Alcoholic Drinks in Bolivia

Report Summary

Discover the latest market trends and uncover sources of future market growth for the Alcoholic Drinks industry in Bolivia with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

The Alcoholic Drinks in Bolivia market research report includes:

• Analysis of key supply-side and demand trends
• Detailed segmentation of international and local products
• Historic volumes and values, company and brand market shares
• Five year forecasts of market trends and market growth
• Production, imports by origin, exports by destination
• Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

• What is the market size of Alcoholic Drinks in Bolivia?
• What are the major brands in Bolivia?
• Have there been any alcoholic drinks legislative changes over the past 12 months?
• How is the alcoholic drinks industry affected by the recession?
• What is consumed more; beer, wine or spirits?
• What have been the key trends seen in new product developments?
• Do alcoholic drinks consumers want value for money or added value?

Why buy this report?

• Gain competitive intelligence about market leaders
• Track key industry trends, opportunities and threats
• Inform your marketing, brand, strategy and market development, sales and supply functions

EXECUTIVE SUMMARY

Consumption grows steadily over the review period

Demand for alcoholic drinks in Bolivia continues to grow despite the challenging environment in the country. Over the review period, the authorities and non-governmental organisations attempted to reduce consumption of alcoholic drinks as this was identified as one of the key factors behind domestic violence and also as consumption among minors continued to grow. Higher taxes and new regulations on operating hours of outlets selling these products were approved by local governments, but despite this companies adapted their strategies developing new segments through continuous launches of new products, improving their distribution, and investing large sums of money in marketing activities to support their brands with very good results as volume and value sales witnessed growths in 2011.

New tax regulation favours contraband

A new tax has been applicable to alcoholic drinks since January 2011; an additional percentile aliquot for excise tax was approved. It means that from this year onwards the ICE (Specific Consumption Tax) is charged twice: a specific amount per litre and a percentile amount based on product price. This new regulation results in an additional 5-10% tax which impacts directly on prices and favours contraband products, enhancing their advantageous price differential over legally distributed products.

War against informal market becomes more difficult

Almost all categories of alcoholic drinks are adversely impacted by contraband or counterfeit products. Despite authorities’ efforts to improve border controls, smugglers continue to find ways to illegally import alcoholic drinks into Bolivia. The informal market impacts both local and international brands, but it is worth noting that the domestic wine industry is especially undermined by this illegal activity, given the large volume of Argentinean and Chilean economy brands entering the country illicitly. International companies must face the fact that their own brands are sold in traditional markets at significantly lower prices which ultimately limits their growth.

Companies focused in on-trade channels

Despite the off-trade channel continuing to dominate sales in volume terms, companies are focusing their efforts on the on-trade channel as there are fewer restrictions and it also affords a better opportunity to reach consumers directly through promotional activities. Once exclusivity contracts are outlawed in the country, smaller companies will enter the channel intensifying competition and underpinning demand growth.

Expected conditions will challenge competitors to improve strategies

Similar to over the review period, it is expected that competitors will be challenged to adapt their strategies to a changing environment. The government has announced that it intends to increase taxes again in an attempt to generate resources that will be used for nutritional programmes intended to increase milk consumption among Bolivian consumers. It also intends to reduce the hours permitted for the sale of alcoholic drinks in on-trade establishments as part of its law and order plans, which is expected to have a negative impact on demand.

Table of Contents

Alcoholic Drinks in Bolivia - Industry Overview

EXECUTIVE SUMMARY
Consumption grows steadily over the review period
New tax regulation favours contraband
War against informal market becomes more difficult
Companies focused in on-trade channels
Expected conditions will challenge competitors to improve strategies

MARKET BACKGROUND
Legislation

TAXATION AND DUTY LEVIES
Table 1 Taxation and Duty Levies on Alcoholic Drinks 2011
Table 2 Typical Wholesaler and Retailer Off-Trade Mark-Ups by Selected Category 2011
Table 3 Selling Margin of a Typical Beer Brand 2011
Table 4 Selling Margin of a Typical Wine Brand 2011
Table 5 Selling Margin of a Typical Spirits Brand 2011

OPERATING ENVIRONMENT

KEY NEW PRODUCT LAUNCHES
Summary 1 Key New Product Developments 2010-2011

MARKET INDICATORS
Table 6 Retail Consumer Expenditure on Alcoholic Drinks 2006-2011

MARKET DATA
Table 7 Sales of Alcoholic Drinks by Category: Total Volume 2006-2011
Table 8 Sales of Alcoholic Drinks by Category: Total Value 2006-2011
Table 9 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2006-2011
Table 10 Sales of Alcoholic Drinks by Category: % Total Value Growth 2006-2011
Table 11 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Volume 2011
Table 12 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Value 2011
Table 13 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Volume 2011
Table 14 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Value 2011
Table 15 Company Shares of Alcoholic Drinks by Global Brand Owner 2007-2011
Table 16 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2006-2011
Table 17 Off-trade Sales of Alcoholic Drinks by Category and Distribution Format: % Volume Analysis 2011
Table 18 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2011-2016
Table 19 Forecast Sales of Alcoholic Drinks by Category: Total Value 2011-2016
Table 20 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2011-2016
Table 21 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2011-2016

DEFINITIONS
Sources
Summary 2 Research Sources

Alcoholic Drinks in Bolivia - Company Profiles

Bodegas y Viñedos de La Concepción SA in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
Production
Summary 5 Bodegas y Viñedos de La Concepción SA: Production Statistics 2011
COMPETITIVE POSITIONING
Summary 6 Bodegas y Viñedos de La Concepción: Competitive Position 2011

Bolivian Drinks in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
Production
Summary 8 Bolivian Drinks: Production Statistics 2011
COMPETITIVE POSITIONING
Summary 9 Bolivian Drinks: Competitive Position 2011

Cerveceria Boliviana Nacional SA in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
Production
COMPETITIVE POSITIONING
Summary 12 Cervecería Boliviana Nacional SA: Competitive Position 2011

Compañia Cervecera Boliviana SA in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
Production
Summary 15 Compañía Cervecera Boliviana SA: Production Statistics 2011
COMPETITIVE POSITIONING
Summary 16 Compañía Cervecera Boliviana SA: Competitive Position 2011

Opal Ltda in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
Production
COMPETITIVE POSITIONING
Summary 19 Opal Ltda: Competitive Position 2011

Supermercado DeLicor in Alcoholic Drinks (Bolivia)
STRATEGIC DIRECTION
KEY FACTS
Internet Strategy
COMPANY BACKGROUND
Chart 1 Supermercado DeLicor: DeLicor in La Paz
Private label
COMPETITIVE POSITIONING

Beer in Bolivia - Category Analysis

HEADLINES

TRENDS
Since the entry of Compañía Cervecera Boliviana SA (CCB) into the beer arena in 2006, the market has become more dynamic despite the strong position of the current leader Cervecería Boliviana Nacional SA (CBN). Over the review period, but especially in the last two years of the review period domestic and international companies launched new brands in an attempt to develop niche markets or less developed segments such as female and younger consumers.

Production, Imports and Exports

COMPETITIVE LANDSCAPE
Cervecería Boliviana Nacional SA (CBN), which is owned by Anheuser-Busch InBev, accounts for 94% of total volume sales in 2011. Several factors underpin this leadership: the largest production capacity; the best developed distribution network; high investment capacity; and particularly the fact that its brands are already positioned as traditional ones among Bolivian consumers all over the country. The strong position of CBN makes it difficult for other competitors to reach higher levels of sales forcing them to compete in less developed segments or to develop new ones, with products mainly targeted at higher-income consumers.

PROSPECTS
Beer is expected to continue to grow over the forecast period, but more moderate rates will be observed. Production capacity is one of the limiting factors to higher growth, as the leading company is currently producing at 95% of its capacity. This fact favours the growth of imported brands and smaller local competitors, however despite these companies increasing their sales, their impact on the overall market will not be significant.

CATEGORY BACKGROUND
Lager price band methodology
Summary 22 Lager by Price Band 2011
Table 22 Number of Breweries 2006-2011

CATEGORY DATA
Table 23 Sales of Beer by Category: Total Volume 2006-2011
Table 24 Sales of Beer by Category: Total Value 2006-2011
Table 25 Sales of Beer by Category: % Total Volume Growth 2006-2011
Table 26 Sales of Beer by Category: % Total Value Growth 2006-2011
Table 27 Sales of Beer by On-trade vs Off-trade Split: Volume 2006-2011
Table 28 Sales of Beer by On-trade vs Off-trade Split: Value 2006-2011
Table 29 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 31 Beer: Production, Imports and Exports: Total Volume 2005-2010
Table 32 Company Shares of Beer by National Brand Owner 2007-2011
Table 33 Company Shares of Beer by Global Brand Owner 2007-2011
Table 34 Brand Shares of Beer 2008-2011
Table 35 Forecast Sales of Beer by Category: Total Volume 2011-2016
Table 36 Forecast Sales of Beer by Category: Total Value 2011-2016
Table 37 Forecast Sales of Beer by Category: % Total Volume Growth 2011-2016
Table 38 Forecast Sales of Beer by Category: % Total Value Growth 2011-2016

Cider/Perry in Bolivia - Category Analysis

HEADLINES

TRENDS
Cider continues to be hit hard by contraband. Despite companies’ and authorities’ efforts to combat this illegal market, such products continued to be preferred by consumers due to their more attractive prices and strong brand positioning. Argentinean brand Del Valle by Bodegas Del Valle is positioned as a consumer favourite and over the last 10 years formal companies have tried to distribute it taking advantage of its strength of popularity but failed, as smugglers continued to offer the brand illegally at lower prices. Cider performs in a particular way through the year, as from January to September formal brands dominate sales and display their best efforts to attract consumers, while in the last quarter of the year when demand reaches its highest level, contraband brands invade the marketplace displacing formal competitors.

Production, Imports and Exports

COMPETITIVE LANDSCAPE
Dicon y/o Ricardo Arana leads sales in 2011 with a total volume share of 58%. Formal establishment, regular supply of brands and affordable prices are behind this leadership. Traditionally the Argentinean brand Del Valle by Bodegas del Valle is top-of-mind among Bolivian consumers, but as this has been taken over by contraband it has been very difficult for legitimate companies to distribute it, which caused irregular supply and benefited other smaller brands such as Celebrate and Cereser, both owned by the current leader.

PROSPECTS
A healthy 6% CAGR in both total volume and constant value terms is expected for cider/perry over the forecast period. High popularity of cider among Bolivian consumers and affordable prices for this type of product are behind this expected performance over the forecast period. Cider is already positioned as the alcoholic drink of choice for special occasions; wedding, Christmas and New Year’s Eve toasts are always accompanied by this product in most Bolivian households which suggest its consumption will continue to grow in the short and medium term.

CATEGORY DATA
Table 39 Sales of Cider/Perry: Total Volume 2006-2011
Table 40 Sales of Cider/Perry: Total Value 2006-2011
Table 41 Sales of Cider/Perry: % Total Volume Growth 2006-2011
Table 42 Sales of Cider/Perry: % Total Value Growth 2006-2011
Table 43 On-trade vs Off-trade Sales of Cider/Perry: Volume 2006-2011
Table 44 On-trade vs Off-trade Sales of Cider/Perry: Value 2006-2011
Table 45 On-trade vs Off-trade Sales of Cider/Perry: % Volume Growth 2006-2011
Table 46 On-trade vs Off-trade Sales of Cider/Perry: % Value Growth 2006-2011
Table 47 Company Shares of Cider/Perry by National Brand Owner 2007-2011
Table 48 Company Shares of Cider/Perry by Global Brand Owner 2007-2011
Table 49 Brand Shares of Cider/Perry 2008-2011
Table 50 Forecast Sales of Cider/Perry: Total Volume 2011-2016
Table 51 Forecast Sales of Cider/Perry: Total Value 2011-2016
Table 52 Forecast Sales of Cider/Perry: % Total Volume Growth 2011-2016
Table 53 Forecast Sales of Cider/Perry: % Total Value Growth 2011-2016

RTDs/High-Strength Premixes in Bolivia - Category Analysis

HEADLINES

TRENDS
During 2010/2011 several launches were observed in the RTDs/high-strength premixes arena. Both domestic and international companies introduced new products targeting mainly younger consumers. These companies base their competition mainly on price, but in also trying to steal sales from the current leader, they have begun to market new varieties of products. Traditionally RTDs were made from a mix of dark rum and a soft drink, but in the last two years of the review period products with vodka, tequila and white rum began to gain ground among consumers.

COMPETITIVE LANDSCAPE
Opal Ltda continues to lead RTDs with a 91% share of total volume sales. The company has been able to position its brand Cuba Libre as a favourite among young drinkers through large investments in marketing strategies. Cuba Libre’s image as the perfect companion for partying has been strongly reinforced by the company participating in key social events and contracting well-known Bolivian models to promote the brand. These strategies have been especially successful in the eastern part of the country, where social status carries more importance since consumers are more concerned about fashion and image issues.

PROSPECTS
It is expected that the wider availability of brands in RTDs will drive growth over the forecast period. Companies will take advantage of trends influencing younger consumers, who now look for another alternative to beer. Another factor that will also favour growth is the increasing popularity of vodka among young adults; most of the products launched during 2010/2011 featured a mix of vodka and soft drinks, confirming the higher demand for these types of drinks.

CATEGORY DATA
Table 54 Sales of RTDS/High-strength Premixes by Category: Total Volume 2006-2011
Table 55 Sales of RTDS/High-strength Premixes by Category: Total Value 2006-2011
Table 56 Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2006-2011
Table 57 Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2006-2011
Table 58 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Volume 2006-2011
Table 59 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Value 2006-2011
Table 60 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Volume Growth 2006-2011
Table 61 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Value Growth 2006-2011
Table 62 Company Shares of RTDS/High-strength Premixes by Global Brand Owner 2007-2011
Table 63 Company Shares of RTDS/High-strength Premixes by National Brand Owner 2007-2011
Table 64 Brand Shares of RTDS/High-strength Premixes 2008-2011
Table 65 Forecast Sales of RTDS/High-strength Premixes by Category: Total Volume 2011-2016
Table 66 Forecast Sales of RTDS/High-strength Premixes by Category: Total Value 2011-2016
Table 67 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2011-2016
Table 68 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2011-2016

Spirits in Bolivia - Category Analysis

HEADLINES

TRENDS
Since January 2011, a new excise tax has been applied to alcoholic drinks in Bolivia. Differentiated rates are established depending on the type of beverage. While some wine and spirits categories have been taxed at an additional 5%, the largest categories of spirits such as whiskies and rum are taxed by an additional 10%. This has impacted directly on spirits prices as was evident in the first quarter of 2011 when most competitors increased their prices by a minimum of 10%. Most affected brands are highly priced ones, since price difference is significant, forcing consumers to reduce their purchase frequency or in the worst case to shift to cheaper options.

Production, Imports and Exports

COMPETITIVE LANDSCAPE
D&M Bolivia Ltda leads sales in 2011 with a total volume share of 26%; the company achieved this position thanks to the wide range of well-positioned brands it distributes, not only imported, but also domestic. The company currently distributes Casa Real, the leading singani brand, and at least one leading brand in almost all categories, such as Chivas Regal (whiskies), Havana Club (rum), and Sauza (tequila), which coupled with its well-developed distribution network and the constant launch of new products/brands allow the company to achieve a strong relationship with retailers favouring its position among consumers.

PROSPECTS
Despite price increases caused by higher taxes applicable to spirits since 2011, healthy CAGRs of 4% and 5% in total volume and constant value terms, respectively, are expected for spirits over the forecast period. Demand is expected to continue growing, however, as the price increases seen in 2011 were considerable it is also expected that some consumers, particularly among the middle-income segment, may shift to more affordable options impacting negatively on highly-priced brands’ sales.

CATEGORY DATA
Table 69 Sales of Spirits by Category: Total Volume 2006-2011
Table 70 Sales of Spirits by Category: Total Value 2006-2011
Table 71 Sales of Spirits by Category: % Total Volume Growth 2006-2011
Table 72 Sales of Spirits by Category: % Total Value Growth 2006-2011
Table 73 Sales of Spirits by On-trade vs Off-trade Split: Volume 2006-2011
Table 74 Sales of Spirits by On-trade vs Off-trade Split: Value 2006-2011
Table 75 Sales of Spirits by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 76 Sales of Spirits by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 77 Vodka Production, Imports and Exports: Total Volume 2005-2010
Table 78 Company Shares of Spirits by National Brand Owner 2007-2011
Table 79 Company Shares of Spirits by Global Brand Owner 2007-2011
Table 80 Brand Shares of Spirits 2008-2011
Table 81 Forecast Sales of Spirits by Category: Total Volume 2011-2016
Table 82 Forecast Sales of Spirits by Category: Total Value 2011-2016
Table 83 Forecast Sales of Spirits by Category: % Total Volume Growth 2011-2016
Table 84 Forecast Sales of Spirits by Category: % Total Value Growth 2011-2016

Wine in Bolivia - Category Analysis

HEADLINES

TRENDS
Domestic companies have decided to become absolute leaders in the fast-growing wine market. Over the review period, the main wineries started to work together in an attempt to position their brands as top-of-mind among Bolivian consumers, but also to promote them as unique options overseas given the high altitude where the grapes are cultivated. During 2011 producers and distributors continued to invest heavily to improve brand positioning, but also to increase wine consumption through campaigns that are intended to increase consumer awareness about features, consumption occasions and varieties of wine in the market.

Production, Imports and Exports

COMPETITIVE LANDSCAPE
Bodegas y Viñedos La Cabaña SA with its leading brand Kholberg continues to dominate volume sales in 2011. This domestic company has already positioned its products as traditional among Bolivian consumers of all segments as it markets a wide variety of wines, from economy to premium. Three more domestic companies follow Bodegas y Viñedos La Cabaña SA; Bodegas Milcast Corp and its brand Aranjuez; Bodegas y Viñedos de La Concepción SA with La Concepción; and Viñedos y Bodegas Campos de Solana Ltda with its brand Campos de Solana. All these companies have being improving their catalogues over the review period, launching higher quality wines, especially varietal wines, in an attempt to attract more demanding consumers in higher socioeconomic groups.

PROSPECTS
Healthy double-digit growth in terms of total volume and constant value is expected over the forecast period. According to Bolivian Wines, a corporate project developed by the main producers of the industry, wine is perceived by Bolivian consumers as a better-tasting, higher-quality and more accessible drink, which encourages competitors to continue investing in the development of the market through constant innovation, image improvements and offer widening as there is considerable room for growth, especially among young adult consumers, those no longer consuming beer and looking for a higher-quality product.

CATEGORY DATA
Table 85 Sales of Wine by Category: Total Volume 2006-2011
Table 86 Sales of Wine by Category: Total Value 2006-2011
Table 87 Sales of Wine by Category: % Total Volume Growth 2006-2011
Table 88 Sales of Wine by Category: % Total Value Growth 2006-2011
Table 89 Sales of Wine by On-trade vs Off-trade Split: Volume 2006-2011
Table 90 Sales of Wine by On-trade vs Off-trade Split: Value 2006-2011
Table 91 Sales of Wine by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 92 Sales of Wine by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 93 Wine Production, Imports and Exports: Total Volume 2005-2010
Table 94 Forecast Sales of Wine by Category: Total Volume 2011-2016
Table 95 Forecast Sales of Wine by Category: Total Value 2011-2016
Table 96 Forecast Sales of Wine by Category: % Total Volume Growth 2011-2016
Table 97 Forecast Sales of Wine by Category: % Total Value Growth 2011-2016