumption of soft drinks from around 50 to nearly 120 litres, but the outstanding performers have been packaged water, which has risen almost 250%, carbonates, where sales have more than doubled and fruit powders, up by over 90%.
The packaged water market is served by literally thousands of producers, but with per capita consumption standing at a lowly 10 litres, Canadean believes there is considerable scope to increase sales. Leading Brazilian producer Edson Queiroz is one of the few companies to operate outside of its own region at present, but the multi-nationals are starting to take more interest and a number of forthcoming acquisitions are expected to lead to a degree of consolidation.
Brazil has the third largest carbonates market in the world and the sector accounts for nearly two thirds of soft drinks and over one quarter of all beverage sales. The smaller producers have increased their share at the expense of Coca-Cola and Pepsi-Cola in recent years, but in view of the market’s size and maturity, growth this year is unlikely to exceed last year’s 4%.
Although fruit powders’ has consistently grown faster in percentage terms than all soft drinks, and a further double-digit increase is predicted for this year, the main beneficiaries will continue to be Kraft General Foods and Unilever, who between them now control almost 90 per cent of the market.
Since the mid 1990s the role of returnable glass for soft drinks packaging in Brazil has diminished due to the availability of locally produced PET bottles, which now account for over 60 per cent of soft drinks fillings. Glass, however, remains the preferred option for sports and energy drinks. Indeed Gatorade only recovered market share after owner, Pepsi-Cola, reverted to the use of glass following an unsuccessful switch to PET.
Looking ahead, Canadean believes that the recent trend of expansion will continue with soft drinks consumption rising once again this year, pushing the sector’s share of commercial beverage sales to over 40 per cent.
A recent report on the UK soft drinks market showed that growth in non-carbonates at the expense of traditional carbonated soft drinks is much less marked in the on-premise sector than in the take-hom...
The global roll-out of InBev's Brazilian beer, Brahma, adds a third premium brand to the global brewer's international portfolio but some observers have suggested it's an unnecessary step which threat...
Functional soft drinks are relatively undeveloped in Latin America in comparison with Europe but there is significant growth potential. Hope Lee of industry analysts, Euromonitor International, examin...
The Pepsi Bottling Group today reported second quarter net income of US$148m, or diluted earnings per share (EPS) of $0.59. The results were up on the same period last year as the company grew volumes...
Pepsi-Co. has been removed from a Syrian blacklist of companies which have dealings with Israel, according to a report in the official Syrian newspaper al-Thawra....
Pepsi has launched a new 50cl silver-coloured bottle for its Pepsi light soft drink as part of a major advertising campaign to roll out this summer in Spain....
PepsiCo's president and CFO, Indra Nooyi, has been forced to apologise for remarks she made whilst speaking to the 2005 graduating class of Columbia University's Business School in New York City last ...
PepsiCo has confirmed that it is to drop its low-calorie drink Pepsi Edge....
- just The Preview - Pernod Ricard's Q4 & FY
- Comment - Hybrid Spirits: Innovation or Laziness?
- Comment - Another One Bites Bacardi's Dust
- CCA - Coca-Cola's Canary in the Mine
- Brown-Forman's Q1 Performance by Region, Brand
- Mast-Jägermeister targets UK off-trade boost
- SABMiller exec to become CFO at Beam Suntory
- Brown-Forman unveils Jack Daniel's UK push
- Bacardi announces CFO switch
- Champagne will not regain lost ground until 2018