HEINEKEN INTERNATIONAL MAGAZINE NO. 36 PAGE 4
The date is June 1990. Brazilians have had a long wait but
at last the moment has arrived: the launch of Heineken beer
in Rio de Janeiro. Heineken gets off to a flying start and
everyone is elated. Eighteen months later the enthusiasm
has been dampened, as the recession has bitten deep; by
October 1991 inflation is running at 22.6% a month.
Rio de Janeiro, a city of eight million
inhabitants, was the first city in
Brazil in which Heineken beer was
introduced.
Economic recession slows
Heineken's growth in Brazil
But first we need to take a trip
even further back in time. For a lot
had to happen before the introduc
tion of Heineken in Brazil. It all star
ted in 1980 when the Coca Cola bot
tler in Belo Horizonte decided to
build a brewery. He wanted to break
through the stranglehold of the two
existing breweries so as to protect
the sales of his own soft drinks. The
breweries - which also have soft
drinks in their range - applied a poli
cy of 'no soft drinks, no beer' during
the summer months. Since there is a
shortage of beer in Brazil every sum
mer, the customers were forced to
buy soft drinks from the breweries.
The Coca Cola bottler realised
that he needed a beer brand in his
range to halt the decline in Coca
Cola's market share. Imported beers
were not permitted at that moment
and so the bottler decided on the bold
step of building a brewery and deve
loping the Kaiser beer brand. Coca
Cola headquarters in Atlanta, USA,
gave the plan the green light but
demanded that an international brew
ery should also participate in the pro
ject.
Heineken welcomed the idea of a
participation in Kaiser, as the out
standing distribution network for
Coca Cola would in due course
prove very valuable for a possible
introduction of Heineken beer.
Other Coca Cola bottlers in Brazil
followed the example of Belo
Horizonte and six breweries were
built at record speed. In the space of
seven years Kaiser has gained a solid
position on the Brazilian beer market
with a market share of some 12%.
Marketing manager Paul Nitschmann in his office in Rio.
Shortage
In June 1990 Heineken beer (brew
ed in the Kaiser brewery in Rio) was
cautiously introduced in Rio de
Janeiro, followed six months later by
Sao Paulo. Paul Nitschmann, who
has worked in Brazil for the past year
as marketing manager of Heineken
do Brasil, says: 'In the summer of
1991 (January and February, ed.)
there was again a shortage of beer.
At that time the Brazilian economy
was prospering. People had money
to spend and so they showed a mas
sive preference for Heineken.
Everyone was enthusiastic and con
vinced that Heineken would become
an enormous success in Brazil. After
the summer the shortage of beer dis
appeared and at the same time the
economy moved into recession. The
enormous inflation at the moment
doesn't make things any easier for
us.'An extra handicap for Heineken
was the government's unexpected
decision to allow imported beers into
the Brazilian market. This decision
came shortly after Heineken beer had
been introduced. Imported beer
enjoys high prestige status in Brazil.
That's the reason why Heineken
had been trying for years to gain a
foothold via imports. Since the
strong feeling was that the Brazilian
government would not change its
policy, it was decided to brew
Heineken locally.
For a premium (i.e. pricey) prod
uct like Heineken an economic
recession comes as an extra hard
blow. Certainly when the product is
still in its build-up phase. As regards
beer, brand loyalty is reasonably
well developed, though Nitschmann
feels that this should not be overra
ted. 'People show a distinct preferen
ce for a certain beer brand, but if the
bar owner doesn't happen to have a
chilled bottle of that brand available,
they easily switch to another brand.'
Ice cold
Brazilians love an ice cold beer:
2 degrees Celsius is about the maxi
mum drinking temperature. All the
Brazilians together consume some
60 million hectolitres of beer a year.
The Copacabana in Rio is world-
famous, but the surrounding
beaches, like this one at Ipanema,
are situated in equally beautiful
scenery.
