Carlos Lisboa. Head of Marketing

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1 Carlos Lisboa Head of Marketing

2 Marketing Operations Brazilian Beer Market Overview AmBev s Marketing Strategy

3 The Brazilian Beer Market The 4th largest beer market in the world and growing Beer Volume Brazil (million HL) 87,5 85,6 89,3 91, E Source: LCA

4 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

5 Beer Consumer Profile Beer consumption is highly concentrated in young, middle class males 49% Penetration by Gender 62% 51% 38% 33% Penetration by Age 39% 29% 22% 19% 15% 13% 8% 13% 0% Male Total Population Female Beer Consumption under 18 years years years years years Total Population Beer Consumption 45% Penetration by Social Economic Level 39% 25% 31% 19% 27% 5% 9% Low Income Class Middle Class Upper-Middle Class Upper Class Total Population Beer Consumption Source: LCA,IBGE,Inbev

6 Beer Consumer Profile Beer consumption is highly concentrated in young, middle class males 49% Penetration by Gender 62% 51% 38% 33% Penetration by Age 39% 29% 22% 19% 15% 13% 8% 13% 0% Male Total Population Female Beer Consumption under 18 years years years years years Total Population Beer Consumption 45% Penetration by Social Economic Level 39% 25% 31% 19% 27% 5% 9% Low Income Class Middle Class Upper-Middle Class Upper Class Total Population Beer Consumption Source: LCA,IBGE,Inbev

7 Beer Consumer Profile Beer consumption is highly concentrated in young, middle class males 49% Penetration by Gender 62% 51% 38% 33% Penetration by Age 39% 29% 22% 19% 15% 13% 8% 13% 0% Male Total Population Female Beer Consumption under 18 years years years years years Total Population Beer Consumption 45% Penetration by Social Economic Level 39% 25% 31% 19% 27% 5% 9% Low Income Class Middle Class Upper-Middle Class Upper Class Total Population Beer Consumption Source: LCA,IBGE,Inbev

8 The Brazilian Beer Market Beer market is concentrated in AmBev s stronghold Volume Contribution by Channel Supermarkets 25% 30% On Premise (Bar) 62% 50% Volume Contribution by Packaging Can 28% Returnable 68% Grocery Stores 13% 20% Long Neck 4% Volume Contribution by Occasion Others 40% Beer Blast 60% Source: Nielsen, Ipsos

9 The Brazilian Beer Market AmBev is the clear market leader with high opportunity to grow the premium segment Volume Contribution by Market Segment Premium 4,5% Low Price 13,6% Core 81,8% AmBev Share by Segment Premium = 93% Core = 75% Low Price = 0% Lowprice: Core: Premium: < 85% price index 85% < x < 115% price index > 115% price index Source: Nielsen

10 Per Capita Beer Consumption 162 Vast Room for growth in Brazil despite being the 4 th largest beer market in the world 141 Per Capita Beer Consumption (in liters) Czech Republic Ireland (Rep) Germany Austria UK Denmark Belgium Spain Portugal Brazil Source: Canadean 2003

11 AmBev s Market Strategy Strengthen core performance Develop the premium segment Grow volume and profitability through per capita programs

12 Market Intelligence Decision making based on facts Exploratory Usage and Attitudes Behaviour Creative Sessions Development Product/ Package/ Price Tests Communications Tests Developing Launch Final Mix Test Market Simulation Consumer Consumer profile Market Segmentation Sales Data Sales Behavior at POS Service/ Sales Diagnosis Monitoring Brand Consumer Tracking Brand Equity Advertising/ Positioning

13 Exploring Usage and Attitudes Market trends and opportunities Identify key beverage occasions Describe each occasion Identify Key need sates Quantify occasion volume Map growth opportunities Beer Blast Daily Indulgence Flavor With Food Healthy Good Morning Light Snack Night Out On the Go Pit Stop Wake Up Key occasions

14 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 6 Attribute 7 3

15 Monitoring Brand Equity AmBev brands standing out in main category attributes AmBev 1 AmBev 1 AmBev 2 AmBev 1 AmBev 1 AmBev 1 AmBev 1 AmBev 2 40 AmBev 2 AmBev 3 AmBev AmBev 3 Competitor 1 Competitor 3 Competitor 2 AmBev 2 AmBev 2 AmBev 3 AmBev 2 Competitor 2-20 Competitor 1 Competitor 1 Competitor 1 Competitor 1-40 Competitor 2 AmBev 3 Competitor 2 Competitor 2 Competitor 3 AmBev 3 Competitor 3-60 Competitor 2-80 Attribute 1 Attribute 2 Attribute 3 Attribute 4 Attribute 5 Attribute 6

16 Consumer Tracking Preference is the most important brand image KPI for AmBev brands Preference Consideration Awareness

17 Consumer Tracking Robust and detailed information on our consumer for every brand in the Market * Gender Preference Social Economic Class Region Age (*) Data received twice a month

18 Market Intelligence Decision making based on facts Exploratory Usage and Attitudes Behaviour Creative Sessions Development Product/ Package/ Price Tests Communications Tests Developing Launch Final Mix Test Market Simulation Consumer Consumer profile Market Segmentation Sales Data Sales Behavior at POS Service/ Sales Diagnosis Monitoring Brand Consumer Tracking Brand Equity Advertising/ Positioning

19 Brand Preference Growth potential driven by gap between consumer preference and AmBev market share Molson 9,2 Petrópolis 5 Market Share Others 5,2 Consumer Preference AmBev Brands Others 19 Schincariol 12,6 AmBev 68 AmBev 81 Source: Nielsen, Ipsos, YTD 2005

20 AmBev s Market Strategy Strengthen core performance Develop the premium segment Grow volume and profitability, through per capita programs

21 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