As per the reports given by Canadean, the key market issues in Brazil market include small or regional companies, especially price driven brands, have started to withdraw from the market due to lack of capital and professional management. In addition there is an increase in purchasing power among low income consumers, over the past few years, due to which the search for more sophisticated beers has occurred among the high income consumers.
Brazil is the world’s third largest market for beer in terms of volume consumption, with volume sales of 12.7 billion litres in 2011 equivalent to 67 litres per capita up 22% from 10.4 billion litres in 2007, with only China and the US ahead. This year the market is set to break the 13 billion mark to reach 13.3 litres. Moreover, the appeal of beer appears set to continue in Brazil, as Mintel forecasts volume growth of 15% over the next five years to reach 15.3 billion litres in 2017. With a retail value of US$23bn in 2012 which is more than US$13.7bn in 2007, the future also looks positive with total retail value set to hit US$33bn by 2017.
As per the new researches from Mintel, out of the 20 beers sold in Brazil, 19 are accounting for local beer brands which mean the customers demand on local beers is larger than premium beers. The premium end of the market instigated a change in taste for Brazilian consumers, due to which the volumes of standard beer decreased by 2% year on year to 2011 and volumes of strong and premium beer grew an impressive 18%.
The off-trade strong and premium beer market was valued at R$ 5.29bn in 2011 shows how popular these beers are becoming. In 2011 this segment managed to gain a 0.6% share from the standard segment in value, rising from 11.4% market share in 2010 to 12% in 2011. In comparison, the standard beer segment lost market share, going from 87.6% in 2010 to 87% in 2011.
According to the reports, today, 25% of upper-class Brazilians i.e. AB social segment drink premium international brands, compared to 18% in the C1 group, 11% in the C2 group and 7% in the D and E social segments.
As per the reports from Mintel, Sebastian Concha, research director Latin America at Mintel, said that premium beers are gaining more market share in Brazil as compared to the standard beer due to change in consumer mindset as well as beverage habits of the consumers. Mintel’s report also tells that low temperature is also one of the key beer selling factors in Brazil. The high level of consumer demand for super cold beers has led to innovation in NPD in the market, including colour-changing packaging and cold filtering.