PONTIFICIA UNIVERSIDAD JAVERIANA

FACULTAD DE CIENCIAS ECONOMICAS Y ADMINISTRATIVAS

FUNDAMENTOS DE MERCADEO

Cesar Camilo Almeciga

Julian Andres Camacho

Juan Camilo Rios

Sebastian Ramirez

First delivery
Delivery Number Thursday 16th
Market analysis of the beer sector in 1 April
Colombia.

Main Brands

The first step in the current market research is to identify the main brands that dominate the
beer sector, this in order to highlight their characteristics and the amount of market (brand
share) that each brand has, for this we use the database "Passport" where the following
results are obtained.

Graph 1: Beer brand share 2016-2018 in Colombia, own production, data obtained from Passport.

Here you can see how consumers are distributed of the 5 best-selling beer brands in the
market, showing that first and with a wide difference is "Águila" with almost half of the
buyers, its Brand Sharing is between 47% and 48%, in second place is "Poker" with a
Brand Sharing between 26% and 30%, The next on the list is "Club Colombia" which has
between 7% and 8% of the market, followed closely by "Pilsen" whose number of
consumers is between 5% and 6% of the total, and finally we find "Costeña" which has
between 3% and 4% of consumers in the market.

Brand Description:

1. Águila: One of the most successful Colombian products in history Aguila beer has
become known as a synonym for soccer, carnival, beautiful women and as an icon of the
popular. The image of Águila points to the contemporary where it highlights the concepts
of "refreshing, passion and Colombianness".

Its logo is composed of an eagle accompanied by the name of the brand, this uses bright
colors and related to the flag of Colombia, such as yellow and blue, this in order to generate
a feeling of patriotism in the beer. Its portfolio has few types of presentation, in which we
find the regular 330 ml in a glass container, its light version also in a 330 ml glass
container, we also find its version in a 335 ml can, and finally its most recent incorporation
"Eagle Lemon Fusion" which can be found in 330 ml glass container or in a 335 ml can.

The price of its canned presentation from 2016 to the present time is between 1500 and
2300 Colombian pesos, which makes it a low cost beer accessible to a large number of
people. The target audience for this beer consists of persons between 18 and 65 years old,
men and women in all civil states (demographic), belonging to the Colombian territory, all
its regions, departments, municipalities and localities (geographic); it is more focused on
employees and non-employers who earn up to three minimum wages, aimed at the low,
lower-middle and middle social classes, up to social stratum 4 (socioeconomic); it is also
aimed at persons who practice some type of sport (non-professionally) and enjoy sporting
events (psychographic).
2. Poker: the second best-selling beer in Colombia that over time, has managed to position
itself not only in the minds of Colombians, but also in their hearts. Poker remained in the
market to its quality and high potential, characteristics that were reflected in its positioning
as one of the preferred brands in the country. From the beginning, Poker used its slogans as
a differential to stand out from its competitors. In the 70's it was "por mi tierra, por mis
amigos", in the 80's "donde hay poker, hay amigos". This last one became the focus of the
brand, a very powerful insight and referring to friendship, being this way the same one in
which it continues working "el amigo que une a los amigos" and being adapted to new
technologies and changes in the form of expressing itself, managing to have a relationship
and being more than a simple beer, Poker has become "el amigo" of the Colombians.

Their logos and colors are focused on Colombians, in order to maintain the essence or
identity of the country; A friendly and always happy country.
Its portfolio has different
types of presentations but without changing its flavor, within this we find the pokeron that
comes in a 1 liter glass presentation, the pokerita in 250ml glass presentation, and finally
the 330ml can. The advertising of each one of them we will find it diffused in
supermarkets, stores, restaurants, television, radio, press, among others.

Its price from the year 2016 to 2018 is around 1500 to 2300 Colombian pesos, where the
public to which this beer is directed consists of a social class: low, lower-middle and
middle (strata 1,2,3 and 4) which is much more massive; Within one of the investigations
they have done, they realized that the public that consumes more are the young adults and
adults, and in their majority are men.

3. Club Colombia: The third most consumed beer in Colombia is a premium lager, Club
Colombia is presented to the Colombian market with a portfolio that consists of 3 types of
beer, which are "blonde" "red" and "black", these are marketed in two different types of
packaging, either a presentation in 330 ml can or 330 ml glass bottle, its price is between
2500 and 4000 Colombian pesos depending on where you buy; Club colombia chooses to
use symbolic elements such as the "tunjo precolombino" (see annex 4) which exalts the
ancestral Colombian silverware, this in order to generate a sense of nationality towards the

brand. In addition, Club colombia aims at an image of exclusivity and class, which can be
seen reflected in its packaging and advertising, where it has slogans like “disfruta lo bueno,
con lo mejor” and “Las mejores cosas de la vida toman tiempo” its advertising is not found
everywhere, we can find it in internet ads, television commercials and in high cost
restaurants.

On the other hand, this beer is aimed at consumers with good taste, men and women
regardless of their marital status, who have sufficient income to pay for it, who live in
Colombia, generally located above stratum 4 (upper and upper middle class) and who are
between 25 and 50 years old.

4. Pilsen: The oldest brand of the Bavaria brewery, created in 1904, being the most
recognized and preferred in the Antioquia region, being the only beer that by its strong
character delivers a real reward after a hard day's work. Being the oldest brand in
Colombia,

Pilsen has suffered changes in both its image and its taste, but it has always had the
characteristic of consumption after working days, which Bavaria has always wanted to
maintain in view of its nemesis, Aguila beer. The price of beer in bottle is 2800 and the
price in tin is 1800, according to a communication from Bavaria in 2016.

The logo of the brand has had different changes, in 2012 the last change was made,
however the main colors of the brand are red and white, but in the last image the color
black was added to the labels of the packages. "every hero deserves a pilsen. more taste.
more reward." is the brand's slogan which alludes to the fact that the drink should be
deserved, as a reward for anyone who has done a hard day's work. The strategy was
launched in 2007 in the hope that it would position itself among working people.

The 350 cm3 bottle has a black label on its neck, with a white P in the middle and a red
border at the bottom. The main label is divided into two colours, red at the top and black at
the bottom, the brand word in the middle of both colours is white and below it the message
"excess alcohol is harmful to health" is bronze. The presentation of the 330 cm3 tin is
divided into the same colours as the label on the bottle, the word in the same colour and at
the bottom of the tin the message which each alcoholic product must bear.

The brand has created different activities for the public in order to consume its product, for
example, the so-called "pilsen patches", places where the brand is present for entertainment
among friends, colleagues and family. Pilsen is a brand with a wide range of public and for
different social classes, where there are different strategic points throughout the city of
Medellin and each one has different dynamics. At the beginning Pilsen has had its great
reputation in the Antioquia region, but over time its reputation and commercialization has
reached a national level, mostly in places with high temperatures. Its selected public is
young people between 18 and 35 years old, mainly for working men regardless of their
social class, as mentioned above. The brand aims at people's relaxation while consuming
the drink, being on "patch", with a group of friends.

5. Costeña: After 85 years in the market, Costeña beer is the fourth brand with the greatest
tradition in Bavaria (the brand's brewery), after Águila, Póker and Pilsen. It has been
associated to the most important events, fairs and popular celebrations of the Colombians.
Its price in a non-returnable bottle ranges between 1800 and 2300 pesos, in addition to its
presentation in a can where its price was established at 1800 pesos, according to a report
presented on March 1st, 2016.

The representative colours of the brand are red, white, grey and black. The tone of its
communication with its consumers is very direct and with the right language for young
people with its slogan "Con Costeña vives más".
The brand comes in two presentations:
in bottle and can. The 350 cm3 bottle is perpendicular to the top, small, precise for the
hand, brown in colour, with a silver-grey label with its respective red logo on the messages
"excess alcohol is harmful to health", concluding with its slogan. On the other hand, the
330 cm3 can, small silver in colour, red stripes on the top and bottom with black borders
with its respective logo and slogan, finally on the bottom with large black letters the
message "excess alcohol is harmful to health". However, this brand has a weakness and is
due to the fact that it is not very promoted by the audiovisual media, which makes it not
reach the select public for the sale of this drink.

Status of the category:

Beer production first began in Bogota in mid-1825, when artisanal barley-based beer began
to be brewed with rudimentary equipment. From there on, small breweries began to emerge
in Bogota, Bucaramanga, Cali, Ibague, Medellin, Neiva, Robledo, Pamplona, Tunja and
Socorro.

The year 1887 marks the beginning of the country's brewing industrial era, when Christian
Peter Clausen founded Cervecería La Esperanza in Floridablanca. In 1889 the construction
and assembly of the machinery brought in to start the mass production of beer was
completed. In 1917, Jorge Alfonso Clausen became the owner of Cervecería La Esperanza.
In 1889 the Sociedad Koop y Castello bought its first piece of land in Bogotá, where its
brewery was built. This company was liquidated in 1890 and Leo Koop founded Bavaria
Kopp's Deutsche Brauerei. In Antioquia, between 1892 and 1895, José Antonio Tamayo
founded Cervecería Tamayo. This brewery was characterized by its large and innovative
facilities, based on the German brewing model. When José Tamayo died, Cervecería
Tamayo was inherited and managed by his sons until 1957, when it was closed.

At the beginning of the 20th century, the beer industry was boosted to become one of the
main industries in the country at that time. This period was difficult for the beer industry
due to the strong competition. However, it was a very active period in the different regions
of the country, with new companies of all sizes, mergers and purchases.

In 1903, a star Bavarian worker, Rudolf Kohn, decides to separate from Bavaria to create
his own brewery and start production. His brewery, Rudolf Kohn & Cia's German Brewery,
started production in 1905 and managed to become one of Bavaria's main competitors.

In 1930, the great breweries of Bogotá (Bavaria) and Medellín (Continental de Medellín)
managed to unite to create one of the largest breweries in the country, Consorcio de
Cervecerías Bavaria S.A.

In the 1960s, Bavaria dominated the beer market in Colombia, producing more than three
million hectoliters per year. Its main rival was Cerveza Andina, which produced 1.5 million
hectoliters of beer per year. Bavaria continued to focus on leading the beer market in
Colombia. In the mid- sixties, Grupo Santo Domingo began to buy Bavaria shares, until it
had the majority of them. After a decade, the only independent brewery in the country was
Cervecería Andina, until, in 1975, Santo Domingo bought the majority of the shares.

At the beginning of the 21st century, Bavaria carried out a restructuring and modernization
of its plants at a national level, where it opened new ones and closed others.

Today, Bavaria handles 99% of the country's beer market. The other 1% is divided into
artisan and home breweries. In 2018, Bavaria grew 8.4% and its bestselling beer was
Águila. One factor that attracted attention in Bavaria was that the consumption of its
premium beers, such as Club Colombia, increased significantly. Colombia is the third
largest beer consumer in Latin America. In Colombia, 48 litres of beer are consumed
annually per person, which represents an expenditure of around 1 million pesos per year per
Colombian for beer consumption alone. According to a study by ProChile, the beer industry
represents 2.8% of the country's GDP.

The future of the beer industry in Colombia is quite promising. Euromonitor estimates that
by 2023 beer consumption will increase by 33.8% from $24.4 billion to $32.7 billion. This
data was obtained by making projections taking as a reference the increase in beer
consumption per year. In 2018, beer consumption increased 16.7%. The best selling beers
that increased the most are still: Águila, Poker and Club Colombia, which represent 80% of
sales.

The outlook for craft beers is quite promising. There are currently more than 200 craft beer
companies in the country, which sell around $40 billion pesos a year, representing 0.5% of
the current beer market. It is estimated that the number of jobs generated by these craft beer
companies will grow by 956% in four years.
Annexes

 Appendix 1: table of data obtained from Passport showing the Brand Share of beer
brands sold in Colombia.

 Appendix 2: Aguila 330 ml bottle presentation and logo.

 Appendix 3: Poker 330 ml bottle presentation and logo.

 Appendix 4: Club Colombia 330 ml bottle presentation in their three different

flavors and logo.
 Appendix 5: Pilsen 330 ml bottle presentation and logo.

 Appendix 6: Costeña 330 ml bottle presentation and logo.

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