Overview and evolution of the Brazilian beverages sector Industry report partial free sample Sao Paulo, June 2016
Revenue from beverages has risen on average 16% per year since 2004 but stagnated in 2013 with increase of alcoholic drinks, especially beer Sales evolution of the beverage sector in Brazil [R$ billions] Beverages net revenues Revenue breakdown per category 103.4 113.0 115.0 116.0 123.2 116.4 116.5 Others 73.2 70.1 82.7 47.2 52.3 59.3 Alcoholic 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2005 2015 Source: BNDES, articles and interviews, FALKE Information analysis 2
Among non-alcoholic beverages, soft drinks have the highest per capita consumption in Brazil but water has been gaining share Recent evolution in per capita consumption per non-alcoholic beverage category Per capita consumption of beverages [litres/year] Comments Growth: 05-15 31.5% 59.4% 2.5% 16.6% -18.1% Water Juices Others 2005 2015 Between 2005 and 2015, the non-alcoholic segment concentrated a significant share of the beverages market, ranging between 70% and 80% of total beverage consumption in Brazil. During the same period, there was an increase of 14.9 billion litres and an increase in "per capita" consumption from 235.5 litres in 2005 to an estimate of 286.0 litres for the year 2015. Between 2005 and 2015, consumption of hot drinks (coffee represents more than 90% of the category) dropped and juices have grown more slowly than soft drinks and especially water. drinks had a modest increase in per capita consumption, mainly due to the competition from soy-based drinks. Alcoholic drinks had an estimated increase of 6.8 billion litres, pulled mainly the beer segment due to the higher purchasing power of lower-income classes (main consumers). Source: BNDES, articles and interviews, FALKE Information analysis 3
Among major companies, Ambev reigns supreme followed by Coca Cola, Vigor, Pepsico and various other companies smaller in size Main players in the Brazilian beverages market in 2014 [US$ millions] Group or company Main segment Net revenue EBITDA Net income Assets Equity Ambev Beer 16,605.7 7,741.6 5,252.8 30,654.9 18,545.4 Coca-Cola FEMSA 3,308.7 476.0 151.0 4,399.0 1,141.2 Vigor 1,867.3 148.6 51.1 1,497.7 702.0 Brasil Kirin Beer 1,694.2 200.3 9.7 2,304.0 951.5 Pepsico 1,311.2 216.6 113.4 1,448.5 248.0 Itambe 1,042.0 86.6 45.8 504.7 248.4 Heineken Beer 940.0 213.3 66.3 608.0 483.0 Laticínios Bela Vista 649.0 46.2 39.2 277.1 147.8 Vonpar Refrescos Juices 647.0 62.6 47.7 387.6 187.6 Arosuco Juices 602.4 457.6 589.9 1,243.7 1,161.9 Norsa 594.5 96.3 45.2 507.8 212.9 Brasal Refrigerantes 261.2 34.0 25.1 152.6 94.2 Laticínios Jussara 221.1 13.0 0.4 136.4 49.9 Compar 204.1 41.8 34.6 211.1 165.5 Yakult 192.8 30.1 22.9 199.3 88.9 Cia. Muller de Bebidas Alcoholic drinks 187.3 18.9 2.1 141.4 32.6 EBBA Maguary/Dafruta Juices 185.8 19.2 1.6 158.8 23.4 Source: Exame, websites, FALKE Information analysis 4
Consumption of non-alcoholic is growing both per capita and in absolute terms but soft drinks account for only 28% of the segment Evolution of the non-alcoholic beverages segment in Brazil Per capita consumption [litres/year] Total consumption [bn litres] 244.3 253.2 277.2 279.3 273.9 292.0 302.4 285.9 46.8 49.0 54.2 55.1 54.6 58.7 61.3 58.5 2008 2009 2010 2011 2012 2013 2014 2015 Water Others Source: CANADEAN, BNDES, FALKE Information analysis 2008 2009 2010 2011 2012 2013 2014 2015 5
Ambev is the absolute leader in the beer segment, both in Brazil and in the rest of the world, and today holds the top 3 beer brands in Brazil Overview of Ambev s positioning in the beer market [in volume] Global market share (2015) Brazil market share (2015) Market share per brand (2014) 68% 40% 20% 24% 12% 9% 6% 5% 5% 11% 11% 9% 1% 10% 6% 4% 4% Amb Ambev Oth Sko Bra Boa Sch Ita Kai Source: Ambev, FALKE Information analysis 6
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