After the rebound in beer consumption after the pandemic, the market is starting to cool down this year. In 2022, 4.5% more bottles were sold than in 2021 according to a report by Claves, Competitive Information. Industry sources say that this year sales are down sharply. “Ours is a very broad category, if the pocket suffers, the category suffers”, they underline.
The beer market in Argentina is dominated by two large companies, Quilmes, which operates brands such as Stella Artois and Andes, and CCU, with Heineken and Amstel, among others.
Today in Argentina the consumption of beer is 45 liters per year per person, below the South American average, which is 60 litres. Artisans represent only 2.5% of the market.
Juan Pablo Barrale, Head of Corporate Affairs and Sustainability of CCU, specifies that “the sales volumes of the beer market are at levels lower than those of the previous year. Despite this, we continue to diversify our proposal, with the launch of new varieties and brands, such as the case of Heineken 0.0 (without alcohol), Bieckert BAPA and Urbana, Grolsch IPA, Salta Cautiva Negra, to get closer to the different tastes and preferences of consumers ”.
Despite the drop in consumption, Barrale underlines it “There is a growing trend where consumers are opting for more sophisticated productsmarking the growth of the premium and entry premium segment, which already represents over 20% of the volume of consumption”.
New projects
The decline in sales is more marked in craft beers. Yet there are those who continue to bet on the sector. Bambú was launched this month, the merger of the Corrales Viejos and Fe breweries.
With an initial investment of US$50,000, The Bambú factory will be based in Lanús and expects revenue of $40 million by 2023. “Our goal is to be one of the top 10 craft beer brands on the market,” says Damián Martínez, Bambú’s administrative and commercial manager.
“If wages go down, consumption goes down. Consumption has dropped sharply this year, close to 30%. We have been brewing beer for seven years, as PMI we are always used to overcoming these problems, appealing to creativity, to diversification,” says Martínez.
This was underlined by Juan Cavallo, managing director of Bierhaus “beer consumption decreased by 25% in the first quarter. We haven’t fallen that much due to very strong commercial work to try and support us. The activity is very minor: instead of consuming three pints, people consume one and stay four hours.”
In addition to the decline in consumption, the sector is facing import difficulties. According to data from the Chamber of Craft Brewers of Argentina, for 40% of producers there is a shortage of hops on the market. A similar percentage means that there are also shortages of malt and glass bottles.
Quilmes was faced with an import substitution plan that has one of its strengths in the expansion of the hop plantation area in the Río Negro. 70% of the hops needed for beer production are imported and Quilmes’ goal is to triple the cultivated area to be self-sufficient.
“Last year we exported $421 million, mainly barley and malt. This allows us to have a positive trade balance. We import some cans, can lids, capital parts for the factory and hops for international brands. We are somewhat behind on imports but have not gone to the extreme of having plant shutdowns“, they said from Quilmes.
CCU has invested to expand production and logistics capacity, “with a medium and long-term perspective, to strengthen the local production of national and international beers”, underlines Barrale.
Faced with the difficulties in importing “we try to achieve predictable management and with time, given the current circumstances. We haven’t had a productive impact so far,” he says.
Artisans also suffer from difficulties in importing factors of production. “There is a shortage, especially of hops. To solve it, we have partnered with three or four breweries and let’s make a joint purchase“Says Martinez.
“Most of the inputs we use are domestic, but these prices are also in dollars. And what can be imported is cheaper and more expensive. So, in addition to the drop in consumption, for us the margin is drastically reduced“Says Horse.
AQ
Source: Clarin
