Soft Drinks Market in

Brazil

1
Who we are?

2
Summary

WHO WE ARE? 2

SUMMARY 3

MARKET & TRENDS 4

PRESENTATION 4
MARKET 5
CONSUMER LIFESTYLE 7
TRENDS 9
REGULATION AND TAXATION 12
SWOT 13

PRIX ET PRODUIT 15
PRICE 15
PRODUCTS 16

PRODUCTION - DISTRIBUTION 22

PRODUCTION – DISTRIBUTION 22
PRODUCTION 22
DISTRIBUTION 24
SEGMENTATION 27
UNDERSTANDING THE MARKET CONCENTRATION 28

3
Market & Trends

Presentation

Soft Drinks is a segment of the Non-Alcoholic Drinks market that

comprises all types of drinks based on water and containing additives
like sugar or sugar substitutes, minerals, aromas and so on. Therefore,
the segment includes Carbonated Soft Drinks (Cola, Lemonade, Energy
Drinks, etc.), Non-Fizzy Soft Drinks (Flavored Mineral Water, Iced tea,
Nectars and soft drinks with some fruit juice content), as well as
“Ready to Drink” coffee-based drinks. Milk mix drinks, juices (fruit,
vegetable and smoothies) and bottled water are excluded and
represent different segments within the Non-Alcoholic Drinks market.

Present in everyday life, the Soft Drinks segment alone accounts for
62% of the Non-Alcoholic Drinks market revenue globally, with a
volume of sales of 245bnL in 2016 (equivalent to 42%).

Source: Statista

4
Market

The Soft Drinks market is led by the United States (USA) – not by
accident the country of origin of the two largest market players, the
Coca-Cola Corporation and PepsiCo. The most important producers in
this segment worldwide are Coca-Cola Corporation, PepsiCo and Red
Bull. The market for non-alcoholic drinks is structured into off-trade
sales (in stores) and on-trade sales (in bars, restaurants etc.).

Source: Statista

Regarding per capita consumption, the United States leads it with

191.32L in 2017, followed by Japan with 164.51L. In terms of
consumption, the most consuming countries are in its majority
mature markets. Exceptions are China, India and Indonesia in Asia,
Nigeria in Africa (ETENE, 2018).

5
The Brazilian Soft Drink market is the fourth largest market in the
world. It is ahead of Mexico and only falls behind the USA, China and
Japan. Its expected total revenue for 2018 is of US$18,853M which is
very close to the US$19,669M and US$22,409M expected for the third
and second biggest markets respectively.

Source: Statista

When considered the per capita consumption, the Brazilian market

falls to the 15th position in a worldwide comparison. As a developing
country with a population of over 208M people, its market has still a
lot of unexplored potential. Therefore, also Brazil represents a market
with potential to grow.

The Brazilian Soft Drinks market combines the offers of the large
corporations, with Coca-Cola Company, AmBev and Heineken
(previously Brasil Kirin) leading the market with over 80% of market
share, and smaller producers with significant representation at
regional level and competitive prices that reach the lower classes.

6
These producers are called Tubaínas, as it will be explained in the
market segmentation section.

Consumer Lifestyle

As for the consumer lifestyle, Brazilian Health Ministry data shows

that on average, 16.5% of respondents regularly consumed soft drinks
in 2016. The largest consumers seem to be aged 18 to 24, as 24.2% of
the respondents in this age group claimed to consume soft drinks five
or more days per week.

Source: Statista

Regarding the educational level of the adult consumers, no strict

correlation can be inferred. In 2016, nearly 19% of respondents with 9
to 11 years of formal education claimed to consume soft drinks five or
more days per week, while for those with more than 12 years of
education the percentage falls to 14.6%. The 9 to 11 years of formal
education group comprises people who finished high-school.

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 Source: Statista

In a gender perspective, men tend to consume more Soft Drinks in a

regular scale than women according to data from the Brazilian Health
Ministry. However, even this group seems to be reducing its
consumption. In 2016, almost 20% of male respondents aged 18 and
older claimed to consume Soft Drinks five or more days per week,
almost half the figure when compared to the nearly 36% of the men
surveyed in 2007. On average, 16.5% of the respondents said they
regularly consumed Soft Drinks in 2016.

8
 Source: Statista

Trends

After an expansion in consumption during Brazil’s prosperous years,

the crisis that hit the country also impacted the Soft Drinks market.
The increase in the income of the lower classes in the early 2000s had
changed people’s consumption profile, including Soft Drinks in more
consumer baskets.

However, as non-essential good, Soft Drinks saw a decrease in

consumption due to the crisis the country is facing. According to
ETENE, this fall in the volume of sales was offset by an increase in
revenues, which can be associated to the development and marketing
of the products in smaller sizes. These smaller presentations of the
products have a higher price per liter, compensating for the decrease
in volume of sales.

9
 Source: own elaboration based on Statista data

Another trend refers to the change in the consumers preferences.

Following a worldwide trend, it seems that the Brazilian consumer is
growing more aware of its health when it comes to the products he
buys. According to the Brazilian Association of Soda and Non-Alcoholic
Drinks Industry (ABIR), there has been a migration from sodas to other
kinds of Non-Alcoholic Drinks with a healthy appeal. So, drinks without
artificial sweeteners or with vegetal or natural ingredients in their
composition are becoming preferred items. In fact, WTO recently
recommended an increase in the taxation of Soft Drinks and sugared
beverages as a means to combat the growth in obesity.

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 Source: ABIR

Despite Brazil’s heterogeneity when it comes to the different regions

of the country, two other global trends of the Soft Drinks markets
tend to hit the Brazilian market in the following years. According to
ETENE, these are the acceleration in the demand for “super premium”
beverages in the juices, plant based waters (like coconut water), ready
to drink items and premium iced teas. Local ingredients like guarana,
coconut and açaí berry are usually successful in the Brazilian Soft
Drink market, as the Red Bull experience in the energy drinks segment
shows – the company is launching a new açaí and coconut flavor this
summer.

The second international trend that can be expected to affect the

Brazilian market is reduction in sales by impulse, as there seems to be
a gradual migration to on-line retail around the world. Nonetheless,
this seems to be a long-term trend, as the online sales in the Brazilian
market is derisory so far.

11
Regulation and Taxation

Taxation in the beverage industry has undergone transformations

over the last few years. Until 2008, the model applied was ad rem,
which is based on a fixed value on production. This model is especially
harmful to small producers. In January 2015, Law no. 13,097 was
sanctioned changing ad rem tax to ad valorem tax, a progressive
model that brings proportionality of taxation to the price practiced.
This kind of taxation applies to the final price regardless of the
quantity produced.

Brazil holds a complex tax system. As for the Soft Drinks, there are
four different taxes: IPI, ICMS, PIS and COFINS. The Imposto sobre
Produtos Industrializados (IPI) is a national tax and its rate for soft
drinks varies from 1.56% to 4%. The raw material of non-alcoholic
beverage products, e.g concentrate or syrup, has an aliquot of 20%.
The other three taxes are locally managed and thus their aliquots vary
according to the Brazilian State where production takes place or the
product is sold.

The beverage industry in Brazil is regulated mainly by the Ministério

da Agricultura, Pecuária e Abastecimento (MAPA) and the Ministério
da Saúde. Among the miscellaneous types of normative instructions (a
drawback of the Brazilian market) lies components requirement in the
production of flavored beverages. Each flavor requires a minimum
percentage of natural juice from the underlying fruit. For soft drinks
and fruit-based drinks the rules are the following:

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• Soft Drinks

• Fruit-based Drinks

SWOT

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 Forces Faiblesses
Force A Faiblesse A
Force B Faiblesse B
Force C Faiblesse C

Opportunités Menaces
Opportunité A Menace A
Opportunité B Menace B
Opportunité C Menace C

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Prix et produit

PRICE

The Soft Drinks’ prices vary according to the product sizing. According
to Statista data, although the volume per capita is expected to
decrease from 95.0L in 2018 to 89.3L in 2021, the average revenue
per capita should grow 2.3%, 2.6% and 2.8% by 2019, 2020 and 2021,
respectively. This means that the average price per unit in the
Brazilian Soft Drinks market that currently amounts to US$0.93 (in
2018) is expected to grow to US$1.07 in 2021.

Source: Statista

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The growth in revenue in spite of the decrease in the volume of sales
can be explained by the investment companies are making in smaller
packaging of their products as a response to the down-turn in sales
during the crisis.

PRODUCTS

There is a wide range of products in the Soft Drink market. According

to Gertner and Gertner (2005), for the Brazilian C and D classes (the
equivalent to the average middle class) the price of the product
affects 38% of the decision when it comes to food purchase. It seems
that there is a personal or cultural factor that plays a significant part in
this decision.

In 2016, Coca-Cola led the soft drinks retail and wholesale market in
Brazil in sales with a 36.9% share. It was followed by Guaraná
Antarctica, a traditional soda made with guarana berry, with a 7%
share.

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 Source: Statista

• Sodas:
Sodas are offered in all kinds of flavors, with a wide range of fruit
flavors available too – and exploring Brazil’s diversity with flavors like
guarana, passion fruit and other tropical tastes. The most consumed
flavors are cola, guarana and fruits (orange, lime, grape, etc.).

The drinks are sold in three kinds of packaging: PET bottles, cans and
glass bottles. PET bottles are the most diffused type of packaging and

17
there are available in different sizes. According to Statista, PET
responded to 83% of the distribution of carbonated beverages.

Source: Statista

The brands try to offer a wide range of sizing for all the different life
occasions – the Sunday family lunch and birthdays to single doses –
and budgets. The small size presentation is also a market strategy of
the companies to even out the reduction in the sales volume that
have taken place in the past years. Albeit the price per liter is higher,
the small doses are more affordable to fulfill consumer’s desires in the
short term – particularly important if considered that impulse
consumption is a really in the 99% offline sale.

As an example of the importance of different sizing offers, Coca-Cola

has more than 15 options of packaging and sizing available in the
Brazilian market: PET bottles in 3L, 2.5L, 2.25L, 2L, 1.75L, 1.5L, 1.25L,

18
1L, 750ml, 600ml and 400ml), glass bottles (1L, 290ml and 237ml) and
cans (350ml and 250ml). The reintroduction of the glass bottles in the
market was a strategy to compete with the Tubaínas and regain some
market share.

Source: Coca-Cola Brasil

• Energy Drinks:
According to a 2018 survey conducted by Clint, 15.43% of the
respondents affirmed to regularly consume energy drinks. On the one
hand, this might indicate that the market has the potential to grow.
On the other hand, previous data from 2014 to 2016 on per capita
consumption shows a decrease from 0.7L per person to 0.54L per

19
person. Regarding production, the volume produced has also
decreased in the 2014-2016 period.

Source: Statista

The Energy Drinks market is led by Red Bull with a 50% market share,
and followed by Coca-Cola’s Burn, Monster, TNT (owned by Cervejaria
Petrópolis) and AmBev’s Fusion. There are also smaller brands who
sell their products in PET bottles and tend to gain consumers in terms
of the price offered. As for packaging, energy drinks are usually sold in
cans and PET bottles.

Common innovations in this market segment relates to the flavors

offered. Red Bull has developed a series of flavored editions, its recent
one being açaí berry and coconut. Fusion has got a guarana flavor.

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• Isotonic Drinks:
Isotonic Drinks are also known as Sports Drinks. These drinks are
available in different fruit flavors, such as orange, tutti-frutti, citrus,
tangerine, grape, etc. In 2016, the production of isotonic drinks in
Brazil amounted to more than 98 million liters, representing a
decrease from nearly 104 million liters a year earlier. The main market
players for isotonic drinks are Coca-Cola, Global Bev, AmBev/PepsiCo
and Ultrapan.

Source: Statista

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Production – Distribution

PRODUCTION

As a whole, the beverage industry’s revenue in Brazil was equivalent

to 1.9% of the GDP in 2016. According to the Brazilian Statistics
Institute (IBGE), the Non-Alcoholic Drinks market has presented a
consistent growth in production until 2012 and certain volatility in the
following three years – compatible with the effects of the crisis the
country has been facing. In 2015, Soft Drinks responded to 75.3% of
the total produced in terms of milliard liters.

The crisis Brazil is facing has negatively affected the volume of soft
drinks. However, Statista’s forecast for the 2018-2021 period show a
reversion in the negative growth in terms of volume for this market.

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 Source: Statista

Although not a labor-intensive market, the Soft Drinks market

employs hundreds of thousands of people all over the country due to
its products’ characteristics – as water is the main input, local
production is more reasonable for the reduction of logistics costs
overcome potential economies of scale. In fact the easy access to
water resources in Brazil is the reason why the sector’s industrial
plants can be located close to the consumer markets.

Besides water, the ingredients used to produce soft drinks are sugar
(or sweeteners), concentrate (or syrup) and carbonic gas (in the case
of the fizzy drinks). Preservatives, acidulants and antioxidants may
also be part of the ingredients.

The syrup is responsible for the color, aroma and flavor of the drinks.
According to BNDES, the most consumed flavors are cola, guarana and
fruits (orange, lime, grape, etc.). Since the syrup’s formula is an
industrial secret, they are produced in the company’s own industrial
facilities and later distributed to the partners and manufacturers
spread all over the country. A common location for the syrup’s
production in Brazil is the Free Economic Zone of Manaus, in the
North of the country. As a free economic zone, the production in the
zone is exempt from certain taxes and have reduced fees for others.
Coca-Cola Brasil has a factory there.

The Soft Drinks are produced in large amounts, mostly destined to the
internal market and presenting a relative homogeneity according to a
BNDES study. However, the increase in the population’s income
widened the opportunities for a market niche of more sophisticated
products. This process increased the demand for imported products.

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DISTRIBUTION

The market for Non-Alcoholic Drinks is structured into off-trade sales

(in stores) and on-trade sales (in bars, restaurants etc.). For the off-
trade sales, supply is usually competitive, with a large variety of
brands for sales in a regular basis. However, for the on-trade sales the
exclusivity clause is a key driver. It is a widespread practice in Brazil
that restaurants and bars have an exclusivity contract with beverage
companies supplying for them. This means that if a commercial
establishment has a contact with Coca-Cola Brasil, it cannot offer
beverages from brands others than the ones owned by Coca-Cola
Brasil.

In terms of sales channel, almost all the volume of sales is originated

by the physical (offline) channel. According to Statista, only 0.1% of
the total revenue from the Non-Alcoholic Drinks market as a whole
was generated through online sales in 2017 and 2018. Until 2021,
when this rate changes for 0.2%, the sale channel will be majorly
composed by the offline component – online sales are derisory so far.

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 Source: Statista

Another offline sales channel consists of the self-service and cash-and-

carry ones. These are commonly available in public spaces like
airports, subway stations, public building and similar places. In 2016,
the volume of soft drinks sold through this channel represented 13.4
percent of total soft drink sales in Brazil.

Source: Statista

Considering the size of Brazil and the capillarity necessary to distribute

one’s product, distribution is a big concern when it comes to
competitive capabilities in the Brazilian Soft Drink market. The large
companies count on a wide spread network of local factories, bottlers
and distributors. They also heavily invest in innovation and
automation.

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The giant AmBev has advantage given its superior distribution
structure, especially as for the distribution to restaurants and
commercial establishments. AmBev counts on an extensive system
with 114 warehouses around Brazil. The company has all its activities
and checks digitalized after the implementation of the Warehouse
Management System in 100% of its Distribution Centers operations.
Regarding cargo transportation, the company has a tracking system
monitoring 100% of its 5,000 trucks fleet. The Coca-Cola System
doesn’t fall behind with its network of franchised groups.

Since they lack a distribution structure like the large corporations, the
Tubaínas supply the demand close to their manufacturing facilities, or
at a regional level. The use of PET bottles has helped them reach more
consumers in supermarket sales and in larger volumes.

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SEGMENTATION

The Soft Drinks market in Brazil can be divided into two categories. On
the one hand, there are the big companies with large scale production
and distribution, high investments in marketing and branding. On the
other hand, there are the remaining small companies with a shorter
production and distribution capacity, usually commercialized in a
regional scale. These companies’ strategy is one of price competition.

The small manufacturers of carbonated soft drinks in local regions of

Brazil are generally called Tubaínas. Initially a brand name registered
by the Ferráspari Company, Tubaínas (also known as Turbaínas) are
small-scale manufacturers of the so-called "B brand" soft drinks.
Around the 1940s and the 1950s, after the Ferráspari Company gave
permission to other soda manufacturers to use the term Tubaínas as a
sort of suffix preceding their brand name. And so Tubaínas became a
general term to designate low-profile soft drinks.

This category of Soft Drinks is popular in the Southeast and South

regions of Brazil, particularly in the State of São Paulo and its
countryside – where Ferráspari Company is originally from.

The competitiveness of the Tubaínas can be associated to two main

aspects. Firstly, these products are sold at significantly lower prices
when compared to the large corporations’ brands, such as Coca-Cola’s
and AmBev’s products. Therefore, they are more accessible to lower
classes as well. Secondly, from a regional perspective the Tubaínas
tend to meet the demand of the area surrounding its production.
Since these manufacturers usually do not have distribution systems
like the large companies, their production is driven by regional
demand.

27
However, some of the Tubaínas have managed to move pass this
regional barrier and reach further markets. This is the case of Dolly
and Refrigerantes Convenção, for instance.

UNDERSTANDING THE MARKET CONCENTRATION

According to the Brazilian Association of Manufacturers of Soft Drinks

(AFREBRAS), market concentration is an issue in the segment. The
number of companies has drastically reduced since 1960, with large
corporations acquiring local manufacturers as a way of expanding
their capillarity. In addition to that there is also the fact that large
companies have more capital to invest in production and distribution,
thus increasing productivity more easily and creating a larger lag for
smaller companies.

Source: AFREBRAS

Large corporations own over 80% of the market share and invest
more heavily in technology, distribution and marketing. The Coca-Cola
Brasil leads the market with a 57.8% share in 2017, followed by
AmBev with 16.4% and Heineken with 4%. One can notice that the
Brazilian Soft Drinks market is highly concentrated, a trend that has
been growing for decades with the acquisition of local and smaller
companies by the large corporations.

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Mergers and acquisitions have characterized the Soft Drinks market in
Brazil from the start. As a country of continental dimensions and given
the distribution characteristics and difficulties in this market, a spread
regional presence was necessary for increasing market access – and
consequently, profits.

The Coca-Cola Company soon noticed these market features and,

after opening its first factory in Brazil, started to implement its
franchise model likewise in the American market. Thru partnerships
and acquisition of local companies, Coca-Cola Brasil stablished itself
well in Brazil. An important acquisition for the Coca-Cola Brasil System
was that of Leão Junior (later renamed Leão Alimentos e Bebidas), a
company original from South Brazil that produced iced tea from a
specific herb called “erva-mate”. The Mette Leão iced tea was very
popular in Brazil and is characterized by a different taste from the
other iced teas.

The second largest player in this market, AmBev has a long history
with mergers. The company was created in 1999 as a result of the
union of two Brazilian breweries, Cervejaria Brahma and Companhia
Antarctica. The merger was analyzed by the antitrust authority who
voted in favor in March 2000, with some restrictions which included
the sell out of 5 factories and the share of its distribution network
with its competitor for the following 4 years. After the merger, AmBev
became the 5th largest beverage company in the world.

It is relevant to mention that Cervejaria Brahma had an agreement

with PepsiCo International since 1984 for the production,
commercialization and distribution of Pepsi Cola in the Brazilian
market – which was later expanded to other products like Lipton Iced
Tea. On the other hand, it was PepsiCo who bottled and distributed
the famous Guaraná Antarctica in Europe from 2001. This partnership
with PepsiCo International holds until the present.

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In March 2004, AmBev and the Belgian brewer Interbrew merged,
forming the InBev. And, in 2008 the acquisition of the American
Anheuser-Busch by the Belgian-Brazilian InBev took place, forming the
giant Anheuser-Busch InBev SA/NV (abbreviated as AB InBev). Later in
2016 the merger finally took place, adding to the pile the British
SABMiller.

Thus, Ambev S.A. is currently a subsidiary of Interbrew International

B.V., which is in turn a subsidiary of Anheuser-Busch InBev SA/NV.
Since AmBev is originally the result of the merger between two
Brazilian companies that had a solid market representativity, AmBev
holds a vast number of brands with regional and local penetration, as
well as the competitive advantage of having a wide distribution
network spread all over Brazil.

The continuous mergers and acquisitions in the past two decades

have helped concentrate even more the Brazilian Soft Drinks market.
The Tubaínas still represent a challenge to the large corporations as
for its regional popularity, but nonetheless having three companies
responding to over 80% of the market share characterizes the
Brazilian Soft Drinks market as concentrated.

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Coca-Cola Brasil
http://www.cocacolabrasil.com.br/

Location: Praia de Botafogo, 374. Rio de Janeiro. Zip code: 22250-040

Identification: CNPJ 45.997.418/0001-53
Number of employees: 53,700 Brazil 2017
Net Income: 5.05B R$ Brazil S1Y2017 (refers to Coca-Cola Femsa)
Business Segmentation: Non-alcoholic beverage

Description: Coca-Cola Brasil is a subsidiary from the Coca-Cola

Company. It first came to Brazil in 1941, in the occasion of World War
II. The president of the company promised the US military that every
American soldier would have a cold coke around. Thus, Coca-Cola
produced its first soda in Northeast Brazil in 1941 as a means to
supply the ships stopping in their way to Europe. In the following year,
Coca-Cola inaugurated its first factory in Brazil, located in Rio de
Janeiro.

A few years later, in 1945, Coca-Cola implemented a franchise system

for its activities in Brazil – which had been a success in the USA from
the beginning of the century. The Coca-Cola System in Brazil is
composed by 9 groups of franchised manufacturers, as well as a
partnership with Leão Alimentos e Bebidas. These manufacturers are
spread around the country as to facilitate the country-wide supply.

Coca-cola is the largest player in the Non-Alcoholic beverage market

in Brazil, with over 140 different products ranging from the traditional
cola to fruit flavors, isotonic drinks, iced tea and the local Matte Leão
iced tea, among others. The company heavily invests in marketing and
is now investing in increasing the distribution of its low and zero sugar
products in the country.

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AmBev
http://www.ambev.com.br/

Location: Rua Dr. Renato Paes de Barros 1017 – 4th floor. São Paulo.
Zip code: 04530-000.
Identification: CNPJ 02.808.708/0001-07
Number of employees: 35,000 Brazil 2018
Net Income: 2.61B US$ Brazil 2016
Business Segmentation: Alcoholic and Non-alcoholic beverage

Description: AmBev was created in 1999 from the union of two

Brazilian breweries, Cervejaria Brahma and Companhia Antarctica.
After a series of mergers and acquisitions, Ambev S.A. is currently a
subsidiary of Interbrew International B.V., which is in turn a subsidiary
of Anheuser-Busch InBev SA/NV. Furthermore, Ambev keeps the
partnership with PepsiCo made by Cervejaria Brahma and
manufactures and distributes PepsiCo Soft Drinks in Brazil.

One of AmBev’s major competitive advantages is its superior

distribution structure in the Brazilian territory. The company counts
on 100 direct distribution centers and 6 excellency centers in Brazil.

AmBev has a product line that comprises sodas, iced teas, energy
drinks and isotonic drinks in a wide range of flavors. The company’s
leading Soft Drink is the famous Guaraná Antarctica, which held a 7%
market share in 2016 right after Coca-Cola. Ambev acquired in 2016
the juice company “Do Bem” as a means to expand even more its
portfolio.

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Heineken
http://www.heinekenbrasil.com.br/

Location: Ed. Continental Square. Rua Olimpíadas, 205 – 6th floor.

Vila Olímpia - São Paulo - SP. Zip code: 04551-000
Identification: CNPJ 12.015.515/0001-44
Number of employees: 13,000 Brazil 2017
Net Income: 3.7B R$ Brazil 2016 (refers to the former Brasil Kirin)
Business Segmentation: Alcoholic and Non-alcoholic beverage

Description: Heineken is a well-known brewing company originally

from the Netherlands. It has stablished itself in Brazil in 2010 with the
acquisition of FEMSA Cerveza, consolidating itself as a leading brewery
in the country. However, only recently with the acquisition of Brasil
Kirin in 2017 that Heineken added Non-Alcoholic Drinks to its
portfolio.

Brasil Kirin was part of the Japanese group Kirin Holding Company and
had previously acquired the Brazilian Schincariol and its portfolio of
Soft Drinks, waters and beers. The acquisition of Brasil Kirin by
Heineken put the company not only as a leading in the beer segment
(second place, behind AmBev), but among the top 3 in the Soft Drinks
segment in Brazil.

The product portfolio owned by Heineken comprises the Viva Schin

(flavors guaraná, cola, orange, citrus, lime grape and POP), Viva Schin
mini, K Energy, Schin Tônica, Skinka and Itubaína.

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Red Bull

https://energydrink-br.redbull.com/

Location: Avenida Cidade Jardim, nº 314, 1ª sobreloja. São Paulo - SP.

Zip code: 01454-000
Identification: CNPJ 02.946.761/0001-66
Number of employees: Not available
Net Income: Not available
Business Segmentation: Non-alcoholic beverage – Energy Drinks

Description: The Austrian Energy Drink brand first registered as a

business in Brazil in 1999. Traditionally, the brand is associated with
sports and parties. In its Brazilian market Red Bull has been doing its
job to keep its market leadership. In 2007, the first Red Bull Air Race in
Brazil took place in Rio de Janeiro, with a record in public of 1M
people.

Red Bull invests heavily in marketing and sponsors radical sports and
auto racing. Red Bull has a team in Stock Car Brasil since 2007, the Red
Bull Racing Brasil. It also supports a soccer team, known as the Red
Bull Brasil.

Red Bull leads the energy drink market in Brazil. It is the first name to
come in the client’s minds when they think about energy drinks.
However, its market share has decrease from over 60% in the last
decade to 50% in 2016. Its main competitors are Coca-Cola’s Burn,
Monster, TNT (owned by Cervejaria Petrópolis) and AmBev’s Fusion.
Smaller brands sell their products in PET bottles and tend to gain
consumers in terms of the price offered.

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Bebidas Fruki S.A
http://www.fruki.com.br/

Location: Rodovia BR 386, KM 346 S/N. Lajeado (RS), Brasil.

Identification: CNPJ 87.315.099/0001-07
Number of employees: 900 Brazil 2014
Net Income: 194M R$ Brazil 2016
Business Segmentation: Non-alcoholic and alcoholic beverage

Description: Bebidas Fruki S.A. produces and sells soft drinks, energy
drinks, juices, and mineral water. The company was founded in 1924
and is based in the city of Lajeado, in the South of Brazil. Over the
years, the company has expanded a lot in the South region of Brazil,
counting on a large distribution network in the region.

According to Bloomberg, Bebidas Fruki S.A. operates as a subsidiary of

Frusapar Participações S.A. The company’s production capacity is of
420 million liters per year and it is the larger Soft Drinks producer in
the State of Rio Grande do Sul, where it is originally from.

The company’s product line comprises Soft Drinks in flavors like

guarana, cola, orange, lime, grape, citric fruits, berries and tropical
fruits, as well as an energy drink, a water line (regular and premium),
juices and beers. Fruki’s products are marketed in five sizes: 300 ml,
350ml, 600ml, 1.5 liters and 2 liters.

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Dolly
http://www.dolly.com.br/

Location: Av. Paranapanema, 192 - Parque Reid, Diadema – SP. Zip

code: 09930-450.
Identification: CNPJ 02.286.974/0001-09
Number of employees: Not available
Net Income: Not available
Business Segmentation: Non-alcoholic beverage

Description: Dolly is a 100% Brazilian brand created in 1987, pioneer

in the market of dietary Soft Drinks in Brazil. After consolidating its
first product, the so-called Diet Dolly, in 1994, the company strategy
was to extend its production line to regular Soft Drinks (sweetened
with sugar). The goal was to offer different flavors of Soft Drinks, such
as guaraná, lemon, grape, orange and cola flavors.

From its expanded product line, Dolly Guaraná is it sales leader.

Dolly’s products are marketed in three sizes: 350ml, 2 liters and 3.3
liters.

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Refrigerantes Convenção
http://convencao.ind.br/

Location: Rua Coronel Rodovalho, 170, Jardim Vera Tereza - Caleiras -

SP
Identification: CNPJ 56.199.714/0001-25
Number of employees: Between 501-1,000
Net Income: Not available
Business Segmentation: Non-alcoholic beverage

Description: The company was founded in 1951, in the city of Itu, in

São Paulo State. The Refrigerantes Convenção began its activities as a
distillery of alcoholic beverages, but gradually expanded to the Soft
Drinks market. The company later started offering different flavors of
Soft Drinks, such as Orange, Guaraná, Guarana Light, Frutaína, Lemon,
Grape and Pineapple. In addition to the Convenção Soft Drinks, the
company owns other product lines like Convenção Chá (an iced tea),
Convenção Refresco (a fruit juice-based drink), Convenção Xarope,
and other brands as well as the sodas Vitt’s, Guaraná Amazon,
Chinotto, Hcon Lemon, ZeroCon and água Doce Vida.

Convenção is one of the most traditional Soft Drinks brand in São

Paulo State’s countryside, which is highlighted by the presence of the
company's wide line of products in most of the supermarkets in cities
like Itu and Campinas. Their products are marketed in four sizes:
350ml, 600ml, 1 liter and 2 liters.

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