For beer manufacturers, Latin America and the Middle East are poles apart. Consumption of alcoholic beverages in Latin America is considerably high, whereas in the Middle East, it is frowned upon. With the consumers in the U.S. and Europe turning to craft brews, beer companies are looking at Latin America and Middle Eastern countries to expand their business. However, the strategies are drastically different while approaching the two regions.
Latin America’s Love for Beer
Though Argentina and Chile are well known for their award-winning wines, people appreciate the locally brewed beer. Medellin, Cusco, Chicha, Pilsner, and Bohemia are some of the most sought-after beers. Increased consumption of beer in Latin American nations has made beer manufacturers focus on the region. In 2014, the beer market in Latin America was worth US$57,091.6 million. It is estimated that the market will grow at a CAGR of 4.4% during the period between 2015 and 2021 and reach a valuation of US$77,137.4 million by 2021.
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Giants in the beer market such as SABMiller, Anheuser-Busch InBev, and Heineken have adopted different strategies to expand their presence in the Latin American beer industry.
- Bringing new offerings: To appeal to the taste of the local customers, SABMiller has introduced premium beers in Latin America such as Miller Lite and Miller Genuine Draft.
- Acquiring local breweries: Anheuser-Busch InBev, the maker of Budweiser, has expanded in the Latin America market largely through acquisitions of local beer manufacturers such as Mexico’s Grupo Modelo. Other major players have also taken the route of acquisitions to increase their share in the Latin American beer market.
- Offering affordable beer: Companies are focusing on offering beer at affordable prices to lower-income consumers.
The region looks promising enough for the beer manufacturing companies, especially countries such as Brazil, which accounts for around 42% of total beer consumption in Latin America.
Non-Alcoholic Beer: Key for Beer Companies to Enter Middle East Beer Market
Non-alcoholic beer might not appeal to the rest of the world but the Middle East is a different story. Religious obligations have made most Middle Eastern consumers stay away from alcoholic beverages. However, this has not diminished the valuation of the Middle East beer market, which is expected to be worth US$4,861.6 million by 2021. Barbican, Bavaria 0.0%, Istak, and Bitburger Drive 0.0% Alkoholfrei are some of the non-alcoholic beers promoted by beer manufacturers in the region. Heineken, with its new nonalcoholic beer brand, Maxx, has also gained some success. Carlsberg and Anheuser-Busch InBev are also pushing non-alcoholic beer in the market in the Middle East.
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However, the insipid flavor of non-alcoholic beer is a major turnoff for seasoned as well as first-time drinkers. So, even if non-alcoholic beer gets the attention of the masses in the Middle East, the bland taste of the beverage plays spoilsport. Beer manufacturers are investing in research to enhance the taste of non-alcoholic beer. However, for the beer companies, the research might prove costly, as the process is not commercially viable and the appeal for non-alcoholic beer is limited to the Middle East.