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Among the Competition, Customers Win!

By Anonymous
By: Gustavo Kramer
First-Year Brewmaster Student

 In Brazil, behavior towards beer consumption has been changing. Prior to the 2000s, there were almost no options for people to consume different types of beer as the market was dominated by big corporations producing American Lager’s brewed with adjuncts. Those who wanted to drink something different had to seek out the very few establishments selling expensive imported beers. However, the new millennium saw a boom in craft brewery options meaning customers are now able to discover a multitude of styles, including the formerly unknown 100% malt-based beer.

As customers started to seek out this particular beer style, the biggest corporation in the world AmBev, subsidiary of Anheuser-Bush InBev in Brazil, saw an opportunity involving malt-based beers and the potential for a niche market. AmBev invested years of research in developing a 100% malt-based recipe and in 2018 they launched two new brands in Brazil made with 100% malt: Skol and Brahma, both of which are responsible for 67% of total beer sales in Brazil (Flanders, 2015). Besides the traditional Brahma Pilsen, made with adjuncts, they launched three beers using 100% malt: Brahma Extra Lager, Brahma Extra Red Lager, and Brahma Extra Weiss. Skol also launched two 100% malt-based beers: Skol Hops and Skol Puro Malte (Skol Pure Malt). Moreover, the AmBev’s brand Serramalte, a Premium American Lager, traditionally brewed with adjuncts, migrated to the 100% malt-based recipe.

The production of 100% malt-based beer by AmBev was a reaction against Heineken gaining ground in Brazil, as well as other smaller brands such as Eisenbahn, and craft beers. Who is the winner in this war to gain market dominance? The customers! As automakers spend billions of dollars every single year, developing better cars and trying to overcome competitors, it is not so different in the brewing industry. It is an excellent lesson for craft breweries: either please the customers and develop better products, or the brewery shuts down. If a craft brewery wants to thrive, being complacent is never allowed. As the market is very dynamic, competitors will be so. Craft breweries need to take research, development, improvements, optimization, and quality seriously. It means hard work outside of their comfort zone. But moreover, the customers win.


Gustavo Kramer is a first-year brewmaster student in the 6th cohort, and was born in Porto Alegro, Brazil. He worked in a brewery for one year during his academic pursuit as a food engineer and is now looking to continue his brewery experience here in Canada. 





Reference:
Flanders Investment & Trade Market Survey. (2015). The Beer Sector in Brazil. Sao Paulo: Flanders Investment & Trade.




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