Among the 1.3 million bars and restaurants in Brazil, there is a select team of 200,000 points of sale considered “opinion makers”. They are establishments that have been recognized for decades, with consolidated clientele, or that bring new concepts to the market, quickly attracting a qualified public, according to the definition of Abrasel (Brazilian Association of Bars and Restaurants).
In the last 12 years, since the arrival of the Heineken brewery in Brazil, these bars have become a battleground between the Dutch brewery and its Belgian-Brazilian archrival AB Inbev, owner of the Brazilian Ambev and around 500 brands in the world –among them, national brands Brahma, Skol, Antarctica, Original, Bohemia and Caracu, and foreign brands Budweiser, Stella Artois, Corona, Modelo, Quilmes and Beck’s.
The concern to guarantee space in selected sales locations became even greater in 2022, with the World Cup that started this Sunday (20). The game season should contribute to raising the bar’s revenue by around 30%, according to Abrasel’s expectation – taking into account the end of the restrictions imposed by Covid-19, the heat and the first installment of the 13th salary.
Owner of almost two thirds (60%) of the volume of beer sold in Brazil, Ambev rushed to close in recent years exclusive contracts with bars “opinion makers”, in order to limit the entry of the Dutch rival in the segment of bars – channel that accounts for 56% of beer sales in the country and also offers the highest profit margin.
Through these contracts, trendy bars could sell only Ambev brands; in exchange, they received benefits ranging from training waiters, merchandising material (cups, coasters, napkins, posters, refrigerator wraps) to money to help renovate the establishment or open new points.
“But it turns out it got out of hand,” he told Sheet Mauricio Giamellaro, president of Heineken in Brazil. It became difficult to enter this segment, for every 10 bars we visited, 6 had an exclusive contract with the market leader”, says the executive, who decided, at the beginning of this year, to call Cade (Administrative Council for Economic Defense ) against exclusivity contracts.
At the end of October, Cade understood that Ambev was abusing its dominant position and prohibited the brewery from signing new exclusivity contracts and renewing existing contracts in regions of São Paulo (SP), Rio de Janeiro (RJ) and Brasília (DF) until the end of the investigation, which does not have a defined date.
Cade’s restrictions for exclusivity contracts, however, apply to all breweries, including Heineken. “We are happy with Cade’s decision”, says Giamellaro. “We only closed exclusivity contracts because it was the rule imposed by the market leader”, he says.
According to the President of Heineken, a research institute hired by the brewery pointed out that, among the establishments “opinion makers”, 40% in Rio and 30% in São Paulo had exclusive contracts with Ambev. With Heineken, this percentage was 1%.
“Considering the bar industry as a whole, our share is 10% – but our brand accounts for 30% of sales in supermarkets and 45% of sales on digital channels”, says the executive.
According to data from consultancy Nielsen, Heineken and its other brands (Eisenbah, Amstel, Devassa, Sol, Schin, among others) have about 22% of the beer market in Brazil, in volume, while Petrópolis (owner of brands such as Itaipava, Petra and Crystal) occupies the third place, with 13%.
In some bars, up to 50% of revenue depends on the bar’s partnership with the market leader, says Giamellaro. “Only it had this economic power to block the entry of new competitors. And if it is difficult for us, imagine for a craft brewery”, says the Executive.
“But the truth is that the bar market does not need a doorman, it has to develop, open itself to competition. All markets with a doorman develop more slowly and the consumer does not have access to innovation.”
Abrasel does not see so much dependence on bars around exclusivity contracts. “In general, the contracts are for five years, and in the first year the bar does not pay for the drink, which is only charged from the second year”, says Paulo Solmucci Jr., president of the association.
According to him, the organization was satisfied with Cade’s decision. “There was no damage to the sector. It is a determination that limits Ambev’s advance in the short term, and favors Heineken to a certain extent”, says Solmucci. “Our expectation is that other breweries can advance in supporting the bars.”
According to the President of Abrasel, only 2% of Ambev’s sales volume is related to exclusivity contracts. “It’s very little, they are contracts that are worth the visibility of the brand in renowned houses.”
questioned by Sheet regarding the impact of Cade’s decision, Ambev responded, in a note, that it will continue to follow the measures and guidelines adopted by the autarchy. “We are committed to maintaining a fair competitive environment, respecting competition legislation”, she informed.
Also contacted, Petrópolis declined to comment.
Exclusivity even involves hiring a jazz band
In São Paulo, Ambev’s exclusivity contracts involve large chains such as Cia Tradicional do Comércio – owner of Pirajá, Original, Bráz and Lanchonete da Cidade – and Fábrica de Bares, which has Bar Brahma, Blue Note, Alligator, Orpheus, Riviera and Bar Leo. wanted by Sheetnone of the networks wanted to give an interview.
The Kia Ora, located in Vila Olímpia, south of São Paulo, has an exclusive visibility contract with Heineken, which should last until 2024. team uniform. But, under the agreement, the Kia Ora can sell other brands, such as the handcrafted Wallaby and the Irish Guinness.
“Our bar has already been harassed for years by Ambev, but it is a company that totally shields the bar’s operation, it does not give you room to negotiate other brands”, says Ranieri. “The profile of my public identifies more with the Heineken brand, with whom we also had greater freedom of negotiation.”
Heineken’s agreement with Kia Ora involves an “exclusive” delivery, within the pre-scheduled time with the bar (in general, bars enter within the truck’s route) and the hiring of a jazz band, which plays on Tuesdays .
“I see no problem in opening the portfolio to other brands”, says Ranieri. “What convinces a customer to opt for the bar is the atmosphere, the service, the good service. If it has the brand he’s looking for, even better.”
According to research commissioned by Heineken in the capitals São Paulo, Rio, Brasília and Belo Horizonte, more than 60% of bar consumers do not like to go to the point of sale and not find their favorite brand.
Engineer Manoel Messias Gonçalves do Nascimento, 58, already knows where to find his favorite beers in São Paulo, where he lives. “But when I travel to other states, and I go to a bar where I’ve never been before, it’s unpleasant to find these types of restrictions, places that only sell a certain brand of beer”, he says. “This exclusivity shouldn’t exist.”
Drinking at the bar is always more expensive than at home. But, in the last 12 months until October, the beer for consumption away from home accumulated inflation of 6.63%, according to the IPCA (National Index of Prices to the Extended Consumer). The price of beer consumed at home increased by 9.97%, slightly above the IPCA in general terms (6.47%).
Among the 16 capitals and metropolitan regions surveyed by the IBGE (Brazilian Institute of Geography and Statistics), Porto Alegre was the capital in which beer for consumption away from home accumulated the highest inflation in 12 months: 16.20%.
As already pointed out by Sheetthe beer industry has practiced a lower adjustment with bars than with supermarkets, since establishments for immediate consumption offer a greater profit margin to breweries.
Brazil is the third largest consumer of beer in the world, after China and the United States.
“Supermarkets have gained a relevant space in beer sales since the pandemic”, says Rodrigo de Mattos, senior analyst at Euromonitor consultancy. “Although bars continue to lead sales as a channel, supermarkets tend to maintain their relevance, since they are the consumer’s main alternative to deal with inflation”, he says.
For 2023, according to Mattos, the inflationary pressure on the product may come from packaging. “There is a lack of glass on the market, a material that needs medium-term investment to grow its production, while the can faces the high price of aluminum”, he says. “Still, the forecast is for greater stability in the price of beverages.”