About Ambev

Ambev S.A. operates as a brewer in Latin America. The company produces, distributes and sells beer, CSDs, other alcoholic beverages and non-alcoholic and non-carbonated products in 18 countries across the Americas. The company conducts the bulk of its’s operations in Brazil directly. The company also indirectly controls Labatt and the operations conducted by the company’s CAC and Latin America South units. Segments The company operates through the following four business segments: Brazil segment includes the beer sales division and the NAB sales division. Central America and the Caribbean (CAC) segment includes the company’s direct operations in the Dominican Republic, Saint Vincent, Antigua, Dominica, Cuba, Guatemala (which also serves El Salvador, Honduras and Nicaragua), Barbados and Panama. Latin America South (LAS) segment includes the company’s operations in Argentina, Bolivia, Paraguay, Uruguay and Chile. Canada segment, represented by Labatt’s operations, includes domestic sales in Canada and some exports to the U.S. market. Business Strategy The main components of the company’s business strategy include strategic pillars, quality of the company’s products, and sustainability. The company focuses its efforts behind the following strategic pillars to lead and grow the category, digitize and monetize the company’s ecosystem, as well as optimize the company’s business: Brands for each and everyone: Building brands that are recognized by the company’s clients and consumers. The company wants its brands to be connected with consumers, and the company’s products to the consumed in important moments of their lives. Thirst to lead the future: Expanding the company’s beverages and assortment, going beyond the beer category and including expansion into categories, such as RTDs, canned cocktails and seltzers. A toast to the company’s clients’ success: Improving service level and leveraging technology to solve business customers’ issues that allow them to grow their business in partnership with the company. Experiences that come to you: Keeping the consumer at the center of the company’s decision-making process. Through innovation and technology, the company wants to connect with and bring the best experiences and convenience to the company’s consumers. Together for a Better World: Generating a positive impact in the world and grow together with the company’s ecosystem, which goes from the company’s farmers to its consumers. The company brews a wide variety of beers, including ales, lagers, clear, dark and full-bodied beers, amongst others, offering consumers a unique set of high-quality beers designed to satisfy different needs and tastes across different occasions. The company also produces a number of non-alcoholic products, such as soft drinks, energy drinks and juices. The quality of the company’s products is at the forefront of the company’s priorities. The company has strict processes, with more than 1,300 controls and more than 370 tests across the company’s production lines, as the company intends to provide to its consumers products matching the highest possible standards. The company’s R&D team is also constantly working to enhance the company’s production process and the quality of its products. Seasonality Sales of beverages in the company’s markets are seasonal. Generally, sales are stronger during the summer and major holidays. Therefore, in the Southern Hemisphere (Brazil, Central America and the Caribbean and Latin America South) volumes are usually stronger in the fourth calendar quarter (year ended December 2022) due to early summer and year-end festivities. In Canada, volumes are stronger in the second and third calendar quarters due to the summer season. Markets Brazil Brazil Beer In 2022, the company was the market leader of the Brazilian market in terms of beer sales volumes, mainly through the company’s three major families of brands: Skol, Brahma and Antarctica. The company’s closest competitors in Brazil are Heineken, particularly following its May 2017 acquisition of Brasil Kirin operations, and Cervejaria Petrópolis. The company’s distribution is structured under two separate branches, comprising the company’s network of exclusive third-party distributors, involving 146 operations; and the company’s proprietary direct distribution system, involving 106 distribution centers located across most Brazilian regions. The company has been focusing on direct distribution in large urban regions, while strengthening the company’s third-party distribution system. Future Beverages Some of the company’s products stretch beyond typical beer consumption occasions, such as the Beats family of beverages and Mike’s, which are designed for new occasions and consumer groups in which beer is not present, Brahma 0.0%, a non-alcoholic beer, which is the leader in the Brazilian non-alcoholic beer segment, and Budweiser Zero, one of the company’s most recent launches. The company’s Nutrl portfolio and Mike’s in Canada and Dante Robino wines in Argentina add to the company’s wide portfolio of future beverages, a market that the company have been assessing in different regions and countries. Brazil NAB The Brazilian NAB Markets The CSD segment is the most significant to the company’s business representing approximately 94% of the volumes of the company’s NAB unit. According to the company’s estimates, the leading CSD flavors in Brazil are cola (with 54.7% of the market in 2022), guaraná, orange, and lime. Most CSDs in Brazil are sold in supermarkets in two-liter and one-liter non-returnable PET bottles for in-home consumption. The 350-milliliter one-way aluminum can is also an important packaging format for the company’s business and is mainly sold in off-trade (e.g. supermarkets) and on-trade (e.g. bars and restaurants) channels. The company’s main competitor in this market is The Coca-Cola Company. The company’s main CSD brands are Guaraná Antarctica, the leader in the ‘non-cola’ flavor segment, and Pepsi Cola. Pepsi Cola is sold under the company’s exclusive production and bottling agreements with PepsiCo. The company’s NAB portfolio also includes brands, such as Gatorade in the isotonic market, H2OH! in the non-sugar CSD market, and Lipton Iced Tea in the ready-to-drink tea market, which are also sold under license from PepsiCo, and, in the energy drink segment, Fusion, a proprietary brand, and Red Bull, which is sold under an exclusive distribution agreement. Since 2016, when the company acquired the Brazilian juice company ‘Do Bem’, the brand has been integrated to the company’s portfolio, improving the company’s value proposition in health and wellness categories. In 2022, Pepsi Black was responsible for increasing the company’s presence in the diet/light/zero segment, and the company has continued to invest in lowering the sugar content in its portfolio, as well as offering different pack sizes for specific consumption occasions, such as the Fusion 500-milliliter PET for the gaming community. CAC (Central America and the Caribbean) Central America The company’s main competitor in Guatemala is Cerveceria Centro Americana, the market leader, which is a private company owned by local investors. In El Salvador, Honduras and Nicaragua, the company is selling imported brands, and the company’s main packaging presentation is the returnable one-liter glass bottle. Specifically in Nicaragua, the company’s main competitor is Compañía Cervecera de Nicaragua, the market leader, which is a joint venture between Guatemala’s Cerveceria Centro Americana and Florida Ice & Farm Co, an investor group from Costa Rica. The company sells its Brahva, Budweiser, Bud Light, Stella Artois, Corona, Modelo Especial, Beck, Leffe and Hoegaarden beer brands in Central America, which are distributed through the CBC distribution system, jointly with CBC’s CSD portfolio. In May 2016, the company entered into an agreement with ABI pursuant to which the company agreed to transfer to ABI the company’s businesses in Colombia, Peru and Ecuador. In exchange, ABI has agreed to transfer SAB’s Panamanian business to the company. The company formally began operations in Panama on December 31, 2016. According to the company’s estimates, the company leads the beer market in Panama. The main packaging presentations are 285-milliliter bottles and 355-milliliter cans and the company’s main beer brands in Panama are Atlas Golden Light and Balboa Ice. The main competitor in the Panamanian beer market is Baru. According to the company’s estimates, the total annual sales volume of the Panamanian beer market was 3.7 million hectoliters in 2022. The company’s Panamanian business also produces and commercializes soft drinks, under franchise, being Pepsi, Canada Dry and Squirt the main brands distributed. In Panama, the annual sales volume of the CSD market was 1.3 million hectoliters in 2022. The Caribbean Beer Market In Cuba, the company’s main packaging presentation is the 12-ounce can. The company’s main competitor in Cuba is State Brewery. The company sells the Bucanero, Cristal and Mayabe local beer brands in Cuba. In the Dominican Republic, the annual sales volume of the beer market was 4.7 million hectoliters in 2022. The main packaging presentation in the Dominican beer market consists of the returnable 650-milliliter and 1-liter glass bottles, which are predominantly sold in small retail stores. The company leads the beer market in the Dominican Republic after the company’s acquisition of CND, with a leading portfolio of brands, such as Presidente, Presidente Light, Brahma Light, Bohemia, The One, Corona, Modelo Especial, Stella Artois and Budweiser. The company’s distribution system in the Dominican Republic comprised mainly direct distribution operations. In Barbados, the annual sales volume of the beer market was 0.1 million hectoliters in 2022. The company is the market leader in terms of sales volume with brands, such as Banks and Deputy, which are produced locally by BHL. The main packaging presentation in Barbados is the 250-milliliter and 275-milliliter returnable glass bottles. The Caribbean CSD Market The main packaging presentation in the Dominican CSD market is the returnable half-liter bottle, in either glass or PET format, which is predominantly sold in small retail stores. Ajegroup, which adopts a low-price strategy has the leadership of the Dominican CSD Market, followed by The Coca-Cola Company, represented by Bepensa. The company’s main CSD brands in the Dominican Republic are Red Rock, Pepsi-Cola and Seven Up, all of which are marketed under an exclusive bottling agreement with PepsiCo. The company’s distribution system in the Dominican Republic comprised direct distribution operations and third-party distributors. Latin America South Argentina Argentina is one of the company’s most important regions, second only to Brazil in terms of volume. The company serves more than 300 thousand points of sale throughout Argentina both directly and through the company’s exclusive third-party distributors. The Argentine Beer Market In Argentina, 37% of the company’s beer volume is distributed directly by the company and 63% is distributed through exclusive third-party distributors. The company’s main package presentation in Argentina is the 1-liter returnable glass bottles, which accounted for 54% of its sales in 2022. The company’s most important beer brands in Argentina are Brahma, Quilmes Clásica and Budweiser. The company is the leading beer producer in Argentina, and the company’s main competitor in Argentina is Compañía Cervecerías Unidas S.A. The Argentine CSD Market In Argentina, 49% of the company’s CSD volume is distributed directly by the company and 51% is distributed through exclusive third-party distributors. Non-returnable bottles represented 80% of the company’s CSD sales in Argentina in 2022. The company is the exclusive Pepsi bottlers in Argentina and the company’s most important CSD brands in that country are Pepsi-Cola and Seven-Up. The company is the second player in the Argentine CSD market in 2022, only after The Coca-Cola Company. Bolivia The Bolivian Beer Market In Bolivia, 49% of the company’s beer volumes is directly distributed by the company and 51% is distributed through exclusive third-party distributors. The company’s main package presentation in Bolivia is the 620-milliliter returnable glass bottle, which accounted for 43% of the company’s sales in 2022. The company’s most important beer brands in Bolivia are Paceña, Taquiña and Huari. The company is the leading beer producer in Bolivia. The Bolivian CSD Market In March 2009, the company, through Quinsa, acquired from SAB 100% of Bebidas y Aguas Gaseosas Occidente S.R.L., becoming the exclusive bottler of Pepsi in Bolivia. In 2022, the annual sales volume of the Bolivian CSD market was 10.1 million hectoliters. Of the company’s total CSD volumes in Bolivia in 2022, 87% was directly distributed by the company and 13% was distributed through exclusive third-party distributors, while all the company’s CSD sales in that country in 2022 were through non-returnable bottles. Chile The company’s most important beer brands in Chile are Corona, Budweiser, Becker, Stella Artois and Cusqueña. The company is the second beer producer in Chile. The company’s main competitor and the leader in the country is Compañía Cervecerías Unidas S.A. In 2015, the company became the exclusive distributors of the Corona brand in Chile, and since January 2016 the company also started to import and distribute Budweiser in Chile, followed by Cusqueña in 2018. Paraguay In Paraguay, 67% of the company’s beer volumes is directly distributed by the company and 33% is distributed through exclusive third-party distributors. The company’s main package presentation in Paraguay is the 940-millimeter returnable glass bottle, which accounted for 48% of the company’s sales in 2022. The company’s most important beer brands in Paraguay are Brahma, Pilsen, Skol and Ouro Fino, with a leader market position in the country in 2022, according to the company’s estimates. The company is also the exclusive distributor of the Budweiser brand in Paraguay. Uruguay The Uruguayan Beer Market The company’s Latin America South business unit manages both the beer and CSD businesses in Uruguay out of a facility based in that country. In Uruguay, 22% of the company’s beer volumes is directly distributed by the company and 78% is distributed through exclusive third-party distributors. The company’s main package presentation in Uruguay is the 1-liter returnable glass bottle, which accounted for 50.0% of the company’s sales in 2022. The company’s most important beer brands in Uruguay are Pilsen and Patricia, with a leading market position in 2022. The Uruguayan CSD Market In Uruguay, 38% of the company’s CSD volume is directly distributed by the company and 62% is distributed through exclusive third-party distributors. Non-returnable bottles accounted for 97.4% of the company’s sales in that country in 2022. The company’s most important brand in Uruguay is Pepsi-Cola, with The Coca-Cola Company being the company’s main competitor. Canada The Canadian Beer Market The company’s Canada business segment is represented by the Labatt operations, which sells domestic and ABI beer brands, a portfolio of ready-to-drink and cider brands and exports the Kokanee beer brand to the United States. According to the company’s estimates, Labatt is the market leader in the Canadian beer market. The main packaging presentations in that country are the 355-milliliter and the 473-milliliter aluminum cans, which are predominantly sold in privately owned and government-owned retail stores in addition to privately owned on-trade establishments. The company’s main competitor in Canada is Molson, but the company also competes with smaller brewers, such as Sleeman Breweries Ltd., or Sleeman, and Moosehead Breweries Ltd. The company’s main brands in Canada are Budweiser, Bud Light, Michelob Ultra and Busch (brewed and sold under license from ABI’s subsidiary, Anheuser-Busch, Inc., or Anheuser-Busch), along with Corona, Labatt Blue, Alexander Keith’s, Stella Artois and Kokanee. The company’s distribution system in Canada is structured in different ways across the country. Other Canadian Markets Labatt’s RTD portfolio in Canada includes the Nutrl, Bud Light Seltzer, Palm Bay and Mike’s brands. Distribution in Ontario In Ontario, the province with the largest beer consumption in Canada, the company owns together with other brewers a distribution and retail company incorporated in 1927 named Brewers Retail Inc., operating as The Beer Store, or TBS. In 2015, the company finalized a new Master Framework Agreement, or MFA, with the government of the Province of Ontario that specifies TBS’s role as a retailer and distributor of beer. Under the MFA, TBS continues to be the primary retailer for pack sizes larger than six bottles or cans of beer. TBS ownership is available to all qualifying Ontario-based brewers. TBS operates as a self-funding corporation on a break-even cash flow basis under which it charges volume-based fees for services it provides to the brewers. The nature of TBS’s business requires compliance with laws and regulations and oversight by the province of Ontario and its agents, the Alcohol and Gaming Commission of Ontario, or AGCO, and the LCBO. The Liquor Licencing and Control Act and its regulations are administered by the AGCO, which is an Ontario provincial regulatory agency reporting to the Ministry of the Attorney General and affiliated with the Ministry of Finance. The Province of Ontario and its agents, the AGCO and LCBO, oversee all aspects of the beverage alcohol sector. Distribution in Quebec The company (as well as its competitors) sells its products in Quebec through a direct sales and distribution system. Distribution in the Western Provinces Molson and Labatt are each a shareholder in Brewers Distributor Limited, which operates a distribution network primarily for beer in the four western provinces of British Columbia, Alberta, Manitoba and Saskatchewan, as well as three territories (Yukon, the Northwest Territories and Nunavut). In Alberta, some volume is also sold through a third-party wholesaler. In these Western Provincial markets, there are both privately controlled retail stores (such as in Alberta and British Columbia) and government-controlled retail stores (such as in British Columbia, Manitoba and Saskatchewan). Distribution in the Atlantic Provinces The company distributes and sells its products in the Atlantic Provinces (including New Brunswick, Newfoundland, Nova Scotia and Prince Edward Island) through distribution and retail networks controlled by the government in the provinces of Nova Scotia, New Brunswick and Prince Edward Island; and private distributors in Newfoundland. Suppliers Barley and Malt For the remaining malt demand, the company’s main supplier is Cooperativa Agroindustrial Agraria, located in the state of Paraná in Brazil. Concentrates The concentrate for Pepsi CSD products is purchased from PepsiCo. Juices The company’s main suppliers are Louis Dreyfus Commodities, Cutrale, Citrus Juice, Litoral Citrus and San Miguel. Packaging In Brazil, the majority of the company’s beer label requirements are met by a printing house that belongs to FAHZ and is operated by the company pursuant to a lease agreement. Marketing The company’s marketing initiatives are concentrated in off-trade and on-trade initiatives. Off-trade initiatives comprise mass media vehicles, such as television, radio, magazines and internet websites. On-trade initiatives include banners, and all types of enhancements to the point of sale, such as branded coolers and decorated furniture. Licenses Pepsi The company has a long-term agreement with PepsiCo whereby the company has been granted the exclusive right to bottle, sell and distribute certain brands of PepsiCo’s portfolio of CSDs in Brazil, including Pepsi-Cola, Gatorade, H2OH!, and Lipton Ice Tea. The company is also, through its subsidiaries, PepsiCo’s bottler for Argentina, Uruguay, Bolivia and Dominican Republic. In 2022, sales volumes of PepsiCo products represented approximately 34% of the company’s total NAB sales volumes in Brazil, 53% of the company’s total NAB sales volumes in the Dominican Republic and 96% of the company’s NAB sales volumes in Argentina, 96% in Bolivia and 99% in Uruguay. Red Bull The company has a long-term distribution agreement with Red Bull, providing for the exclusive right to sell and distribute certain brands of Red Bull’s portfolio in specific limited points of sale of the on-trade channel in Brazil. The company also has agreements with Red Bull to distribute their portfolio in a few limited channels in Argentina and the Dominican Republic. Licensing Agreements with ABI Effective January 1998, Labatt entered into long-term licensing agreements with ABI whereby Labatt was granted the exclusive right and license to manufacture, bottle, sell, distribute and market some of ABI’s brands, including the Budweiser and Bud Light brands, in Canada, including the right to use ABI’s trademarks for those purposes. The agreements expire in January 2098. In 2022, the ABI brands sold by Labatt represented approximately 58% of Labatt’s total sales volumes. The Budweiser brand is the largest selling brand, while Bud Light is the third largest selling brand, in Canada in terms of volume. The company also has a licensing agreement with ABI, which allows the company to exclusively produce, distribute and market Budweiser in Brazil. The company also has certain arrangements to sell and distribute Budweiser products in Paraguay, Guatemala, Dominican Republic, El Salvador, Nicaragua, Uruguay and Chile. Furthermore, the company has a cross-licensing agreement with ABI through which the company is allowed to produce, bottle, sell and distribute beer under the Stella Artois and Becks brands in Latin America and Canada on an exclusive basis, and ABI is allowed to produce, bottle, sell and distribute beer under the brand Brahma in Europe, Asia, Africa and the United States on an exclusive basis. Ambev has agreed not to produce directly or indirectly, bottle, distribute, sell or resell (or have an interest in any of these), any other European premium branded beer in Latin America, and ABI has agreed to be bound by the same restrictions relating to any other Latin American premium branded beer in Europe, Asia, Africa and the United States. As a result, in June 2005 the company launched Stella Artois in Brazil and, since March 2005, ABI has been distributing Brahma beer in the United States and several countries such as the United Kingdom, Spain, Sweden, Finland and Greece. In addition, the company has a licensing agreement with Grupo Modelo, S. de R.L. de C.V. (‘Cervecería Modelo’ - formerly Grupo Modelo, S.A.B. de C.V.), a subsidiary of ABI, to produce, import, promote and resell Corona products (Corona Extra, Corona Light, Coronita, Pacifico and Negra Modelo) in Latin America countries, including Brazil, as well as in Canada. The company also has a licensing agreement with Spaten-Franziskaner-Bräu GmbH, a subsidiary of ABI, to produce, promote, advertise and sell Spaten in Brazil. The company has ABI’s subsidiary, Metal Container Corporation, as one of the company’s can suppliers. History Ambev S.A. was founded in 1885. The company was incorporated in 2005.