13/5/2016 Euromonitor International - Analysis

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BetterForYouBeveragesinPeru
CategoryBriefing|07Apr2016

HEADLINES

Betterforyoubeveragesrecordsretailvaluegrowthof6%in2015toreachn/s451.5million

Increasedconsumerconcernabouthealthpositivelyimpactsthecategoryin2015withreducedsugar
RTDteaandreducedsugarnectars(2599%juice)themostdynamiccategories

BFYreducedsugarbeveragesaccountsfora96%shareofretailvaluesalesofbetterforyou
beveragesin2014

ReducedsugarRTDtearecordsthehighestvaluegrowthof20%in2015

CorpLindleyleadsbetterforyoubeverageswitha59%valuesharein2015

BetterforyoubeveragesisexpectedtorecordavalueCAGRof4%atconstant2015pricesoverthe
forecastperiod

TRENDS

Betterforyoubeveragesrecordedvaluegrowthof6%in2015drivenbythetrendtowardshealthy
livinginthecountry.BFYreducedsugarbeveragesaccountedfora96%valueshareofthecategoryin
2015.Innovationinthecategoryremainedslowduetoitssmallsize.BFYbeveragesrepresentedonly
5%ofthetotalretailvaluesalesofthesoftdrinksmarketin2015

ReducedsugarRTDtearecordedthehighestvaluegrowthof20%in2015.RTDteaisoneofthe
fastestgrowthcategoriesinthecountry,astheregularvarietyofthebeverageisperceivedashealthier
thancarbonatesandartificialjuiceandthereducedsugarversionoftheproductisenjoyinggreat
successamongconsumers.

TheuseofsteviainPeruisverylowandevenifitsuseasasweetenerisgrowinginsome
households,industrialuseofsteviaislimitedinsoftdrinkswithitbeingpresentonlyinsomenatural
juices.

Thegovernmenthasaclearstrategyonweightmanagement,withhealthierlifestylesandgoodeating
habitspromotedbytheMinistryofHealthandlocalmunicipalitiesinordertotrytostopthegrowthinthe
obesityrate,whichincreasedconsiderablyinthelastdecadeto2015.In2013thegovernment
approvedhealthlegislationwhichforbidssalesofjunkfoodinschoolsinordertoprotectchildrenand
encouragethemtochoosefromhealthychoiceswhensnacking.

Carbonatesingeneralfaceddecliningsales,althoughtheperformanceofreducedsugarcarbonates
didnotregistersignificantlybettervolumegrowthin2015of2%,oneoftheweakerperformancesinthe
category.Thisphenomenonreflectstheconcernofconsumersfortheirhealthandthechoicesthey
makewhenselectingabeverage,switchingconsumptionofcarbonatestowardsreducedsugarRTD
teaandreducedsugarnectars(2599%juice).

Thegovernment,especiallythroughtheMinistryofHealth,promotesahealthylifestyleandadoption
ofgoodeatinghabitsaspartofitscampaignagainstobesity.Tocomplementtheeducationonthe
intakeofhealthyfood,theMinistryofHealthlauncheditsActivatecampaignin2015withtheaim
promotingphysicalactivityamongchildrenandadultsinordertoreversethehighratesofobesityinthe
country.

COMPETITIVELANDSCAPE

In2015CorpLindleycontinuedtoleadbetterforyoubeverages,accountingfora59%retailvalue
share.ThecompanyownsIncaKolaLightandCocaColaZero,themostpopularreducedsugar
carbonatesinthecountry.ThecompanyisaggressiveinitsmarketingcampaignsandwithIncaKolain
particularittakesadvantageofitsPeruvianpositioning.

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In2015companyrankingremainedstable,howeveritisimportanttohighlightthatAjeperachieveda
onepercentagepointincreaseinitsretailvalueshare,mainlyduetotheaffordablepricesofits
productsatatimewhenthePeruvianeconomywasexperiencingaslightdecelerationprocess,leading
consumerstochooseslightlylessexpensiveoptions.

Noimportantnewproductlauncheswereobservedinthecategoryin2015.

Betterforyoubeveragesarenotperceivedaspremiumproducts,moreasextensionsoflinesand
thereforeconsumersexpecttopaysimilarpricesforthem.Launchesofhealthieroptionsarewell
receivedbyconsumersandtheyappreciatetheeffortofthecompany,althoughconsiderablyhigher
pricesarenotexpected.Consumersaremorelikelypaymoreforfunctionalproductsthanjustreduced
sugarversions.

Localandinternationalcompaniescompetetoincreasetheirshare,withdomesticcompaniessuchas
CorpLindleyandAjeperleadingbetterforyoubeverageswithacombined69%retailvaluesharein
2015,whiletheremainingsalesaresharedbylocalandinternationalcompanies.Domesticplayers
havetheadvantageofreducedcostsastheycanbettermanagetheirexpenses.Also,thedeep
knowledgeofthemarketbylocalcompaniespositionsthemclosertotheconsumerandmorewillingto
innovateusingPeruvianingredientssuchasfruit,Andeangrainsandothertypesofproducts.

PROSPECTS

BetterforyoubeveragesisexpectedtorecordavalueCAGRof4%atconstant2015pricesoverthe
forecastperiod.Thetrendtowardshealthylivingispredictedtobecomestronger,duetotheconcerns
ofPeruviansfortheiroverallhealth.

Thecategoryisanticipatedtorecordhigherconstantvalueandvolumegrowthovertheforecast
periodthantheequivalentsofthereviewperiodduetothehealthtrend,towhichcompaniesare
respondingwithlaunchesofreducedsugarversionsoftheirproducts.

Steviaisanaturalsweetenerwhichhashadsignificantcoverageinthemediaforitshealthier
attributesandhouseholdshavebeguntousesteviaonaregularbasisasareplacementforsugar.
However,ontheindustrialside,fewbeveragessweetenedwithsteviahadbeenlaunchedbytheendof
thereviewperiod,althoughmorebeveragesusingnaturalsweetenersareexpectedtoappearoverthe
forecastperiod.

Theexpectedvaluegrowthofthecategoryatconstant2015pricesovertheforecastperiodis
considerablyhigherthantheequivalentofthereviewperiodasmorecompaniesbegintolaunch
healthierversionsoftheirproductsinordertokeepupwithconsumerdemandforlowcalorie,reduced
sugarornocaffeinebeverages.

Theleadingcompaniesinthecategory,CorpLindleyandAjeper,areexpectedtoofferreducedsugar
alternativesoftheirregularproductsandmaylaunchnewproductdevelopmentsduringtheforecast
period.Companieswithlowervaluesharescouldalsopromotereducedsugaroptionsoftheirproducts
orlaunchnewonesovertheforecastperiod,asthetrendtowardshealthylivingcontinues.

CATEGORYDATA

Table1SalesofBFYBeveragesbyCategory:Value20102015
PENmillion 2010 2011 2012 2013 2014 2015
BFYReducedCaffeineBeverages 13.9 14.6 15.3 15.5 16.5 17.8
BFYReducedCaffeineHotDrinks 13.9 14.6 15.3 15.5 16.5 17.8
BFYReducedCaffeineSoftDrinks
BFYReducedFatBeverages
ReducedFatOtherHotDrinks
BFYReducedSugarBeverages 333.6 357.8 373.8 389.1 408.3 433.7
BFYReducedSugarHotDrinks
BFYReducedSugarSoftDrinks 333.6 357.8 373.8 389.1 408.3 433.7
BetterForYouBeverages 347.5 372.4 389.1 404.6 424.8 451.5
Source:EuromonitorInternationalfromofficialstatistics,tradeassociations,tradepress,companyresearch,storechecks,tradeinterviews,tradesources

Table2SalesofBFYBeveragesbyCategory:%ValueGrowth20102015
%currentvaluegrowth 2014/15 201015CAGR 2010/15Total
BFYReducedCaffeineBeverages 8.0 5.1 28.3

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BFYReducedCaffeineHotDrinks 8.0 5.1 28.3
BFYReducedCaffeineSoftDrinks
BFYReducedFatBeverages
ReducedFatOtherHotDrinks
BFYReducedSugarBeverages 6.2 5.4 30.0
BFYReducedSugarHotDrinks
BFYReducedSugarSoftDrinks 6.2 5.4 30.0
BetterForYouBeverages 6.3 5.4 29.9
Source:EuromonitorInternationalfromofficialstatistics,tradeassociations,tradepress,companyresearch,storechecks,tradeinterviews,tradesources

Table3NBOCompanySharesofBFYBeverages:%Value20112015
%retailvaluersp 2011 2012 2013 2014 2015
CorpLindleySA 66.4 61.8 60.9 60.1 59.3
AjeperSA 5.8 7.2 8.3 9.1 10.1
CiaCerveceraAmbevPerSAC 7.7 7.4 7.1 7.1 6.9
KraftFoodsPerSA 4.1 4.0 3.9 3.8 3.7
NestlPerSA 1.9 1.9 2.1 2.1 2.2
CocaColaCo,The 1.4
GloriaSA,Grupo 0.9 0.9 0.8 0.8 0.8
AltomayoPerSAC 0.7 0.7 0.7 0.7 0.7
LaiveSA 0.1 0.1 0.1 0.1 0.1
UnindeCervecerasPeruanasBackus&JohnstonSAA 1.6 1.5 1.5 1.5
CorpJosRLindleySA
Others 10.9 14.4 14.6 14.7 14.9
Total 100.0 100.0 100.0 100.0 100.0
Source:EuromonitorInternationalfromofficialstatistics,tradeassociations,tradepress,companyresearch,storechecks,tradeinterviews,tradesources

Table4LBNBrandSharesofBFYBeverages:%Value20122015
%retailvaluersp Company(NBO) 2012 2013 2014 2015
IncaKolaLight(CocaColaCo, CorpLindleySA 48.0 47.8 47.2 46.5
The)
CocaColaZero(CocaColaCo, CorpLindleySA 13.8 13.1 13.0 12.7
The)
FreeTeaLight(AjeGroup) AjeperSA 7.2 8.3 9.1 10.1
PepsiLight(PepsiCoInc) CiaCerveceraAmbevPerSAC 7.1 6.8 6.7 6.6
Clight(MondelezInternational KraftFoodsPerSA 4.0 3.9 3.8 3.7
Inc)
NescafDescafeinado(Nestl NestlPerSA 1.9 2.1 2.1 2.2
SA)
GuaranBackusLight CocaColaCo,The 1.4
MonacoDescafeinado GloriaSA,Grupo 0.9 0.8 0.8 0.8
AltomayoDescafeinado AltomayoPerSAC 0.7 0.7 0.7 0.7
(CorporacinPERHUSA)
TripleDiet(PepsiCoInc) CiaCerveceraAmbevPerSAC 0.3 0.3 0.3 0.3
SbeltLaiveLight LaiveSA 0.1 0.1 0.1 0.1
GuaranBackusLight UnindeCervecerasPeruanas 1.5 1.5 1.5
(SABMillerPlc) Backus&JohnstonSAA
CocaColaLight(CocaColaCo, CorpJosRLindleySA
The)
CocaColaZero(CocaColaCo, CorpJosRLindleySA
The)
IncaKolaLight(CocaColaCo, CorpJosRLindleySA
The)
Clight(KraftFoodsInc) KraftFoodsPerSA

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13/5/2016 Euromonitor International - Analysis
Others Others 14.4 14.6 14.7 14.9
Total Total 100.0 100.0 100.0 100.0
Source:EuromonitorInternationalfromofficialstatistics,tradeassociations,tradepress,companyresearch,storechecks,tradeinterviews,tradesources

Table5DistributionofBFYBeveragesbyFormat:%Value20102015
%retailvaluersp 2010 2011 2012 2013 2014 2015
StoreBasedRetailing 90.7 90.7 90.8 90.8 90.8 90.8
GroceryRetailers 90.7 90.7 90.8 90.8 90.8 90.8
ModernGroceryRetailers 60.9 63.5 66.0 68.9 71.7 74.7
ConvenienceStores
Discounters
ForecourtRetailers 0.1 0.1 0.1 0.2 0.2 0.2
Hypermarkets 24.0 24.8 25.6 26.6 27.6 28.6
Supermarkets 36.8 38.6 40.2 42.2 43.9 45.9
TraditionalGroceryRetailers 26.2 23.5 20.9 17.9 15.0 11.9
Food/drink/tobaccospecialists
IndependentSmallGrocers 26.2 23.5 20.9 17.9 15.0 11.9
OtherGroceryRetailers 3.6 3.7 3.9 4.0 4.1 4.3
NonGrocerySpecialists
NonStoreRetailing 9.3 9.3 9.2 9.2 9.2 9.2
Vending
Homeshopping
InternetRetailing
DirectSelling 9.3 9.3 9.2 9.2 9.2 9.2
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source:EuromonitorInternationalfromofficialstatistics,tradeassociations,tradepress,companyresearch,storechecks,tradeinterviews,tradesources

Table6ForecastSalesofBFYBeveragesbyCategory:Value20152020
PENmillion 2015 2016 2017 2018 2019 2020
BFYReducedCaffeineBeverages 17.8 18.5 18.9 19.5 20.0 20.7
BFYReducedCaffeineHotDrinks 17.8 18.5 18.9 19.5 20.0 20.7
BFYReducedCaffeineSoftDrinks
BFYReducedFatBeverages
ReducedFatOtherHotDrinks
BFYReducedSugarBeverages 433.7 449.2 467.8 488.7 512.3 538.4
BFYReducedSugarHotDrinks
BFYReducedSugarSoftDrinks 433.7 449.2 467.8 488.7 512.3 538.4
BetterForYouBeverages 451.5 467.7 486.7 508.2 532.3 559.1
Source:EuromonitorInternationalfromtradeassociations,tradepress,companyresearch,tradeinterviews,tradesources

Table7ForecastSalesofBFYBeveragesbyCategory:%ValueGrowth20152020
%constantvaluegrowth 2015/2016 201520CAGR 2015/20TOTAL
BFYReducedCaffeineBeverages 4.1 3.0 16.1
BFYReducedCaffeineHotDrinks 4.1 3.0 16.1
BFYReducedCaffeineSoftDrinks
BFYReducedFatBeverages
ReducedFatOtherHotDrinks
BFYReducedSugarBeverages 3.6 4.4 24.2
BFYReducedSugarHotDrinks
BFYReducedSugarSoftDrinks 3.6 4.4 24.2
BetterForYouBeverages 3.6 4.4 23.8
Source:EuromonitorInternationalfromtradeassociations,tradepress,companyresearch,tradeinterviews,tradesources

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EuromonitorInternational2016

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