Head of Soft Drinks - ab-inbev.com · Coca Cola Others Market Overview Share Evolution R$2.58...
Transcript of Head of Soft Drinks - ab-inbev.com · Coca Cola Others Market Overview Share Evolution R$2.58...
Francisco Sá
Head of Soft Drinks
Agenda Soft Drinks
The Brazilian Soft Drinks Market
Profitability Evolution
AmBev’s Soft Drink Strategy
75
189
246
429
2001 2002 2003 2004
Profitability Evolution
15.4% 29.4% 18.5% 7.3% EBITDA Margin EBITDA Margin
EBITDA CAGR = 79%
Relevance of Soft Drink Business
1932
75 3408
429
2001 2004
SD Total
4% 4%
12% 12%
Profitability Evolution
“Right Fews” Strategy
“Right Fews” “Right Fews”
Few Brands Few
Brands Few
Channels Few
Channels Few
Programs Few
Programs
Profitability Evolution
The “Right Fews” Strategy Profitability Evolution
Discipline to terminate non-core products focusing on the most profitable SKUs
Consistent price gap policy in relation to market leader
Close relationship with PepsiCo
Leverage pricing expertise developed for beer
Focus on few geographies
Full integration of soft drinks into beer operation, without deriving focus from beer
COGS advantage to KO Bottlers (avg-13%)
Internal AmBev Costing Exercise conservatively shows the added value for soft drinks to be in Beer Trucks in terms of Cost to Serve….
-16% -16% CSD Cost to Serve (RTM) R$ 17,83 / hl R$ 21,01 / hl
Full Costing: CSD Incremental Approach:
COGS advantage to KO Bottlers (avg-13%)
Total AmBev (ex-beer)
KOF - Brazil Andina - Brazil
2,68 2,68 2,44 2,44
2003 / 2004
2,90 2,90 2,81 2,81
2003 / 2004
2,96 2,96 2,85 2,85
2003 / 2004 *R$ per CS
System bigger than KOI Brazil
8 oz csMM’04 AmBev KO Beer in Brazil Non-Alc. In Brazil
1,017 336
150 1,069
1,353 1,219
1% Soft Drink = 0,6% Beer (Brazil) 1% Soft Drink = 0,6% Beer (Brazil)
52%
47%
41%
33% 25%
0
10
20
30
40
50
60
70
80
Brazil - Beer Brazil Soft Drink China Germany Russia 0%
10%
20%
30%
40%
50%
60%
Market Overview Relevance of the Brazilian Market
50%
16%
12%
22% 51%
49%
2005 YTD
Market Overview
Flavors
Cola
Guaraná
Orange
Lemon
Others
Flavor Segmentation
AmBev’s Guaraná Antarctica is the
#1 Guarana Brand
Market Overview
25%
25% 50% 22%
78%
Sales Channels Packaging
Channel & Packaging Segmentation
Self Service
Mom & Pop’s
Bars Single Serve
Multi Serve
32,7% 33,0% 33,2% 32,5% 30,2%
50,2% 50,6% 50,2% 50,6% 52,9%
16,9% 16,9% 16,6% 16,4% 17,1%
2001 2002 2003 2004 2005 YTD
Coca Cola
Others
Market Overview Share Evolution
R$2.58
R$1.56
R$2.32
Price for 2L PET OW Bottle
17,5
55,4
27,1
12,1
51,6
36,2
24,7
53,9
24,4
Area 1 Area 2 Area 3
Market Overview Regional Market Scenarios
AMBEV KO BR BRANDS
18,8%
11,5%
18,5%
14,5%
18,0%
25,0%
Bar M & P SS SS 1-4 SS 5-19 SS +20
Market Share by Channel Market Overview
Market Overview Multi Serve Price Evolution
Price per Liter
0,40
0,60
0,80
1,00
1,20
1,40
ago/03 out/03 dez/03 fev/04 abr/04 jun/04 ago/04 out/04 dez/04 fev/05 abr/05 jun/05
Multi Serve
AmBev Coke Others
93
95
97
99
101
103
105
jul/00 jan/01 jul/01 jan/02 jul/02 jan/03 jul/03 jan/04 jul/04 jan/05
2L OW PET
Market Overview OW 2L Pet Real Price Evolution
Real Price Index
Soft Drink Strategy
Market Share + Profitability Market Share + Profitability
Strong Brands Strong Brands Availability Availability Price Price Execution Execution
RTM Cost to Serve
RTM Cost to Serve
PepsiCo Relationship PepsiCo Relationship
Strong Brands AmBev Portfolio
Leader in the flavor segment
Second in cola segment
Leader in sports drinks
36%
92,0%
8,0%
91,6%
8,4%
2000 2005
Development AmBev Share
Strong Brands Opportunity in the Diet / Light Segment
AmBev Diet/LightBrand Equity
A B C D E F G
CC L CC L CC L
CC L
CC L CC L CC L
GA D
GA D
GA D GA D GA D GA D
GA D K L
PC L PC L PC L
PC L
PC L CC L L CC L L
CC L L
CC L L
CC L L CC L L CC L L
PT L PT L
PT L PT L
PT L PT L PT L
Strong Brands Key Brand Indicators
Preference
Consideration
Awareness 100
76
17
Video
Video
Strong Brands Effective Communication
11 11
12,4
13
2002 2003 2004 YTD 2005
Strong Brands
Preference
Guaraná Antarctica Pepsi Cola
Preference & Switchers
0 2002
J F M A M J J A S O N D
2003 J F M A M J J A S O N D
2004 J F M A M J J A S O N D
2005 J F M A
Coca Loyal
-
Switchers
Availability Gap in Execution
72,0% 74,0% 74,0% 76,0% 78,0%
50,0% 50,0% 52,0% 55,0% 53,0%
86,0% 85,0% 84,0% 86,0% 85,0%
2001 2002 2003 2004 2005 YTD
Coverage
Coca Cola
PET 2L
Total
PET 2L
4 4 AmBev # of packs
9 5 Coca Cola # of packs
Convenience
Value
Out of Pocket
Out of Home
BIB
Availability Gap in Portfolio
AmBev
CSD
Portfolio
In Home
Stock Up
1
2/3
Routine Immediate
Consumer Occasion
Purchase Occasion Benefits
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Scenario 1 Scenario 2 Scenario 3
Market Share Contribution Margin
Package Decision based on sales algorithm Availability
28,2%
27,6%
28,8%
26,5%
29,1%
30,6%
26,3%
29,4%
May 29 June 05 12 June June 19
Simulation Tool
Actual Share Performance
Estimated Share Performance
Introduction of a 2.5L PET presentation for Pepsi Cola in the South of Brazil
Availability
Per Capita
Availability
7,2 6,8
1,0
Mexico Venezuela Brazil
(Annual 8oz servings)
Gatorade Per Capita
Programs focused in execution in the point of sale
Points scored in accordance to the quality of category management
Outsourced monitoring
Increase refrigeration capacity
Execution Relationship Programs
New 2L PET bottle
Best Practice Alluminum cans
Strong Relationship with Pepsico Track record of value creation
Non Carbonated Soft Drinks
Product Innovation Pepsi Twist
Strong Relationship with Pepsico Track record of value creation
Brand innovations adapted to local consumers to boost share with profitability
Improved brand equity indicators with the correct mix of local/global initiatives
Stronger local team structure to support the business
Soft Drinks EBITDA Pool & Share
Total R$ 2.5B
R$ 0.5B AmBev
EBITDA Pool
53%
17%
30%
B Brands Ambev Coke
Soft Drinks Market Share