Posts

Jean Jereissati — Foto: Carol Carquejeiro/Valor
Jean Jereissati — Foto: Carol Carquejeiro/Valor

Ambev, the owner of beer brands Brahma, Skol and Antarctica, is presenting a “new chapter” of its history to investors this Tuesday. “To say we are a beverage company no longer represents us entirely,” CEO Jean Jereissati told Valor. The group wants to be, more and more, a platform, which goes beyond selling beer or soft drinks and includes food and even services, such as credit and renewable power generation.

Ambev has been successful until now with a model of strong expansion, search for efficiencies and inorganic growth. “The company conquered the world,” the executive said. “But when we turned 20 [in 2019], we rethought what the next 20 years would look like, and it became clear that what brought us here was not what would take us there.”

The company now wants to make alliances, like the ones it already has with BRF, M. Dias Branco or Pernod Ricard to sell its customers salami, cookies and vodka.

The Covid-19 pandemic in 2020 has somewhat opened the “technology window” for the company to put into practice what it began discussing as recently as late 2015 and early 2016. “The world went to online retail, it is digital now, and we were prepared when the pandemic came.”

If before only 15% of around 1 million customers were digital, today 80% are. “[The digital channel] was an option before. Now it is our core business. That’s where everything happens.”

Increased digitalization has had a major impact on the operation, speeding up the business. A bar, for example, can place orders through the Bees platform. This has given Ambev’s salesperson more time. Before the pandemic, a salesperson had only seven minutes to talk to a customer – there are 5,000 salespeople for a portfolio of one million customers. With Bees, a bar or restaurant ends up being in contact with the company for 37 minutes.

Digitalization also increased the umbrella of activities and the productivity of the salespeople, now called representatives by the company. The same 5,000 workers that served 750,000 customers in 2019 now deal with 1 million and will serve 1.2 million soon, the executive said.

To do so, a workforce of another 5,000 people has been assembled, with programmers and developers working on improving the several technologies used by Ambev and to creating new products and services. One priority is to improve logistics. The company started using small warehouses as distribution centers and motorcycles to speed up deliveries.

“Our acquisitions now should be more about improving our capabilities, in technology and logistics, and making alliances,” Mr. Jereissati said. The company plans, for example, to develop or buy a company that has created software for managing orders.

In the last three years, the company’s investments, including innovation, totaled R$17.5 billion, or R$7.77 billion last year alone.

In the last two years, the company has launched and managed to consolidate digital services such as the end consumer sales app Zé Delivery and Bees, for sales to bars and restaurants.

The platform Mr. Jereissati puts at the center of his strategy includes offering credit to customers. From the beginning of the pandemic until the end of 2021, the mass of credit offered to small retailers has doubled and is expected to double again this year. Sanitary restrictions, which required the closing of bars and restaurants for months on end, caused a crisis in this segment. For this reason, Mr. Jereissati said, “we were very flexible and rolled over the payments.” Fintech company Bees Bank, formerly called Donus, has 250,000 digital accounts.

This new operating model helped Ambev to sell 180 million hectoliters in 2021, a record level. Net revenue grew 24.8%, to R$72.85 billion. According to him, the year was less about big industry growth and more about market grabbing. “We were very countercyclical in the pandemic.”

Competition became fiercer. Heineken complained to antitrust regulator CADE this year against Ambev’s exclusivity contracts with bars. Mr. Jereissati showed itself to be calm. “It represents very little of our sales.” According to sources heard by Valor, exclusivity contracts account for about 2% of Ambev’s revenue.

Source: Valor International

https://valorinternational.globo.com

Ambev vai aumentar preço da cerveja em outubro

After leaving his job at the stock exchange, Alexander Creuz, 46, from São Paulo, met again ABEV3 — or rather, Ambev — in the countryside of the state of Santa Catarina, now as a supplier of hops for the production of the Brazilian company’s beers.

Leaving decades in the financial market and life in the largest metropolis in Latin America to study agribusiness and become a rural producer was not an easy decision, but Mr. Creuz says he only regrets not having done it sooner. And the accounts show that the choice was positive.

The production of hops has a significant cost to implement, but net profit projections varies between R$70,000 and R$ 80,000 per hectare, according to him. If all goes as planned, with the first full crop being harvested this year, the return on investment should come within 40 months.

The fact that the required area is small was decisive for the option for hops — Mr. Creuz’s property, located in Lages (Santa Catarina state), has 12 hectares. “To have this profitability with soy, for example, I would need much more area,” he explains. Research indicates that the profit with soy is around R$2,000 to R$3,000 per hectare.

Hop is a plant of the species Humulus lupulus, of the family Cannabaceae. It is native to Europe, western Asia and North America. Being a vine, it usually reaches between 4.6 and 6.1 meters in height.

In beer brewing, during the cooking process with malt, water and yeast, the plant releases bitter-tasting resins, giving the beverage its characteristic flavor. Hops are also a natural preservative. In the past, it was added to beer kegs after fermentation to keep the beverage fresh while it was being transported.

Today, practically all the hops used by the country’s breweries are imported. Last year, the industry spent $82 million on the purchase of 4,721 tonnes of hops from other countries, according to data from the Secretariat of Foreign Trade (Secex).

According to a survey by the Brazilian Association of Hop Producers (Aprolúpulo) released last year, the cultivated area in the country is just over 40 hectares, and production is around 24 tonnes.

The largest brewery in Latin America, Ambev wants to encourage an increase in hops cultivation in Brazil. Mr. Creuz says the help is more than welcome. “It’s one thing for me, an individual, to knock on the headquarters of Epagri [Santa Catarina’s technical assistance agency] and ask for technical aid. Another thing is Ambev”, jokes Mr. Creuz, a former president of Aprolupulo.

Mr. Creuz is part of Ambev’s Fazenda Santa Catarina project, which began in 2020 and, since then, has carried out management and varieties tests that increase productivity and guarantee income. In the second half of last year, Ambev started producing and donating seedlings to producers.

“We hope to foster these local economies, in addition to producing better quality beer by having fresher hops,” says Laura Aguiar, Ambev´s head of Knowledge and Brewing Culture. According to her, the project’s first significant crop is expected to be harvested this year, but there are no volume estimates.

The company is also recruiting help to boost cultivation. At the end of January, it announced a partnership with Silver Hops, an agtech created within Fazenda Pratinha, in the region of Ribeirão Preto (state of São Paulo), with focus on technologies for hops.

“Our role will be to complement the work that is already being done with family farming through the perspective of research and innovation”, says Silver Hops’ head José Braghetto Neto.

Source: Valor International

https://valorinternational.globo.com