Softdrink company Ajegroup builds its first brewery
Irritated by Mexico’s political volatility, the Peruvian upstart softdrink company Ajegroup, whose super-size and super-budget brand Big Kola took Latin America by storm, has decided to divert the new brewery intended for Mexico to its hometown Huachipa in Peru.
If all goes to plan, the Ajegroup will brew beer for the first time in September this year. Currently the construction of a 250 000 hl brewery is underway in Huachipa the hometown of the Añaños family and owner of the Ajegroup. It is in Huachipa where the Añaños first set up a softdrink bottling plant in the late 1980s.
According to the Ajegroup’s spokesman Alfredo Paredes, the Peruvian beer investment will be in the order of USD 35 million to USD 40 million.
Although Peru had not been intended by the Añaños to become the first country where they would try out their Big Chela project (that is beer in non-returnable plastic bottles) but Mexico, they were forced to ship the new plant to Peru after they had run into strong political opposition in Mexico. It was the introduction of an environmental tax on non-returnable bottles as of 2006 plus the political turmoil following the general elections in July, which made a revocation of the law highly unlikely and which in the end persuaded the Añaños to ditch their plans for a Big Chela in Mexico. As they had already commissioned the brewery, they found themselves in a spot of bother. All they could do was to move the plant elsewhere. And where better to start selling beer in plastic bottles than in their home market of Peru where they are well-politicked, enjoy a 23 percent share of the softdrink market and deliver their fizzy drinks to more than 200 000 points of sale?
It is believed that the Ajegroup will introduce the Big Chela beer in 625 ml, 1.1 litre and 1.5 litre PET containers. However, this is not to say that the launch of Big Chela in Peru will be an easy ride. After all, the 7 million hl-beer market is almost fully controlled (99 percent!) by brewer Backus y Johnston. The beer market has seen better times. In the early 1990s per capita consumption was in excess of 30 litres of beer. In 2004 it was down to 24 litres but growing again.
As part of a scheme to change labels and containers used by its beer brands in Peru – and to start a pre-emptive price war against Big Chela - , Backus is now introducing its Cristal beer in 650 ml glass containers, as opposed to the traditional 620 ml container widely used in that country. The brewer, a subsidiary of SABMiller, has already changed the label and decided to keep the price of the beer as it was when it came in 620 ml containers. According to Backus, the beer brand Cristal has a 50 percent share of the Peruvian beer market and 70 percent market share in Lima. Backus is spending USD 30 million (EUR 23.4 million) on the renewal of its glass containers in Peru, out of a USD 102 million investment plan to be carried out until March 2007, it was reported. 100 million containers were phased out by the end of 2006 and replaced with containers imported from Colombia, Brazil, Scotland and Spain. The rest were to be replaced with glass containers produced locally in Peru. Backus’ other beer brands Pilsen and Cusquena will follow with similar changes.
It was reported further that Backus may also consider selling beer in PET containers in the future.
Looks like Big Chela will bring some excitement to this market.
The Ajegroup’s Big Cola was an instant hit in Mexico. Together with Brazil (28.9%), Mexico (39.4%) in 2005 accounted for two thirds of Latin America’s carbonated softdrink volume. Argentina (6.2%) ranked third. All the other countries came to 25.4 percent of the total volume, says the Beverage Marketing Corporation, New York. Photo: Ajegroup
