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Interview: Inside Peru's beer business
Image from Flickr.
By Debora Dongo-Soria for El Comercio
Translated and adapted by PeruthisWeek.com
October 4, 2011
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Graham Mackay, CEO of SAB Miller, the second-largest brewer in the Word, was in Lima for a day to bid farewell to one of his stars, Robert Priday, president of Backus, who after six years in Peru, is leaving for Poland to serve as president of the Piworoska company.
In an interview, Mackay praised the performance of SAB Miller’s operations in Latin America and said that Peru is one of its best markets in the world. Of SAB Miller’s $5.4 billion in revenue this year, $1.6 billion has come from the region. Along these lines, Peru has doubled its growth in the last six years, and Backus’ receipts in 2010 climbed to S/.3.2 billion.
Also, Mackay said that there will be new brands in Peru, and said that he is looking to improve the image of the beer industry throughout the world.
How has the market evolved in Latin America?
It is a rising market. Per capita consumption is relatively low compared to other countries, but it has grown since our company arrived. Latin America is the most profitable region for our company, and we think that it still has the potential to grow…The region has been one of our most stable markets during the international financial crisis…
What importance does Peru have for your operations at a regional level?
Peru is a very important country. It’s one of our most profitable markets. It’s among the five best in the world for sales and profitability. It’s fourth, and in the region it’s in second place, only behind Colombia. The growth in Peru has been strong and sustained.
In fact, our local operation has had its best results in the last four years. The growth has doubled in six years.
Then you must have plans for new investment, and launching new brands to continue with the expansion…
I can’t talk about this yet, but we are constantly reviewing our brand portfolio. What we have done in Peru is to reposition some of our existing brands and improve their presentation, as well as our communication efforts. This has brought us good results, and despite the entrance of some competitors, we have gained market share. We now have 93% of it.
What is needed for Peru to overtake Colombia, leaving aside the population differences?
The Colombian economy is bigger than the Peruvian one, but the gap has closed significantly…Per capita annual beer consumption in Colombia is 44 liters, and in Peru it is 45 already. But those levels are low compared to other countries, like Mexico, where it is 60 liters, or Germany, which consumes almost 120 liters.
Do you think Peru could overtake Colombia at some point?
That’s hard to say, though I hope Colombia keeps growing. Maybe Peru needs to diversify its economy and not base itself on natural resource. That’s not a criticism. Peru has done well, and it’s one of our best markets.
What’s the next step for [SAB Miller in] our country?
The next step will be to keep growing. There will be new brands, new presentation and packaging. Our goal as a global business is that the consumer has the best image possible our company, and that the beer industry is well thought-of and appreciated as an important economic player.
We also want to be seen as a responsible corporation that contributes to the development of the country. We want beer to beer to have a better image than other alcoholic drinks, and that the consumers choose our products. It will be a long process.
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