Brazil Jungle Berry Drink Targets the WorldIndians in the Amazon jungle for generations have chewed the guarana berry for an energy boost with three times the kick of coffee.
Deep in the world's largest jungle lurks a small berry that Brazil hopes to use as its secret weapon to shake up the world's soft drink market.
Indians in the Amazon jungle for generations have chewed the guarana berry for an energy boost with three times the kick of coffee. Now beverage company AmBev wants to tap the natural stimulant and sell a fruity pink drink of that name worldwide.
Taking full advantage of guarana's jungle allure, the company hopes its "Brazilian Rain Forest Original," a favorite national soft drink in Brazil for decades, can ride on a wave of rising global demand for "new age" soft drinks.
"We have always had a dream to export Guarana abroad," said AmBev co-president Victorio De Marchi. "Our objective is to transform this into a business."
Brahma and Antarctica, Brazil's two leading beverage companies, won approval to merge at the end of March, paving the way for the launch of Guarana worldwide with the creation of AmBev — the world's fifth largest drinks company.No 'jungle boogie'Guarana in powder form has long been used by Brazil's carnival revelers to keep them awake through the all-night Samba frenzy, but the soda pop is unlikely to make you do the "Jungle Boogie" because of its low natural guarana content.
AmBev officials say upping the guarana content in the drink would make it too strong for kids so it is made with a mix of other citrus fruits to give it a fruity, natural flavor.
Under a deal struck in October, Pepsi will distribute and bottle Antarctica Guarana, Brazil's leading guarana brand and the biggest competitor to Coca-Cola Co. in Latin America's biggest country.
AmBev officials say Coke is worried about the Pepsi-Guarana alliance, so much so that it lobbied intensely behind the scenes to stop the AmBev merger. AmBev says Coca-Cola tried to buy Antarctica's Guarana brand some years ago but was snubbed.
Coca-Cola, which now sells smaller, rival guarana brands in Brazil, has not commented on AmBev's claims. But analysts said Coca-Cola has no reason to worry. Even AmBev's goal to double sales of its Guarana would represent only 1 percent of the global $70 billion soft drinks market.
"They are not going to take over the world with one flavor. It's a flavor that Pepsi will have in its portfolio that can take a bite of the market where it can," said Marco Bera, head of Latin American consumer goods research at Deutsche Bank in New York.
There are already small sales of guarana abroad in places such as Portugal and Japan. AmBev officials have not said which markets they are targeting now. but, judging by its record, it clearly wants to knock Coca-Cola off its pedestal.
In the very acrimonious and public argument between opponents and supporters of the AmBev merger, AmBev consistently sniped at Coca-Cola.
Only competitor to Coke
"Guarana is the only drink in Brazil that has the potential of competing with Coke in Brazil," said Valmir Ferrari, who is in charge of AmBev's guarana plantation in the Amazon.
The fact is that the guarana flavor has made huge strides in the domestic soft drink market in recent years, from a 19 percent share in 1993 to 30 percent last year. Colas have fallen to 41 percent from 49 percent in the same period.
But Coke alone still has about 50 percent of Brazil's soft drinks market. That market share is very important to any company in Brazil, the world's third largest soft drinks market with 165 million people who can chose to quench their thirst from the tropical heat with a wide variety of cooling options.
AmBev officials are hopeful they can not only capture more of the domestic market but take the world by storm with the company's newfound post-merger clout as Brazil's first home-grown multinational.
AmBev co-president Marcelo Telles, former head of Brahma, said he wants its Guarana to have the same impact in changing consumer habits that Mexico's Corona Extra beer has had on beer drinkers in the United States, where Corona Extra has become the biggest-selling foreign brew.
The clear-bottled beer has won widespread appeal with trendy urbanites. AmBev's bottles are emerald green but it hopes to stun the world in the same way, using a heavy dose of the tropical, medicinal and ecological appeal of the guarana berry used to make the soda pop.
Plantation deep in massive amazon jungle
More than 12 hours by boat from the nearest city, AmBev's Santa Helena guarana plantation sits isolated on the banks of the huge Amazon River in one of the wettest places on Earth.
It is in the settlement of Maues, or "Land of the Talking Parrots," as it is called by Amazon Indians. The plantation supplies guarana extract, which is shipped in concentrate to regional capital Manaus for the drink's production.
The guarana berry is one of the thousands of plant species found in the Amazon — home to roughly 50 percent of the world's biodiversity. The continuous forest in the globe's largest tropical jungle is more than twice the size of France.Maues is a settlement of 40,000 people steeped in guarana folklore, which has been fed by the red berry's likeness to the human eye. There is even a local story that guarana revived dying lovers in an Amazon variant of Romeo and Juliet.Apart from production and marketing tales, the Santa Helena farm has another important role as a research center to produce tougher strains of the guarana bush. That will be a key to raising production if export demand really takes off.
Despite Maues being thousands of miles from key markets, AmBev vows to keep all its production there because the Amazon guarana berry is enriched by the jungle humidity, giving the drink its distinctive taste. Antarctica has made Guarana with the raw product from the Amazon since the 1920s.
Brazilians know the taste well but foreigners struggle to describe the flavor of the fruity, pinkish-orange drink. PepsiCo chief Steve Reinemund called it "refreshing, exciting and light-tasting," but added that it is so unusual that "it's hard to compare to any other product."
A foreign diplomat in Brasilia agreed: "Oh god, what do you compare it to? But if you take advantage of the pick-me-up element I think it could sell abroad."