When Brazil’s
AmBev , a subsidiary of Belgium-based
Anheuser-Busch InBev , acquired control of Brazilian craft beer maker Wals
earlier this month for an undisclosed sum, the company was setting its sights on a growing segment of the industry that has already generated over $700 million a year in sales and expanded by double-digit percentages each year. AmBev’s stake in Brazil’s beer market is about 70%.
Founded in 1999 in the city of Belo Horizonte,
Wals had revenues of $3.16 million last year, just a fraction of
AB-InBev’s $43.17 billion in 2013. However, the company has managed to become one of the top players in Brazil’s craft beer market, which consists of more than 300 small breweries whose main products sell for as much as three times the price of industrial beer brands. The deal works both ways; The the maker of
Budweiser and Bud Light can combat soft sales by buying up popular craft brewers, and sell to a public willing to pay more for better quality.
It seems like this is the moment to invest in craft beer brands. While in the United States the craft beer industry already accounts for over 108,000 jobs, 6.5% of the total volume produced, and 10.2% of total beer sales, in Brazil these small breweries represent just about 0.15% of the total Brazilian beer market, considered the third-largest in the world. The room for growth is enormous. Retail giant
Grupo Pao de Acucar, which sells 150 brands of craft beer, has seen sales grow by an outstanding 80% annually. They are expected to represent 2% of the Brazilian beer market within the next 10 years. As a result, Pao de Acucar started training employees in several Brazilian cities to teach them beer culture and features, a process similar to developing wines and cheeses connoisseurs.
It is a market that is attracting companies from other areas too.
Rexam already produces the cans for several Brazilian craft beer brands, including Germania, New Age and Colonia Pilsen, and has recently introduced new technologies like the use of thermo chronic ink, which makes the can art change color when the beer’s temperature reaches 8 degrees Celsius. In addition, there are now many websites specializing in selling craft beer to customers all over Brazil.
Eyeing the segment’s growth, the
SEBRAE System, Brazil’s small business support department, is preparing to launch a producer training program to help small beer makers suit the market’s rules. Today, six brands are already part of the program. Naturally, new challenges begin to emerge as the craft beer industry grows. The tax burden, which affects the competition with imported beers, is one of them. Taxes now account for about 50% of the total production cost of a special beer. Not to mention the arrival of a variety of new players who have discovered the industry in recent years.
As for Wals, it is already on pace to becoming a high-end brand. Today the company produces about 25,000 bottles of beer every month (500 hectoliters), 1,000 of which are produced according to the Champenoise method, the traditional procedure for the production of champagne and characterized by a secondary fermentation in bottle. A 750ml bottle of Wals Brut Champagne can cost up to $100. Wals also operates 16 other beer labels, including seasonal ones.
The microbrewery is also set to merge with AmBev’s Bohemia, Brazil’s oldest brewery.
According to AmBev’s marketing director Daniel Wakswaser, the merger will create a new company, whose name has not been defined yet. The owners of Wals, Tiago Carneiro and Jose Felipe Carneiro, will have a stake in the new company. Wakswaser also stated that AmBev is considering other deals of that kind in Brazil.
Following is the full list with The 30 Best Craft Beers Available In Brazil, as compiled by AllBeers, a Brazilian website for beer sommeliers, and published by food and beverages magazine Prazeres da Mesa:
