CHEERS TO SUCCESS

Ecuador 2019 | INDUSTRY | INTERVIEW

A global company that operates as a local one, Cervecería Nacional is as close a part of Ecuador's community as it has been for 130 years.

Sergio Andrés Rincón R.
BIOGRAPHY
Sergio Andrés Rincón R. assumed his role as President in October 2016 following an extensive career in the beer industry. Before joining ABInbev, he worked for SABMiller, amongst other positions as VP sales in El Salvador and Colombia. He holds a degree in marketing from Universidad Pontificia Bolvariana and started his career as an auditor for PwC.

What are the recent trends in the market for beer consumption?

We are conducting a campaign celebrating 130 years in the country. In every country, the main beer company and its brand are part of its identity. In Ecuador, there is a connection between Pilsener and Ecuadorians. CN is an emblematic company in Ecuador, not only in terms of our size but our reach among consumers. The beer industry in Ecuador is relatively small; consumption is 32l per capita per year, compared to 45l in Peru, 48l in Colombia, 80l in Mexico, and over 100l in Europe. In Latin America, beer is associated with parties, where there is a high intensity but low frequency. Our first job is to show how one can consume beer without the bad effects, which has to do with moderation. In Ecuador, we have an opportunity to bring beer to more occasions, for example via better alignment with gastronomy. Our idea is to pair our premium brand Club with certain foods and explain that moderated consumption has health benefits. We have an opportunity to grow the entire supply chain. We have 2,000 employees, though there are over 22,000 people who depend indirectly on our business, such as suppliers, packaging, and labels. With that, we move around 1% of the GDP, and we want to work for a better Ecuador. We are part of a global company, though we operate as a local one; our plants, employees, distribution, and consumers are here. We envision being part of the community.

How do you envision broadening your portfolio in the market?

Three years ago, we were concentrated on Pilsener, which was not sufficient, as we need segmentation to serve different markets. We took on this challenge and decided to expand our portfolio with global brands such as Corona, Stella, and Budweiser. We are currently expanding Club Premium with different varieties. This is a step-by-step process, and we do not want to have too complex flavors. The craft beer movement is great, as it brings excitement to the category and the kind of culture that we need. Together, we are all developing the market. Another differentiation is in packaging; we are currently the only company with cans in the country. We are currently bringing new sizes, such as liter bottles, to the market to give lower-income consumers access to our products.

What is your primary distribution in Ecuador?

In Latin America, much of the distribution is via small retailers, and mom-and-pop stores are our main channels in Ecuador. Unfortunately, in the last five years, more than 20,000 of such stores have closed down due to the economic situation and stringent regulations. One of our best bets is to recover and rescue those stores. We have a program to bring 15,000 female owners to teach them to manage the business and give them the tools to sell in a more attractive way. We want to improve the life of the retailer, as unemployment is a problem in the country. Each retailer can employ three or four people, and if we can have 15,000 stores, we will have 60,000 people employed. Over 40% of the population in Ecuador is in rural areas, which presents an opportunity for us all, as most companies do not have extensive reach in those areas. We have invested in the last three years to go directly, as in the past 60% of our sales were indirect. Now, we have 92% direct sales and only 8% wholesale. In our sales service model in Ecuador, Colombia, and Peru, we take orders by phone. Our people in the market do not take orders but provide advice on merchandising and bring promotions to the consumer. Our commercial investment goes directly to consumers. As the only company to work this way in the region, we are now exporting this model to Mexico and Central America.