Craft Beer in Chile - 2025 Market Summary
KEY DATA FINDINGS
Total volume sales decrease by 4% in 2024 to 1.2 billion litres
Non/low alcohol beer is the best performing category in 2024, with total volume sales increasing by 11% to 18 million litres
Cía Cervecerías Unidas SA is the leading player in 2024, with a total volume share of 58%
Total volume sales are set to rise at a CAGR of 3% over the forecast period to 1.3 billion litres
2024 DEVELOPMENTS
Mid-priced lager struggles due to strong price increases and lack of liquidity in the chilean economy
Beer in Chile maintained total volume decline in 2024, with sales falling both on-trade and off-trade. Mid-priced lager encountered a notable total volume decline, which can be attributed to a confluence of factors, chiefly revolving around robust price increases and a paucity of liquidity within the national economy. As the Chilean economy grappled with challenges such as inflationary pressures and economic uncertainty, many consumers found themselves constrained by reduced purchasing power. Consumers of mid-priced lager were particularly vulnerable in this economic climate. As prices surged, consumers, especially those in the middle- to lower-income bracket, recalibrated their spending priorities, often opting for more affordable alternatives. This shift in consumer behaviour manifested as lower demand for mid-priced products, causing a perceptible fall in total volume sales.
Moreover, the lack of liquidity in the Chilean economy compared with 2021 exacerbated the challenges faced by mid-priced beer brands. With limited disposable incomes, consumers become more discerning in their spending choices, opting for necessities over luxury items. This financial restraint directly impacted sales of mid-priced lager, as lower-income consumers curtailed their indulgence on non-essential and higher-priced beverages. In addition, reduced liquidity posed challenges for distributors and retailers, leading to a bottleneck in the supply chain and further impeding the accessibility of such products to the consumer base. Meanwhile, higher-income consumers were not as affected by price rises, and continued to purchase premium lager, driving slight total volume growth in this price segment in 2024, while economy lager saw a dramatic total volume increase as consumers traded down.
In summary, the decline in sales of mid-priced lager in Chile can be attributed to the intertwining factors of escalating prices and an economic landscape marked by constrained liquidity. Navigating this intricate scenario will require a nuanced understanding of consumer behaviour, economic indicators, and strategic adaptations by industry stakeholders to weather the challenges and reinvigorate this segment in the Chilean market.
Non alcoholic beer is a growth driver
The health and wellness trend has become a driving force in many consumers’ choices, and this phenomenon is particularly evident in beer, with a notable surge in the popularity of non alcoholic beer. As many consumers increasingly prioritise a healthier lifestyle, demand for beers that align with these goals has risen, positioning non alcoholic beer as a main growth driver in the category. Non alcoholic beers offer a compelling alternative for individuals seeking a healthier option without sacrificing the social and sensory aspects associated with traditional beer consumption. These brews cater to a diverse audience, including fitness enthusiasts, health-conscious individuals, and those who prefer to avoid alcohol for various reasons.
One key factor contributing to the prominence of non alcoholic beer is consumers’ growing awareness of the adverse health effects associated with excessive alcohol consumption. Consumers are becoming more mindful of the impact of alcohol on their overall wellbeing, leading to a shift towards moderation and alternatives. Non alcoholic beers, with their lower calorie content and absence of alcohol-related health risks, provide a satisfying solution for those who want to enjoy the ritual of beer consumption without the potential drawbacks.
In addition, the fitness and wellness community has played a pivotal role in driving the popularity of non alcoholic beers. Athletes and health-conscious individuals are increasingly choosing these beverages as a post-workout or socialising option, appreciating the hydration benefits and the absence of the dehydrating effects of alcohol. This shift in consumer behaviour has prompted breweries to invest in innovative and flavourful non alcoholic beer options, further broadening the appeal of this category.
Sustainability: The impact of the rep law
The implementation of the REP law has marked a significant change in the Chilean beer category, by requiring producers to have extended responsibility for the management of their products’ waste. Although the law allows producers to establish their own Individual Management Systems, the reality is that their application faces significant challenges. These systems, designed to address exceptional situations of very specific waste, imply that producers can only collect and valorise the packaging of the products they have introduced to the market. For example, a specific brewery can only manage the bottles that carry its brand, excluding those from other breweries. This limitation poses practical obstacles to the effective implementation of Individual Management Systems in beer, as the diversity of packaging in the market complicates comprehensive waste management.
In practice, this restriction presents logistical and operational challenges for breweries, as they must develop specific management systems for their own products, which can be inefficient and impractical. Furthermore, the difficulty of tracking and managing only the packaging waste of a specific brand adds complexity to the implementation of these systems.
Despite these challenges, the REP law has generated momentum towards sustainability in beer in Chile. Breweries are exploring innovative and collaborative solutions to meet the requirements of the law, while seeking to reduce their environmental impact. This transition to more sustainable practices reflects not only adaptation to the regulations, but also a proactive response to the growing expectations of consumers regarding environmental responsibility.
PROSPECTS AND OPPORTUNITIES
Functionality in beer – innovation and growth opportunities
Beer in Chile is set to return to total volume growth in the forecast period, with increases expected both on-trade and off-trade. The integration of functionality in beers represents a promising avenue for innovation and growth, presenting a potential paradigm shift in consumer preference and industry dynamics during the forecast period. As health and wellness trends continue to gain traction, incorporating functional ingredients such as probiotics, adaptogens, and vitamins into beers will cater to the growing number of health-conscious consumers. These innovations will align with the evolving lifestyle choices of individuals seeking beverages that not only offer refreshment, but also confer additional health benefits. The forecast impact of functionality in beers extends beyond consumer appeal to also influence market competitiveness. Breweries that successfully introduce functional elements into their products stand to differentiate themselves in a crowded market, potentially gaining a competitive edge. The demand for functional beers could drive a surge in research and development initiatives as breweries explore new formulations and brewing techniques to enhance the nutritional profile of their products.
However, challenges may arise in terms of consumer acceptance and regulatory considerations. Educating consumers about the benefits of functional ingredients in beers and navigating regulatory frameworks will be critical for successful market adoption. Players in beer, with their established brewing expertise, are poised to leverage this trend to redefine beer and appeal to a more diverse and health-conscious consumer demographic.
In summary, the incorporation of functionality in beers represents an innovative growth opportunity for players in beer in Chile during the forecast period. By addressing evolving consumer preferences and fostering collaboration, breweries have the potential to not only enhance their standing, but also contribute to the overall diversification and vitality of the beer category in Chile.
Packaging similarity between alcoholic and non alcoholic beers
In the forecast period, beer in Chile is poised to witness a significant impact from the growing trend of packaging similarity between alcoholic and non alcoholic beers. As consumers increasingly embrace non alcoholic beer for various reasons, including as a health-conscious choice, and due to lifestyle changes, breweries are recognising the need to align the packaging of these products with their traditional alcoholic counterparts. This strategic move is driven by the desire to eliminate the stigma associated with the consumption of non alcoholic beverages, and to make them more appealing and socially acceptable.
The packaging similarity between alcoholic and non alcoholic beers can have profound implications for consumer perception and purchasing behaviour. It facilitates a seamless transition for consumers who may be accustomed to a particular brand or style, allowing them to make choices based on taste preferences, rather than being influenced solely by packaging differences. This shift towards harmonised packaging is likely to boost the marketability of non alcoholic beers, attracting a broader consumer base that values both variety and health-conscious options.
In addition, the convergence in packaging may lead to increased shelf visibility and recognition for non alcoholic beer within retail environments. As these products share shelf space and visual elements with their alcoholic counterparts, they will become more integrated into the overall beer category, potentially fostering a positive impact on sales and share.
In summary, the trend of packaging similarity between alcoholic and non alcoholic beers in Chile represents a significant factor that is likely to shape consumer behaviour and growth dynamics moving forward. This strategic alignment has the potential to enhance the presence of non alcoholic beers, providing consumers with a more inclusive and diverse range of choices within the broader beer category.
Innovation will continue to be a fundamental factor in the performance of premium beer
In the foreseeable future, innovation is poised to remain a cornerstone in shaping the performance of premium beer within the alcoholic drinks landscape. Premium beer, characterised by an emphasis on quality, unique flavour profiles, and often higher price points, operates within a dynamic consumer environment where preferences and expectations are in a constant state of flux. To maintain and enhance their market standing, producers of premium beer must embrace innovation across various facets of their offerings.
Flavour innovation stands out as a pivotal driver of interest, as consumers are increasingly seeking diverse and novel taste experiences. Breweries that invest in experimenting with unique ingredients, brewing techniques, and flavour combinations are likely to capture the attention of discerning consumers who value sophistication and distinctiveness in their beer choices. Craftsmanship and authenticity are paramount, and innovations in brewing processes, or the introduction of rare and exotic ingredients, can set premium beers apart from their conventional counterparts.
Furthermore, packaging innovation plays a crucial role in enhancing the premium beer experience. Unique and visually appealing packaging not only attracts consumers on the shelf, but also contributes to the overall brand image and perception. Producers of premium beer may explore eco-friendly packaging solutions, artistic label designs, or interactive elements that engage consumers and elevate the overall drinking experience.
In response to the rising demand for healthier beverage options, premium beer producers might also consider incorporating functional ingredients or developing low alcohol variants, which align with evolving consumer lifestyles. This strategic innovation aligns with the broader trends in alcoholic drinks, addressing health-conscious consumer preferences without compromising on the premium quality associated with these beers.
Overall, the evolving nature of consumer preference, coupled with the competitive dynamics of the beer category, underscore the continued importance of innovation for premium beer. Breweries that proactively embrace and drive innovation in flavour, packaging, and product attributes are well-positioned not only to meet changing consumer expectations, but also to thrive in a market that places a premium on uniqueness and excellence.
CATEGORY BACKGROUND
Lager price band methodology
Báltica continued to be the best-selling economy lager in Chile, which is in the upper limit of the economy price band, followed by Dorada. Within mid-priced lager, Escudo and Cristal (both from Cía Cervecerías Unidas SA) continued to dominate in 2024, although they also lost further share of total volume sales amidst downtrading to the economy segment. Despite losing share, domestic brand Royal Guard continued to lead premium lager, while imported brands Corona Extra, Heineken and Budweiser followed.
