November 25, 2012 2:13 pm

AmBev to launch bars across Brazil

AmBev, the Latin American arm of Anheuser-Busch InBev, the world’s biggest brewer by sales, is considering a rollout of branded bars across Brazil as it seeks to ramp up sales of its Brahma, Skol and other beers.

The move – via a quasi franchise arrangement, whereby a third party will own and run the bars while AmBev provides marketing, training and basic furnishings – illustrates the efforts being made by manufacturers of branded goods to sell their products to Brazil’s burgeoning middle classes.

Brazil ranks as one of the world’s top three consumer markets in a range of goods, from pet food to skin care, and sales of these products are forecast to continue growing as millions more Brazilians move into the middle classes. Reaching them, however, can be tricky, with shops thin on the ground in more remote parts of the country, prompting heavy reliance on direct sales.

That is not an option for makers of alcoholic drinks, however, who are instead pursing other methods. AmBev began piloting its Nosso Bar or “our bar” in the city of São Paulo last year and if successful will roll them out nationwide, said Nelson Jamel, chief financial officer, in an interview with the Financial Times.

He said the scheme began after the brewer noticed that bars springing up in the more remote areas closed soon afterwards amid a flurry of complaints. Drinkers grumbled that the bars were dirty, had ineffective coolers resulting in warm beer – and even that the TV screens were switched to channels showing the “wrong” soccer teams.

Entrepreneurs wanting to run a Nosso Bar must have R$30,000-R$50,000 ($14,400-$24,000) to invest. AmBev will advise on locations, provide training and manuals.

“Page one [stipulates] that the bar has to have two rest rooms, male and female,” said Mr Jamel. Subsequent pages discuss what entertainment is to be offered, such as live music.

AmBev is not alone in using branded bars to reach more drinkers. Diageo, which in May announced it would pay $450m for Ypióca, a Brazilian maker of cachaça, the sugarcane-derived liquor, inherits a chain of more than branded 100 bars as part of the acquisition. Indeed, it even gains a team of painters whose job it is to transform bars into the cheerful yellow and red colours of Ypióca.

Usually the bars, clustered in Fortaleza in the north of Brazil, sell Ypióca alone, but some supplement the cachaça with beer and local whiskies.

Anheuser-Busch InBev has used the bar concept to sell drink elsewhere in the world too. The Belgian Beer Cafes, selling other Belgian beers alongside those, such as Stella Artois, that are brewed by ABI, have been around since 1998 and can now be found as far afield as Kiev, Sydney, Tokyo and Dubai.

Additional reporting by Samantha Pearson in São Paulo

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