Megan Fox Joins Ambev in 007-Playboy Beer Duel in Brazil

Cia. de Bebidas das Americas is casting Megan Fox against James Bond and Playboy to boost beer sales amid slowing consumption in its Brazilian home market.

Latin Americas largest brewer, known as Ambev, hired the U.S. actress as a celebrity spokeswoman at Brazils Carnival next month. She will go up against Tokyo-based Kirin Holdings Co. (2503)s Playboy-branded brew and Heineken NV (HEIA)s Heineken, which is being pushed by 007 actor Daniel Craig.

Premium brands such as Budweiser are pivotal for Sao Paulo- based Ambev amid a stagnant local market and a loss of global share for parent Anheuser-Busch InBev NV. (ABI) Budweiser has won 11.5 percent of Brazils premium-beer sales since its mid-2011 debut, bolstering revenue and helping Ambev post the best five-year annualized total return among beverage-industry peers.

They are the dominating player, said Daniel Isidori, who manages Threadneedle Asset Management Ltd.s Threadneedle Latin America Fund, which owns an undisclosed Ambev stake and had assets of 855.9 million pounds ($1.35 billion) as of Dec. 31. They are the most active of the companies regarding marketing and also they are price leaders.

Brazil accounted for 58 percent of Ambevs 22.7 billion reais ($11.4 billion) in global beer revenue in 2011, according to data compiled by Bloomberg. Beer was the biggest portion of the companys 27.1 billion reais in sales.

Market Dominance

Ambev has a 70 percent share of Brazils beer market, the worlds third-biggest, with 10 percent each for Kirin and closely held Grupo Petropolis and 9 percent for Heineken, according to London-based researcher Mintel Group Ltd.

Lauren Torres, an HSBC Holdings Plc analyst in New York, estimates that Ambevs domestic market share has stayed in a range of 68 percent to 70 percent since 2008. AB InBev, the worlds largest brewer, saw its global share drop to 18.2 percent in 2011 from 19.9 percent in 2008, based on data compiled by Bloomberg. Ambevs local dominance makes premium sales a priority, Torres said.

To get from 70 to 80 or 90 percent is harder, she said. Its more important to make more money than just to sell more beer.

Ambevs 2012 revenue probably rose 16 percent to 31.5 billion reais, the average estimate of 15 analysts surveyed by Bloomberg. That compares with a projected 1.8 percent gain for Leuven, Belgium-based AB InBev to $39.7 billion, based on 31 projections.

Ambevs Returns

The five-year annu! alized to! tal return for Ambev was 35 percent, the most among 16 beverage producers, based on data compiled by Bloomberg. The shares rose 45 percent in the 12 months ended yesterday to 92.57 reais, compared with a 4.1 percent drop in the benchmark Bovespa index. AB InBev climbed 48 percent in the same period.

Tatiana Katibian, a spokeswoman for Ambev, didnt return telephone and e-mail requests for comment.

While premium brands make up 20 percent of sales in the U.S., the worlds biggest beer market, they account for only 5 percent of consumption in Brazil, according to an Ambev presentation to investors. The segment probably will grow 1 percent a year, HSBCs Torres estimated.

That would match the pace of expansion in Brazils broader beer market, based on estimates from Ambev and Mintel Group. Growth in per capita consumption fell to 2 percent in 2011 from 7.6 percent a year earlier, and probably slid further to 1 percent in 2012, the firm estimated.

Profit Pillar

With beer sales growth likely to run at about the same pace, premium brands are one of the primary pillars of profitability for the next few years, said Lucas Marangoni, a Mintel Group analyst. With the increase in purchasing power of the Brazilian consumer and greater maturity in relation to the differences between beers, the trend is that the movement is accentuated and Brazilians start to spend more on premium beers.

The challenge for Ambev and its premium-brand rivals is a slowing economy. Growth in Brazil! s gross domestic product probably slid to 1 percent in 2012, based on data compiled by Bloomberg, from 2.7 percent in 2011 and 7.5 percent a year earlier. GDP expansion may run at a 3.5 percent rate in 2013.

The Brazilian consumer will continue to consume more, but not on the same scale as previously seen, Marangoni said.

Fox, who starred in Hollywoods Transformers movie series, will have company in the celebrity marketplace when she appears for Ambev at Rio de Janeiros Sambadrome parade grounds, the heart of the Carnival celebration. The festivities precede the start of Lent, which begins with Ash Wednesday on Feb. 13.

Celebrity Endorsers

Kirins Devassa Playboy brand -- Devassa means depraved in Portuguese, and Playboy is a tie-in to the U.S. mens magazine -- hired local actress Alinne Moraes as an endorser after spending 100 million reais in 2010 to promote its blond beer, Devassa Bem Loura, with the help of hotel heiress and socialite Paris Hilton. Heinekens TV commercials include appearances by Craig, the latest actor to portray the James Bond Agent 007 character.

Simone Grazielle, a spokeswoman for Kirin, declined to comment for this story, as did John-Paul Schuirink, a spokesman at Heineken, which entered the Brazilian market in 2010.

The brewers are looking to trade up consumers to premium brands with increased marketing and brand promotions, HSBCs Torres said in a written response to questions. The Brazilian consumer has increasing disposable income and a growing interest in branded/aspirational products.

Ambevs size and its array of brands in Brazil gives it an advantage in trying to boost premium sales, Isidori, the Threadneedle fund manager, said in a telephone interview from London.

Its very difficult to compete with a company that has presence for quite some time that has very well-known brands and is very active in marketing, he said.

To contact the reporter on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Jessica Brice at jbrice1@bloomberg.net