Ambev S.A. (ABEV3) Earnings Call Transcript & Summary

Good morning. Good afternoon, everyone. Welcome back to our second day of our Investors Day. I'm Yoka, I'm your host for the day again. Today -- so I hope yesterday's session was useful, insightful. Today, our day will be dedicated for our Brazil operations. Eduardo Lacerda will walk you through our strategy and how what we saw yesterday fits into it. Then he'll be followed by Danny Waks, who'll talk about our brands and portfolio strategy. Then for us here in Brazil, we're going to take a lunch break, which is about an hour and 15 minutes. When we are back from the lunch break, we're going to have Pablo Firpo talking about our NAB business, and then followed by then Dani Cachich for talking about Beyond Beer. In the end of the day, we are going to have, again, a sell-side analyst Q&A, and then we'll have a closing for the day. Thank you for being with us. Thank you for your attention. And with that, I would like to invite Edu Lacerda to the stage.

Good morning, everyone. My name is Eduardo Lacerda, and I'm the Beer Brazil President. I've been 21 years with the company and had different experience in different functions and countries. I'm very happy to be here today to share with you a little bit more of our strategy and results. And let's talk about Beer. As you have seen in yesterday presentations, our strategy relies on building a true platform and generate value to our entire ecosystem. I'll start by showing how everything you saw yesterday connects and impact our operations in Brazil. We currently have 2 unique platforms: BEES, our B2B platform; and Z�, our D2C platform. Each one was built to address critical pain points. BEES was built to let our clients order any time they want without having to wait for a sales representative visit. Z� was built to make convenience affordable and accessible so that our consumers can receive their cold beverage anywhere in less than 35 minutes at a supermarket price. And as they evolve, we are continuously exploring and adding incremental business opportunities to these 2 platforms. Differently than working as a traditional pipeline company, as a platform, we can connect and generate value to all members of our ecosystem. Let me share a video with you. [Presentation]

Imagine how many connections we will be able to create in an ecosystem that has more than 80 million consumers, 1 million customers, 11,000 suppliers and 50 industry partners. Our strong ecosystem was built throughout years based on our loved brands and a strong commercial strategy. Our brands are the most important assets we have. Being a platform also allows us to start providing services that were not part of our business before, such as financial, logistics, different types of marketplace models, and the list goes on. Let me give you an example. One of the main pinpoints of our own trade customers is their electricity bill. At the same time, Lemon, a clear energy start-up, is part of our ecosystem. So why not connect them, provide clean energy access to 1 million customers through our BEES platform. This is the power of our ecosystem. Everyone wins and grow together. Being a platform also allows us to create unique experiences to our consumers throughout -- through the integration of the on- and off-line channels, the so-called omnichannel experience. For example, why not reward our Z� Delivery consumers with benefits that could be used not only with Z�, but in any bar he or she wants to go with friends. What if you could go to a soccer match or a music festival with the points you accumulate every time you buy your favorite beer in any channel. And the beauty is that all of it is being built based on the assets we already have. We are all very excited with this journey. As I said before, our strong ecosystem was built based on our [ allev ] brands and a strong commercial strategy that has worked in 2020 and in 2021 and continues to evolve. And I will now share some highlights of 2 pillars of our commercial strategy that are key to continue driving volume growth and net revenue per hectoliter performance: portfolio and revenue management. Let's start with an overview of the beer industry. After years of stability, the frequency of beer consumption is back to growth, and we see opportunities going forward. Less mature regions in Brazil, such as Midwest, North and Northeast, still have considerably less per capita consumption than the average of the country. In addition, we still -- in parallel, we are constantly listening to our consumer needs and studying the market trends so that we can design and deliver the right product at the right pack price to the right occasion, not only to address their needs, but also surprise them. And once we do that, consumers should be willing to pay a premium for it. Our ambition is to have at least 15% to 20% of our net revenue coming from products that did not exist in the last 3 years and that have margin accretive. And since 2020, we managed to deliver it. One great example is the launch of Brahma Duplo Malte, the most successful innovation of the history of Ambev and ABI. As J.J. presented yesterday, premiumization with the needs of our consumers to have a core plus innovation that would combine quality and sophistication. Brahma Duplo Malte is a core plus innovation that delivers on quality due to a 2-malt combination with higher protein retention that makes it creamier and with the perfect foam, and sophistication due to its premium packs and superior recipe. By 2021, Brahma Duplo Malte reached the #1 position in the core plus segments. Using the same principle of looking to market trends and listening to our consumer needs, we launched Spaten last year. Spaten is one of the first pure malt liquids in the world and the official host of the Oktoberfest in Munich. First results are very promising, and we are confident in its success. In the high-end segment, our strategy is to build brand power ahead of share. And we have been doing that with many of our brands. Danny, our marketing VP, will get into more details about our portfolio strategy during his presentation. Let's now move into revenue management pillar. Our net revenue per hectoliter grew below inflation between 2019 and '21. The reason for the gap was that we needed to adjust a structural issue. The price relativity between our packs and channels was not ideal. By 2019, the price of our RGB portfolio was almost 10% more expensive than one-way, which led to a cross-channel problem. Our own trade box were buying more and more one-way products directly from key accounts in cash and carry. Between 2015 and '19, our one-way pack grew 11 percentage point weight in the on-trade channel. At the same time, the RGB packs lost 14 percentage point weight in our total volume. So it had to be adjusted, not only because our sales reps were losing relevance with the on-trade box that were buying from key accounts and cash and carry cheaper than they could buy RGB with us, but also because it was generating a negative mix impact in our profitability and share. In 2020, we started to review our entire price tree. To do so, we took into consideration a number of inputs, consumer needs, the role of each brand in our portfolio, and channel and pack relativities. By the end of 2021, we reached a much better balanced relativity. As a consequence, RGB packs reverted the negative trend and started to gain weight in our total volume. We also managed to significantly increase the weight of the on-trade channel despite the negative impact of COVID. The rebalance of our price tree was also key for our digital transformation. With the implementation of this, the on-trade box started to have full visibility of our prices, and we had to make sure they would have more competitive prices with us than buying from a new key account or cash and carry store. With that, not only our sales reps regained relevance with the on-trade box, but we also managed to increase by 150,000 the number of the on-trade buyers in the last 2 years. In summary, the price tree review was a must do. It was the reason our net revenue per hectoliter grew below inflation between '19 and '21, and we are confident that it was the right call and it is done. RGB and on-trade continue to be more profitable than one-way and off-trade, respectively, and we are back to growth. Let's now talk about opportunities within RGB. We have 3 different RGB bottles, and each one has a specific role in our portfolio. [indiscernible] the 300 ml bottle is our biggest stronghold. It addresses affordability through out of pack and has been key in helping us to increase in-home occasion, which is one of our biggest growth opportunities. In the 600 ml and one liter bottles, our focus is on premiumization. We launched Buds in 3 green bottles in 600 ml, Stella, Spaten and Beck's. In 1-liter bottle, we launched Buds and Brahma Duplo Malte. We are very confident that the new bottles will be a game changer for us. I'll now close with our off-trade strategy. When we look at some developed markets, we see that consumers buy packs of different sizes to serve different occasions. But here in Brazil, we are very concentrated in the 12-pack. And therefore, we have many opportunities to address different needs. For example, smaller packs for small volume, last-minute occasions and bigger packs focused on volume stock-up. As a consequence of our commercial strategy, we reached all-time high volumes in 2021. And as I said before, we are very excited about results so far. I am confident that consistent execution of our strategy -- commercial strategy should continue to drive top line growth going forward. Our journey towards the platform has just started, and I had never been so confident in our future as I am now. Thank you all very much, and I'll invite Danny to get into more details about our portfolio strategy.

Good morning, good afternoon. Very, very nice to be here with you guys. Let's see if my charts are coming. But I'll start by introducing myself. So I've been in the company for 15 years. I'm Daniel. I run marketing here, I'm the marketing VP. And in my career, I've done most of it in the marketing function. That's always something that I've always loved, but I've also been responsible for the ZX operations. So I was one of the first ZX employees back on the early days of ZX. So I stayed 2 years in Brazil, running ZX. Participated in our -- all our consolidations together with Colorado, involve the partnership we did with the craft beers in Brazil. And then I did the same in Europe. So I was in ZX based in London for 2 years. And then afterwards, I went to New York to run marketing globally. So most of my career in this 15 years of Ambev as marketing, but also 4 years running a small business in ZX. Let's see if my slides go. Okay. So this is what I just said. And I think the -- as Lucas alluded yesterday to show people as a metaphor for his own vision for the company. I also have a metaphor with Brahma. So one of the highlights of my career was when I was in Brazil back in 2014, running Brahma for the World Cup in Brazil. It was a very, very interesting time. And today, I'm lucky enough to be responsible for, among other things, Brahma Duplo Malte, which Edu already said, one of the biggest innovations of the history of our company, but also, on the meanwhile, being responsible for amazing brands. I'm very passionate about brands. I'm very passionate about our portfolio and the quality of our beers, and that's what I wanted to share with you guys today. So this is our flywheel. And I like to think that marketing is more involved in 3 of those 5 elements of the flywheel. So yesterday, we saw -- you guys saw the presentation of Stella and Paula talking about draftLine and all the experiences, right? So positioning draftLine as the tool for transforming our marketing and getting deep consumer understanding to be able to move at the speed of culture. And I think one of the questions Laboy asked was, how do you use those data -- that data to really build brands. And I think draftLine is very important to get us out of being self-centered to listen to consumers and be able to be relevant in culture. But there's another element of this axis that I wanted to cover today, which is it's not enough to be relevant. You also have to have strategically positioned brands with a very clear purpose. So the space we want to occupy with our brands is a space which is relevant for consumers, but of course, consistent to our brand strategy, and that's what I wanted to talk today. So my presentation today will cover brands and innovation, mostly about our beer brands. And I like to consider that marketing, although a lot of people think that marketing is mostly art, I really think that marketing is a combination of art, science and discipline. And the way I've structured the presentation today is on those 3 topics, right? So I'm going to start talking a little bit, why do we need a portfolio and how do we build it? So why it is important on the science? Then of course, there's art, right? Marketing has talked a little bit about the art. So talking about what J.J. alluded yesterday, transforming consumers into levers, that's our art. But I'd like to close talking a little bit about the discipline of innovation. So these are the 3 topics that I have to share with you guys today. So let's start with portfolio. I think there are 3 elements that make a case of why we need a portfolio and not bet all our bets in one brand. Three elements that I'd like to cover here. The first one is what Edu was showing, that the market is premiumizing, right? So what's happening to the Brazilian market in 3 years, this is very short term, it changed massively. We went from a 61% of the volume in core to 48%. And what happened is that core and high-end more than doubled its participation in the total market. So we went from 15% to 33% of the market in 3 years. It's a massive tectonic change, and this alludes to why you have to have a balanced portfolio. The second reason is, as markets mature, some interesting things happen. So here I have some countries and more low maturity on the beer landscape and high maturity, so from Colombia to U.K. And what happens is as market matures, you need more brands to get to 80% share. So in Brazil and Colombia is 7 and 14. But as we get to Canada, U.K., you need 38 brands to get to 80% of share, a phenomenon we call fragmentation. So the market gets more fragmented. On top of that, what happens to the brand power is that it dilutes. So in Colombia and Brazil, the top 3 brands from a brand power perspective have almost half of the total brand power of the market. As you get more mature, you get closer to 1/4 or 1/5 of that brand power. So this is what we call fragmentation. So more brands needed to get to 80% of share and dilution, the most important brands of the market, they lose their representative power -- brand power of the market. And because of that, we come to our third point, right, which is because of that, consumers increase their repertoire. So even in Brazil, we start to need 14 brands to get to 80% of share. Used to be 9 a couple of years ago. So consumers are getting more repertoire of brands, putting more brands in their basket, thinking about more brands. And when it comes to premium, that gets even more fragmented. So relevant premium brands in the market in Brazil, you have 14 brands with more than 0.5% share; in the U.K. have 31. So my case here is we really believe that we need to be a portfolio company. We really believe that as the market matures, as we go forward, we cannot put all our eggs in one basket. We cannot put all our eggs in one brand, right? We need to have a diverse portfolio. The good news is that we have that. We have amazing brands, and these are not all our brands, it's some of our brands. We have an amazing portfolio. But then the challenge becomes, how do you allocate resources properly? It's not easy, right? And sometimes, we face a dilemma that I think is a false dilemma. You are either on the right side of the spectrum and you have one brand and you put all your energy into one brand, or you are a portfolio company, and you're diluting to a lot of small bets. Well, we refuse that dilemma. The strategy that we have, the thought that we have as a group here is that we want to be in the middle. We want for sure to have strong bets to make sure that we are making choices and reallocating resources properly, but we have to have a complete portfolio because the market changes very fast, right? So this is the case that we're making for the strategy of portfolio that we have. And the way we like to explain how do we make those captains per mission, so this is a matrix where we have the 4 different price tiers of the market, beer market and then the different profiles of liquid, have more balanced, more easy drinking beers and more bitter, more striking flavor beer. And we like to consider that we have 4 very important missions. These are the 4 missions that we have, and the thesis that we have is we need to have a clear captain per each of these missions. So to lead the core and core plus we have one brand, which is Brahma. And of course, Brahma Duplo Malte, that's the master brand, Brahma, I'm going to talk about that. But we also need another brand on the striking flavor for core plus to be a reference in the core plus segment, and that's where we put Spaten. On top of that, market is premiumizing. So we need someone to recruit people to the premium segment. And we think Budweiser is an amazing brand to do that. And lastly, to make sure we have some bets on the future of high end on the tomorrow, we have Beck's. And these are the 4 brands -- there are 5 here because Brahma Duplo Malte is Brahma. We have 4 bets, and we're calling them the Bs, right? Brahma, Buds, Beck's, BBB and Spaten, the Bs, right? That's how we're calling them. And that's how we allocate the resource, therefore. So we have our Bs, which are our main priorities, the 5 logos you see on top. And again, an amazing portfolio for different consumer needs, for different consumer choices that, of course, we continue to invest. But what we try to do is allocate more resources on the top side of the chart in our Bs. That's how we like to consider portfolio. So before I go in detail of the Bs, because I would like to share a little bit what these brands are doing, I'd like to take a step back. Yesterday, J.J. talked a lot about lovers, right, which is the art part of my chapters. And I'd like to explain why do we think of that. And why do we believe it's very important in our brand building expertise, so moving from consumers and a transactional relationship into lovers and winning their minds, mouths and hearts. So first, I think J.J. explained very briefly yesterday. I think it's worth mentioning. This is a research survey we do every month, thousands of Brazilians all over Brazil. And we ask, among other questions, a very simple question, show the logo and we ask to consumers, how much do you love this brand? And then they have a scale from minus 3 to plus 3. And basically, whoever gives a plus 3 to whichever logo is presented, we consider them a lover. He or she is a lover of our brands. And what has happened or has been happening in the past is that we have been losing lovers, right? It talks about the whole double transformation that we need to do. The good news is now that we're changing our strategy now that, of course, we are betting more on innovation, using draftLine to understand about our consumers, we are back to gaining lovers. And there is a correlation between lovers and brand power. And I think the graph of volume shows the similarities of these curves, right? So we were losing lovers, we were losing volume. Now we're gaining lovers and we're gaining volumes. Our thesis here is, the more lovers we recruit, I think the solid the relationship, and there's a thesis for future volume growth. So the question is -- this is important, the question is, how do we build lovers, right? This is the thing that we've been asking ourselves. And we simplified the theory into 3 things. We think to build love with consumers, we need to establish a solid relationship with their minds, with their hearts and with their mouths. I'd like to talk a little bit about each of these 3 things very briefly with you guys. So first, we need to be relevant. For us to have a relationship with the mind, we need to be relevant. And that's what I wanted to say, firstly. The thing is it's getting harder and harder to be a marketer. I must confess. If I was here 20 years ago, I'll be showing you guys TV ads, and we put a lot of money and we would convince everybody to buy our beers. It's not the case anymore. It's getting harder and harder because the attention is fragmented because people can skip ads, platforms don't have ads. And I'd like to do a very simple exercise with you guys. Who here can pick a number of how many times we take our phones out of our pocket every day. Pick a number. You guys are good with numbers. Give me a number. Come on. Forty times? Forty times. Higher? Hundred. Hundred. Three-hundred. Maybe you guys because you're in finance, it's a little bit like, but the average, it's 300 times. 300 times our consumers take their phones from their pockets every day, and it gets even more complicated than that. We touch, we interact with our phones more than 2,500 times a day. We spend, we consumers, right, 5 hours, not because we don't do that, 5 hours every day on social media, right? And every day, 1 billion hours of YouTube is consumed throughout the world. So it is harder and harder to be a marketer, and that's why we need to rely a lot on entertaining consumers. And this is not easy to do because what entertains some of you, it's different than what entertains others of you. So we need to have, again, draftLine connected to the pulse of culture and helping us more than interrupt our consumers with advertising, entertain these consumers with a relevant content for them. The good news is that this is not new. We've been doing this for the past 2, 3 years and we'd like to show a reel that shows the case that it's something we are getting better and better at. [Presentation]

I think we've been doing this for a while. Of course, there's a lot to learn. It's very hard. It changes a lot. There has been a lot of success cases. And one final thing on this topic is this is our national content, but we also rely on something that we have, which is regional draftLine to adapt and to create specific content for different regions of Brazil, right? We always have to bear in mind Brazil is a continental country. So again, we use draftLine to entertain people on a more regional basis, and these are some examples of that. So that's how we think we're going to get better at having a relationship with the minds and being relevant to consumers' life. After we go through minds, we go into the mouth, which is all about delighting tastes. And if you think about the beer market in the last decade, it changed massively, right? Consumers are looking for more quality. Consumers are looking for different functional elements. Here's just a chart that illustrates the variety of the portfolio that had bitterness in 2010. And today, so we increased massively the offer of more bitter beers, but also of less bitter beers. I think that's important. That's why we need to have a portfolio. And it's the same for whatever elements you pick from a beer perspective, the body of your beer, more heavy beers, more light beers, color of the beer, even the price. So the beer landscape is changing. The relationship with the mouth of the consumers is changing. And if you get out of beer, now when you think about beverage as a whole, we conceptually have a potential of 200 million tastes, right, to conquer or to have a relationship with in Brazil. And these consumers are changing a lot, right? More than half of the Brazilian population, LDA population doesn't drink alcohol. More than 70% of people are having a healthier lifestyle, want to have a healthy lifestyle. And 3/4 of the population is willing to pay more for a sustainable product. So these changes, these trends, they are changing as well. So that's why we need to have not only a portfolio, but a very clear innovation pipeline. And I think here as well, the last years have shown that we are getting better and better at innovating, and I'd like to show another video. [Presentation]

Okay. So this is a video that makes us very proud because I think in the last 3 years, this has been a very, very important part of our transformation journey. I think there are very amazing examples of innovations that were very successful in the last 3 years. Some of them we're starting and we really have high hopes that they're going to transform the market as well. So mind, being relevant. Mouth, having a very good relationship with the palate, and innovate. And finally, we get to the heart. And here, it's all about having a purpose. Brands that are solid go beyond their own categories. They challenge what they stand for. They have a higher ground. They have a higher purpose. And those are the brands that we admire. So giving a couple of examples from outside the beer industry, right? Airbnb is much more than a home sharing company. It's all about creating a world in which everyone can belong. This is their purpose. Or Red Bull, it's much more than an energy drinks company. It's about giving wings to people and ideas. And finally, Lego, much more than a toy company, is a company that wants to exist to inspire the builders of tomorrow. So we really believe in these statements, in these missions, and the way we like to build brands here at Ambev, and J.J. also spoke to that -- about that yesterday is what we call the archetypes. So not to get into too much detail, but archetypes are based on psychology, and they basically represent human motivation, right? So deep human motivation. There are 12 archetypes that represent 12 different human motivations, right, in these brands, for instance, just to illustrate the brands that I've just shared. So Airbnb is an innocent brand. It's more naive. It's more creating a better world, a more rosier world, whereas Red Bull is about the magician brand, a brand that empowers people, a brand that transforms people. And we like to use that framework to give depth and to give meaning to our brands and also for the brands to be strategically consistent to one archetype. A good brand doesn't have two archetypes. It is consistent to one archetype. And this is what we've been using here internally. So again, J.J yesterday talked about Brahma being an everyman brand, right? It's about belonging. So ultimately, Brahma is much more than a beer brand. It's about uniting Brazilians through our passion. And this is not just a fancy statement that we put here to sound sophisticated. No, it guides all our decisions. When we say that we want to be in tune with culture but consistent to our purpose, that's what we mean. Brahma is not about segregating people, it's about uniting people through their passions. Budweiser is a hero brand. It's about change. It's about ambition. It's about dream. It's about progress. Therefore, Budweiser's mission is to empower youngsters to achieve -- to reach and achieve their dreams. It's much bigger than a beer brand. And lastly, Beck's, which is one of the brands we're going to talk about today, it's an explorer brand. A brand that talks about freedom and therefore, its mission is to unlock people from conforming. Much more than just bitterness, much more than just beer, it's about breaking the status quo and conforming. And the final message on archetype before I go to another video is as much as I showed that we have a different portfolio for one thing, not to compete with the other, we do the same for the brand positioning. So here, you have some of our brands, and we try as much as we can to have one brand in a different archetype because that means that these brands are appealing to different human motivations. And therefore, the more we complete this, the more complementary our portfolio is, and we don't have brands competing from the same human motivation. So it's all about having a purpose, having a bigger dream, having something to stand for. And I think on this as well, we have been on a journey, and I'd like to show a little bit of a video with the missions of our brands. [Presentation]

So what I really like about this concept is using technology to understand better consumers, but ultimately, to be more human. I think that's the mission for marketing organization. Use technology to understand consumers to be more human and therefore, have a very solid relationship by being relevant, entertaining more than interrupting, by delighting the taste of our consumers through innovation, and lastly, having a purpose, having a higher ground, having something that is bigger than our category to really appeal to consumers' hearts. So this is how we like to consider our strategic framework for building brands. And I would like to marry the 2 concepts that I talked, right? So the Bs are our main bets, and how do each of them position itself on the mind, mouth and heart of our consumers? So it's going to be a quick chapter for each of the brands, just to give you guys a little bit of the taste of what we're doing in each of our main beer brands. So let's start with Brahma, right? Brahma is the brand that we've chosen to lead, and it's already the leader of the core and the core plus, very important brand for us. And I think it's very important for us to take a step here back and really acknowledge the magnitude of what Brahma Duplo Malte achieved. In my 15 years of experience, there are many more failures on line extensions than successes. It's very hard to do a line extension. Sometimes it borrows from the master brand but it doesn't build back. Sometimes the line extension is a failure and it hurts the mother brand. And I think Brahma Duplo Malte is one of the best examples in the industry of a brand, of a line extension that became big and ultra relevant but it helped the franchise. It helped the Brahma master brand. I think this is very important and very unique. There are very few examples in the world, right? And this is just one chart that attests to the magnitude of that. So Brahma today is the most -- it is the brand most associated to the high-quality attribute within core. So the #1 high-quality brand in core, and Brahma Duplo Malte is the #1 high-quality brand in core pure malt. And this is something that didn't exist in the past, and it happened because of the magnitude of Brahma Duplo Malte. So with Brahma, it's all about this master brand. As we're talking about portfolio rebalancing, the 4 examples we have like that. Unless you need to create brands from scratch, you can use the strength of your mother brand to build a winning portfolio, and I'd like to show a video that talks about the Brahma. There's a lot of videos -- a video that talks about the Brahma master brand strategy. [Presentation]

So the good thing about this case is exactly the fact that it is a consistent case. It builds Brahma as a master brand, of course, portraying Brahma Duplo Malte. So things help each other, and I think that's the best that you want when you're sitting in a marketing position, having to make so many choices from a resource allocation perspective. So Brahma is all about the Brahmosidade, and it went even further. The creaminess, which is the mouth attribute for Brahma, you can use. Even in pop culture, we created a creamy haircuts for soccer, and we established a very, very solid innovation platform as well. So with Brahma, we want to make sure that we build a master brand in the minds of consumers so they understand that it's one brand, one purpose, one archetype. It's all about the creaminess that Edu talked a little bit about it today as well. And on the heart is about the Brazilian passions, soccer, Carnival and sertaneja, which is our country, country music in Brazil, which are huge. So this is our strategy for Brahma. We're very confident on that. The results are paying off massively, so it's very, very consistent. Then we go into Spaten. It's interesting that Spaten already sits on this chart, right? Spaten was launched last year, and we're already elevating it to one of our big bets. And we believe the space, the mission that it occupies, it's to be the reference in the core plus. And the reason why we've elevated Spaten is that when we listen to consumers, these are the 3 things they were requesting when it came to beer malt. They wanted a high-quality beer, a sophisticated [ coats ] and novelty innovation. And when we launched Spaten, yesterday J.J. showed a video that talks about the pilot, it blew consumers' mind on the 3 attributes by far. You guys are not able to see the benchmarks because the slide is bad. But basically, quality, sophistication, novelty are way above the benchmarks that we had established even with Brahma Duplo Malte, which was the best innovation in our history. So we really believe that Spaten is something that's going to continue growing because it appeals to the needs of consumers. Let me show a quick TV spot. TV spots are getting older, but it's still important, that illustrates a little bit better Spaten for you guys. [Presentation]

So the reason we're very confident in Spaten and when you compare to the competitive set of the core pure malt, first, the foundation was 1397, this is true. Like most of us were not born at that age, right? But it's really, really a lasting quality. Only something that is very, very good can last for 6, 7 centuries, right? The ABV is higher than the average pure malt. So it's a stronger beer. But because it uses a very specific Munich Helles formula, style, it balances the sweetness of the malt with a higher ABV. So therefore, it's a strong and easy drinking brand. And it has been a pioneer. Spaten was among the pioneers of the freezer, as we know it, to make beer cold. Spaten was the pioneer of the Munich Helles style, which is this unique style that balances the flavor of the malt and the ABV. And therefore, we really believe that Spaten, because of all these elements can become a true beer authority and so far, consumers are agreeing with us. That's why we've elevated Spaten. One year old in Brazil and it's already among the Bs. We really believe that Spaten is important. The way we're going to build it is premium cues. Remember, consumers are asking for sophistication. So we need to build a premium. We're going to develop a proprietary glassware, caneca for those of you who speak Portuguese, very, very important to build experience while drinking. I do share that Spaten is the sponsor of the Munich Oktoberfest. So we're taking the beer gardens all over Brazil. We already started last year, and we have in partnership with Porsche to build passion point of cars, which is also very important to sponsoring the Porsche Cup, German brand together with Spaten, which is very, very important. So we want to build Spaten as the authority of beer and pure malt. We want to make sure the consumers understand this balance between being a strong, yet easy drinking brand beer. And we want to make sure that we appeal at the heart of consumers with premium cues. The consumer of Spaten wants to see and be seen, and it's important to develop premium cues and premium sponsorships to build solid brand. So again, very, very young brand from a Brazilian perspective, very traditional brand from a world perspective, but we already elevated it to the strategy framework. The third element here in our Bs is Bud. This is a brand that I personally love a lot. And I think it has the potential to really lead the premium trade-up, which is one of the most important missions that we have in the portfolio. As you premiumize, consumers move from core into premium, and Bud's the gateway for that consumer. And the reason for that is that when you test the beer of Budweiser, the liquid of Budweiser, both blind or branded, it ranks #1 on all the tests that we do. And if you think about that, when consumers premiumize, you go to Stella, you go to Corona, you go to Beck's, these are more bitter brands, bitter beers. Budweiser is the true international smooth premium brand. So you can have the premium cues while having a smooth beer, and that's what we want to build. We want to make sure that people understand the concept of smooth and premium, and we want to take that concept for all our innovations, Bud Zero, which is the more smooth premium zero in the market, bud Nitro which is almost what double malt Duplo Malte does for Brahma, we want Nitro to do for Bud. And we have an amazing platform of innovation to talk about, Bud Tomorrow. So the mouth is very important for us to build Budweiser. But there's another thing. So if you rank #1 on mouth based on those tests I've just shared, we are also very well placed in the heart. So Budweiser in Brazil has the second biggest number of fans or lovers in the whole market. So you're among the top brands in mouth and heart that challenges salience, that challenges relevance, that challenges the mind. If you think about, Budweiser is a brand that talks about euphoria, shows, world outside. These last 2 years have been tough for us because it was pandemic, people were in-house, not a lot of events, so Bud suffered. On the other hand, the good news is that we're getting out of that, right? So we're talking about music, we're talking about concerts, we're talking about live events. We're talking about international American sports, and of course, the biggest euphoric moment of all, World Cup. And it all started and gave us a lot of energy on the Lollapalooza, which was the first festival after the pandemic in Brazil. So let me share with you guys what we've done in Lollapalooza. [Presentation]

So I don't know who of you went to Lollapalooza, but it was massive, really, really big. People were waiting so much time to have festival back in Brazil. And now going forward, we're going to take these mood in very many international shows all over Brazil throughout the whole year to really guarantee salience. And we're going to finish the year, of course, with the World Cup in summer. The 3 first games, as all of us know, it's on a weekday in Brazil. So it's going to be very, very important to build a very premium experience for Bud in Doha and bring it, import it and share with Brazilians here. So the case for Bud, which is a very, very important bet for us, is to become an international icon. It's to double down on the smooth premium, which is something that differentiates it from the competitive set, and the heart is all about music, NBA and for sure, the World Cup. And then we get into our last B, the B of Beck's, and Beck's is all about the future. It's all about the future of the high end. How will the high end be a couple of years from now. That's what we're interested in with Beck's, right? So Beck's wants to build itself as the most bitter brand. So the average bitterness unit, as we measure for pure malt is 14, 15. Beck's is 20, so way more bitter and doesn't appeal to everyone. It's not universal, so you need to challenge consumers' palate and build a lot of experience, premium experience, underground experience, [ calling ] hype experiences because we think the new premium is going to be a lot about that. So let me share with you how we're building bitterness for Beck's. [Presentation]

So our body literally as human beings is designed to reject bitter. And that's why we want to challenge consumers as they grow into the future of high end to challenge their own palates and learn to appreciate bitterness. But we also want to build this brand with premium cues, right? So it's all about amazing music festivals, but also about unlocking areas of the city. So something that is trending a lot in Berlin, London, New York is getting abandoned areas of the main cities and doing parties in these places. That's what we're bringing for Beck's as well to Brazil. And the good news, as there was chatting to some of you, is the main algorithm for Beck's is not to maximize short-term volume. It's not what we're looking for right now. What we're looking for is building an amazing brand, and in the long term, it's going to have an amazing volume. And when we measure attributes, which is a proxy for our brand power, we see that on high quality, in vogue, striking flavor, highlights myself from the others and preferred by young, it rates very well among the top brands of the market and way better than the average. So we're doing a very good job of creating a premium brand. But of course, volume is not the main driver of the organ, but we take a look at volume as well, although we don't maximize it. And the good news is if you compare Beck's to other brands, premium brands in their first 3-year trajectory, Beck's is ahead of them. So we really believe that by continuing making the right choices, not accelerating more than it needs, building it properly, we think this is going to be an amazing bet for the future to win consumers' hearts in the high end. So Beck's is a lot about the tomorrow, the bitterness in this hype underground. And with that, I conclude my second and biggest chapter, which was talking about the art part, the power where we create amazing brands and position them to have a solid relationship with the mind, mouth and heart of consumer. Now we're getting to the end. The final chapter. We talked a lot about innovation, but I think it's very important to, again, take a moment and understand why are we so -- we are so, we think this is so important, right? It's about keeping the momentum. We've shared some results with you guys, I think, in all the presentations. I think we've done a very good job throughout the last 3, 4 years on net revenue, on market share of innovation, on the margin of innovation, and of course, on launching more and faster innovations and responding to the market faster. I think this is a very solid case, but innovation is a discipline. We need to continue doing it every day, day in and day out. And what gets us excited is that we have a very disciplined playbook for that, a process in which we understand how to measure different stages of innovation and we keep feeding the pipeline. There's a video, very interesting video that explains the methodology of innovation in a fun way. [Presentation]

So sometimes in marketing, marketers don't like discipline, right, but it's fundamental to keep momentum and to make sure that things are -- have a process and they continue. And this discipline is not only to manage the innovation. It's about the future, right? So we have a very disciplined approach. The GOAs, as I do and J.J. already presented, the 5 growth opportunity areas, we use a lot of discipline, a lot of insight to understand these different GOAs and to have a very healthy product pipeline. So health and wellness, for instance, which is a massive GOA, we had Michelob ULTRA, Stella Gluten-free, Isla, Bud Zero. Another thing is consumers want to premiumize. So we've launched Beck's, Spaten, a lot of future bets or Beyond Beer that [ Dani Cachich is going to talk about. Consumers are also looking to different occasions for the future. And for that, we have in-home draft. We have wine, everything together with Z�, Bud kegs, purpose and positive impact. So talking about sustainability, taking a look into our supply chain and making our products more sustainable. A lot of innovations in Corona, Colorado and Skol. And lastly, affordability, so making sure our beer brands are affordable, either through value brands, but also through packs and making sure that RGB returnable glass bottles play upfront piece of our strategy. And we do all of that because we really think that we need to skate where the puck is going. It's a very famous quote that we like to apply to innovation. But here it's about combining science, art and discipline. So my biggest case for marketing is that we don't think of marketing only as art, there's a lot of science that goes into making art and a lot of discipline to keep the process going. That's why we are so confident on the future and we believe that we have a solid case for our brands in the future. So to close, from a science perspective, my biggest point is we need a wide portfolio, big bets making sure we allocate resources properly, but of course, have a complementary portfolio if the market dynamics change. On art, we really need to amplify our brand building skills to make sure to create fans and that we have a relationship with their minds, mouths and hearts. And lastly, discipline for innovation, have a very solid methodology, both to keep our momentum in innovation, which is grand -- great, but also to disrupt the future. So science, art and discipline is how we think of brands and our marketing in Ambev. That was my presentation. Thank you so much.

Thank you, Danny. So guys, we are a little bit ahead of time, but we'll take the lunch break now. We'll be back at 1:10, okay, Brazil time. During the first 10 minutes of the break now, you guys are going to watch a video from our colleagues from LAS that will be looping. And then also 10 minutes before we come back, we'll be playing the video again, so you'll have time to watch. See you soon. Bye-bye. [Presentation] [Break]

Welcome back. Let's now continue our presentations, talking about non-alcoholic beverages. Let me invite Pablo Firpo to the stage.

Thank you very much. Can you hear me well? Guys, good afternoon, everyone. I would like to start breaking the ice with you, okay? Today is my birthday. And the last time I celebrated a birthday at the office was 3 years ago. So all together, can we do a happy birthday, Pablo? 1, 2, 3 -- thank you very much. Very good. Okay. So taking advantage of that moment. My name is Pablo Firpo, I'm the Vice President of the non-alcoholic beverages. I'm Argentinian and I've been in the company for 20 years. 15 of those years, I've been in the marketing organization. I held a bunch of positions. I work in Argentina, of course, in Chile, but also at the global office. I led the Stella Artois brand and the Budweiser from a global perspective. And at the end of 2016, I came -- I went back to Argentina and started leading the non-alcoholic beverages business for Argentina, Uruguay and Bolivia. And 2 years ago, I was invited to join this position. Okay. Let me get started. So today, what we prepared for you guys is 3 big -- 3 topics here that we have in the agenda. We are going to start with a very quick overview. Let me go back here. A very quick overview of our business. We'll talk about the portfolio. We'll talk about a bit of the commercial performance. Then I will break down the agenda into 2 chapters. The first chapter is talking about -- it's not passing well -- is talking about the turnaround of the business that happened in 2018. And then I would like to share the opportunities that we are seeing looking forward. Let's start with the overview of the business. Obviously, in non-alcoholic beverages, we operate in 10 categories of 15 brands. We go from iconic brands like Guaran� in the CSD business. We have the water, we have premium juice, we have coconut water, and we have tonic water, energy drinks, functional beverages. And we have 2 partnerships. We have a partnership with PepsiCo. We are bottlers. We have a distribution of Pepsi, H2OH!, Lipton and Gatorade. And also, we have a distribution partnership in the general trade with Red Bull, okay? We are super, super happy with the portfolio that we have. Because even the position that we have in market in every single category and in every single segment that we participate, we have the #1 or #2 brand in the market. So we really believe having strong brands is one of the key components of having -- of knowing that the business is going to grow in a very healthy way moving forward. Talking about the commercial performance. Pretty clear, we have 2 big moments in NABs. From 2015 to 2018, the business was really not in a very good shape. We were in a decline, 6.2% decline up to 2018. After 2018, year after year in a consistent way, we started bringing back the business and even accelerating in the last year. So that's why I want to break the agenda to explain a bit what we did different from 2018, I call it fixing the basics, and then it's all about how we are going to unlock growth, okay? Talking about fixing the basics. So -- I pass it there. Basically, in 2018, we did a lot of initiatives. Looking at the strategy, we did a lot of things there, but I want to highlight 3, 3 things that really -- to simplify a bit the conversation here with you today. First of all, what we did was to stabilize the Guaran� brand, first of all, Guaran� brand. Second point, we had a very assertive strategy in the affordability segment. Number three, strong partnerships, okay? Here is just to give you a flavor of what I'm talking about. You can see Guaran� in the chart here. That was pretty -- decline was pretty in bad shape from '15 to '18. After '18, it starts to stabilizing. Affordability, very tiny growth from '15 to '18. After '18, really accelerating big time. Partnerships, from a negative territory it went to a positive territory. So I want to go one by one to give you a bit more color of what we did. Starting with the Guaran� brand. Guaran�, the stabilization of the Guaran� brand was all about reconnecting with consumers. We had a brand that was all over the place from a brand ideal perspective, tone of voice, visual identity really was very inconsistent. Everything that we did was 30-second ads when we talk about communication. We spent all of our money, in offline media, 70% of our money. And what you can see, our portfolio was very, very simple. After 2018, marketing team, insights team got together. We hired a new agency that we named them super powerful brand ideal. It's all about connecting with the hearts and minds of consumers here in Brazil. It's understanding the culture, it's understanding the humor. It's only a Brazilian brand could do that, okay? So we shifted the way we did marketing. We started creating a huge digital community. We started entertaining them rather than interrupting them with content. We spent 80% -- we shifted our investment, 80% now is digital. And we created a much more broader portfolio with new SKUs that were more proper to every single consumption occasion. After 3 years of consistent execution of this strategy, what happened is the following: today, Guaran� is becoming best-in-class for our company. Last year, 2021, the brand grew in brand equity. The brand grew in volume. The brand grew in market share. Today, Guaran� is the biggest brand, it has the biggest community in TiKTok, in YouTube from -- in Ambev and in ABI. We are far ahead of every single beer brand in the world with Guaran�. The content every consumer is commenting, is sharing -- [Foreign Language] consumers are commenting, are sharing, are really liking our [ countenance ]. That's generating more than 400 million of organic impressions. Organic impressions equal free media. Free media is optimizing our media investment. And last but not least, that content was really super, super strong, and it was last year, we were the most awarded Brazilian brand in the Cannes creative festival. Guaran�, very, very good shape. Number two, we talk about an assertive affordability strategy. Back in 2015, affordability was already 42% of the market. It was a trend that was growing. Today, it's 51%. Three big initiatives that really help us to turn around our performance: Number one, we have Sukita brand, a brand that had no role in our portfolio. What we did is we repositioned that brand into the accessible value market, and we started line extending with new flavors. Today, Sukita is the leading brand in the affordable segment here in Brazil. Number two, we started with a very, very strong pack strategy, a lot of CapEx behind it, starting to really tackle every single occasion, but at the same time, start to be more competitive versus other core brands. And number three, we unleashed Pepsi in our portfolios as smart choice brand in the cola segments. So those 3 things really helped us to accelerate the performance of our business. Last, the third thing that I mentioned was strong partnerships. Before 2018, all of our focus, all of our energy, all our team were thinking about renewing the contract with Pepsi. After 2018, we renewed the contract, and then it was all about joint planning, strategic planning, looking for opportunities out there, new initiatives, everything changed. We have a very long-term relationship with them. The relationship is only getting better and stronger with PepsiCo. And also happened with Red Bull. Red Bull, 2018 was about negotiating the contract with them. Finally, we signed the contract. We became the distribution partner of Red Bull in Brazil. And the same thing here, we think that is very complementary to our portfolio. And what we want to do is forge that relationship to have a long-term relationship with them. Okay, 3 things that I mentioned: stabilizing Guaran�, I mentioned about the strong partnership, I talked about the assertive affordability strategy. Those 3 things, things that helped us to turn around, those 3 things we are going to keep moving forward. Now let's talk about unleashing growth. What are the growth opportunity, unlocking growth here. Let me start with a very quick summary, why we are super excited about the future of the business. The summary is the following: first of all, we have a portfolio -- a very strong portfolio of CSD brands in Ambev. When I talk strong portfolio is our portfolio, our brand equity is 1.8x higher versus market share. We have equity ahead of market share. That provides us room to grow in terms of volume via distribution or via new packs, at the same time give us more price resiliency. Strong brands, more price resiliency. Trends in our favor. I will explain in the next slide, but we have favorable trends in our favor. We are positioned in -- competitive portfolio is positioned in higher growth categories. You will see our competitive, how we are performing in the categories that are growing faster. Number three, premium portfolio, we are going to shift investment. We are going to overinvest in our premium portfolio that is, of course, more profitable. Number four, we've been talking a lot about innovation during the last 2 days. This innovation mindset that the company is having provide us with more innovation, but at the same time, with shorter time to market. So we will see more and more innovation coming in the future. And last, we are talking about digitalization. This really extended, opened a world of opportunities for NAB, and I'll share some information and have some results about it. Okay. I want to show you a couple of slides emphasizing and showing why we believe in those things that will impact our business. Let me start with the favorable trends. I'll walk you through this slide. This is a table where we are -- the first column is the projected growth, what has been projected in terms of market growth for each and every single category. When we talk about NABs, it's expected to grow in the next 5 years at a 1.2% CAGR, right, up there. And then you can see the breakdown in the different categories. Second column is our strategic position in those different categories. Third one is the gross profit index to give you a flavor, a sense of the profitability from an Ambev standpoint. So what I want to highlight here is that there are some categories that are going to grow much, much faster. We are much, much better positioned. And the profitability, by the way, is very good. So to summarize, doing exactly the same that we are doing. We are going to favor, we are going to be favored in terms of volume and profitability perspective. But of course, it's not that we are going to do exactly the same. We are still seeing a lot, a lot of opportunities, specifically in these 4 different categories, and I want to walk you through the opportunities that we are seeing in non-sugar, in tonic, in energy drinks and sports drink. Those are the ones that we're calling the premium portfolio. Starting with non-sugar. So there is no secret here, non-sugar has been a growing concern among CSD consumers, but we seeing a beautiful pocket of growth within this segment in CSDs. Non-sugar is going to represent 10% -- almost 10% of the segment of CSD by 2026. The good thing is, today, we are very well positioned in this category. We are 1.6x higher -- our market share is higher than the total CSDs. We've been doing an amazing job with our Guaran� brand with H2OH!, but today, I want to talk to you about this case, the Pepsi Black case. November 2020, Pepsi Black was launched, replacing Pepsi Zero, right? It had a winning liquid, won in every single blind test, a very, very premium packaging. And we used the tone of voice, that boldness, that very challenging tone of voice to launch a product in market. So far, very, very promising results. We can see that already it doubled the -- what it represents within the Pepsi franchise. And we more than quadrupled in terms of market share and more than quadrupled in terms of distribution. So far, very, very, very promising results. So what we want to do, we want to double down behind Pepsi Black. We are going to shift all the marketing resources within the Pepsi franchise behind this product. We are going to leverage every single global asset, the UEFA Champions League, Messi. We're going to use digital to generate more awareness. We're going to use B2C to have more sampling of the product. We are going to have a state-of-the-art execution. Now 50% of the facing share will be Pepsi Black, 50% of share will be Pepsi Blue to drive more purchase intent. We are going to use our national accounts, Burger King, to drive trial. And of course, everything will be powered by BEES to gain more distribution. Big bet behind Pepsi Black. Now entering to our premium portfolio. So tonic water. Tonic water is a category that has been growing very much, but it's going to grow even faster moving forward, 10.3% CAGR in the next 5 years. And we know that gin is on fire. It's no secret here. It's growing at a 22% CAGR. And consumers in Brazil, they taste a movement to a more mature and more bitter type of taste. So we have a jewel in our portfolio. It's Tonica Antarctica. Tonica Antarctica is the reference, is the -- even the name, Tonica, is tonic. So it's been around for 108 years. So it's super connected with the Brazilians. And what we want to do is to use this brand to, of course, keep growing. But we are going to have 3 pillars: developing new consumption occasion, the pre-party occasion. We are going to use mixology as the experience inside the on-trade. And also, we have a very, very robust pipeline to bring new customers into the franchise but at the same time, bring excitement. As a leader in the category, we need to bring excitement. Second brand in our portfolio. Also, we see big opportunities in energy drinks. Energy drinks growing not only in Brazil, growing everywhere with a very high CAGR moving forward. We have an amazing, amazing portfolio. We have Red Bull premium iconic brand, and we see a lot of opportunities still in terms of distribution. Still a lot of opportunity in terms of execution. And then we have an affordable energy drink that is FUSION. FUSION is very, very well positioned in the gaming community, and also been growing for the last 2 years. Next premium brand. Also, we are seeing a lot of opportunity, but it is in the sports drink category, also growing way ahead of the NAB industry, and we have a market position of leading in that category. For us, it's all about unlocking per capita. Gatorade is about unlocking per capita. When you compare Brazil versus the rest of the market, we have the lowest per capita in South America. Just having a reference with our neighbors here in Argentina, our per capita is 1/3 of what they have in Argentina. So the good thing about a brand like Gatorade, it's a global brand. When you have global brands, it's easy to copy/paste. We have great cases around the world. When you talk about how can we recruit more consumers, we have the case of Gatorade Zero. When you think about how can we develop new consumption occasions, you go to Argentina, they have 4 different types of sizes of SKU of Gatorade and even multipacks. We only have 500 ML bottle. Or even when you say how we can have a product with extra hydration, we have Gatorade Light that is booming in the U.S. and also they just launched in Mexico. Our plan moving forward is not a revolution. It's just copy pasting what is working out there to really unlock that per capita. Quickly talking about innovation. I've been -- in some of the slides I've been sharing with you, there's 3 pillars. I talk a lot about the renovation of the portfolio, all the line extensions that we're doing in liquids. I talk about revenue management, pack occasions. But one of the things that I didn't talk about is health and wellness, a very, very important pillar in our innovation pipeline. It's a very huge trend in terms of consumers. Health and wellness. Our strategy, of course, is more about learning, we are piloting, we are going slow because this, of course, is something new to our business. Today in the market, we have beautiful examples of what we are doing. We have a 100% natural CSD with Natu. We have healthy and functional shots that we are also testing. We just launched an affordable juice with vitamins. We are thinking how we can democratize health and wellness to lower-income consumers. Again, this mindset that Ambev has now been an innovative mindset company is helping us be big time in the agenda of health and wellness. But one of the things that we are more proud of is our sustainability agenda. So when you see the evolution of recyclable PET in our portfolio, today, April 2022, we have 45% of every single bottle that we have in the market is done with recyclable PET. And our objective and our goal for 2025 is 75%, okay? But April, we just reached to a new milestone that 100% of every single bottle that we produce of Guaran� Antarctica, every single bottle, 200 ML, 3 liters ML is done with 100% recyclable PET. We are the first CSD brand in every market that we operate as Ambev, is the first brand in CSD with 100% recyclable PET. This thus very, very strong moment in our company that we are really celebrating this new milestone. Last, just 2 more slides to go. I talk about digitalization. An amazing example of how BEES is helping our business as Ambev is here in NABs, here in the non-alcoholic beverages. Our distribution, our buyers grew 22% in the last 2 years, pre-launch of BEES -- post-launch of BEES, 22%. And all the categories that we want to focus, they're getting benefit even more. Gatorade, 38% more buyers, super, super strong. But it's not even about having more buyers. We are also having more assortment in every single point of sale, 19% pre/post BEES. So BEES is helping us having more capillarity, but at the same time, more portfolio in every single point of sales. Summarizing, we are super excited with the future of our business. We talk about 5 things. We have a very strong CSD portfolio. Trends are working in our favor. We are going to focus and overinvest in premium portfolio. Innovation is our mindset. We are going to see more and more innovations coming in. And finally, BEES is making a revolution in the NAB business. Thank you very much. That's it for me.

We present Dani Cachich.

Hello, good afternoon. So it's working. I don't know if it's working. Let's try again. Anyway. Yes. So my name is Daniela Cachich. I'm the Beyond Beer BU President. As you can see, I recently joined Ambev. I have more than 20 years working with multinational companies in different segments, global brands, local brands, sometimes leaders of the category, sometimes challengers. And I'm really, really happy to be here presenting to you our new growth avenue for Ambev. You might be thinking why Daniela joined Ambev? Since 2019, I start seeing a big transformation from this company from outside, a transformation that I think very few companies can make in our country, a transformation which makes Ambev goes beyond beer and becoming a platform. I saw a company much more consumer-centric, much more customer-centric, investing a lot in innovation, as I've never seen before, and making a structural transformation using digital, such as BEES and Z� Delivery. So the reason why I'm here is because I believe in Ambev as a platform, I believe in the leadership of the company, and I want to be a change agent together with my amazing team to build this new avenue for our company. And last but not least, help to champion diversity and prudent journey that we know that is super important for our company. So let's go beyond. I will start sharing our mission. We have a mission of bringing much more people to our ecosystem. People who are already making cheers, but not necessarily with our products. We want to translate existing habits into new products and in new occasions. We want to anticipate new consumer behavior and trends. The more we have consumer intimacy, more we can understand what are the trends that will become a reality in our country. And also evolving and delivering new experiences to consumers, we know there is a lot to be done in terms of retro and experiences. By doing this, we have an amazing opportunity to bring more than 10 million new consumers, transform them into friends to really make cheers with our products and our experiences. When you look at the 3 main categories in the alcohol business, we see beer, wine and spirits. Because we are so obsessed about what consumers want and what they don't want, and why they drink some specific products and why they don't, we understand that there's a lot of attributes that we can put together and we can offer the best of these 3 categories in a new portfolio, which means that we're going to bring to the company new types of consumers. And we are talking about -- mostly about women. We are talking about youth. We are talking about wine drinkers and spirit drinkers. So there's a lot of people that can become part of our fan base. There's also an interesting information to share with you. If we see, the RTD category is the fastest-growing category in the alcohol industry. But there's one specific information here which I think is important because when you look at developed countries, the weight of this category is around 20% versus beer. So when we see where we are in Brazil, we have a huge avenue in terms of growth that we can help to build in our country. So how we fit into the company's strategy? I mean we saw in the presentations that our strategy relies in creating a platform. And then when we look at our role within this platform, although we can play a really strong role in all of the pillars of the platform, there is one specific, which is thirst to lead the future, which is very important for us because we are talking about -- we are talking about a lot of new innovations, new things for consumers, new experience, new taste profile. And what we see here is that we can, from one side, address unmet consumer needs because we know exactly what they are looking for. We can bring a different type of consumers to the company. And as I said before, when you look here in developed countries, this category grows faster than beer. So it's a new avenue for us. So first, we said, "Okay, let's understand what is happening, why consumers are entering this category. Let's really talk to consumers and understand why they see this an amazing opportunity to make cheers with different products." So we conducted a study globally to understand what they want in terms of product attribute. And the #1 attribute is sweet, fruit and flavorful, which is completely different from what beer offers. So this is about incrementality to our business. The second thing was about trends. So what is happening? From one side, and Danny mentioned in this morning about this health and wellness which is already happening in beer. From one side, they want something that address this naturalness. But from the other side, it's about premium convenience that I will explain for you a little bit further. And then so what we said, "Okay, having understand what consumers want and what are the trends, how can we transform this into a portfolio?" So how we put together the innovation machine of Ambev to develop a new portfolio. So I'm going to show you a little bit of our portfolio approach. So the first thing is there's 3 main subsegments. The first one is sweet kick, the second one is familiar flavors and the third one is premium convenience. There is no one-size-fits-all approach for RTD. Normally, we say RTD, RTD, ready-to-drink, but there's a lot of different things within unmet consumer needs from this category. So the first one is really about being in high-energy occasions. And we have an amazing brand that I'll go through each of them afterwards. The second one, it's about inclusions and better for you. And we have 2 brands to play in those segments. And the third one, we bring here a partnership with Pernod Ricard in which we combine both of gin and our Tonica that Pablo already mentioned. So we have like different propositions from different occasions with different positionings to offer to consumer completely different experiences. So let's talk about Beats. Beats is the #1 brand in RTD in Brazil. It's 0.5 million hectoliters that was built in partnership with Anitta. And as we can see here, 70% of the volume is incremental and is 2x more profitable than beer. So let me show you what we did in 2021 with this brand. [Presentation]

What is interesting about this brand? I think it was one of the first brands to really look at the celebrity and understand that the celebrity is not someone to be only in the commercials, but someone who understand a lot about fans, understanding a lot about audience, and put her as part of our creative strategy squad. So Anitta today really work with us in order to understand how can we offer a better proposition with consumers, how can we engage, how can we make them love us? The second one is Mike's. Mike's is the #1 brand in RTD in U.S. and Canada. It's present in more than 14 countries where we operate and also brings 75% of incremental volume for us. It's a brand that we are launching nationally that will play a strong hold for us in familiar flavors. And I'm going to show you a little bit how we want to position this brand here. [Presentation]

This is a global brand, a very important brand for us. And what I like about the way, I mean globally and locally speaking, we want to build this brand. It's a global brand but with a lot of local touch. So it's about bringing local flavors. We have -- in our portfolio, we already have like pitaya flavor and is the #1 selling SKU from this brand, which shows that we can play with like global assets but also adding a lot of local knowledge. The third one within familiar flavors is the health and wellness. This is a brand which was like piloting as we speak and is a brand that we have ambitions in terms of being national. This brand offers a lot of naturalness to consumers, low alcohol, low sugar, is less than 100 cals per SKU per can, and really over index in female. So within these familiar flavors, we see completely 2 different propositions that help us to be in different type of occasions. When we move to premium convenience, and this is the partnership that I said to you that we are putting the best and the most awarded drink from London together with our iconic Brazilian Tonica, this is a combination that offers to consumer the quality mix cocktail bars in a can. Within the growth that I said to you, 0.5% of this growth comes from this type of products, to mixed cocktails that we are able to put in a can, and we can enter in much more occasions than the normal cocktail allows you to do. So grows a lot, build on spirit credentials and brings the bar quality to our portfolio as well. And I think this is where we see the power of Ambev as a platform in its best. Because our footprint capacity, our distribution capillarity, our digital assets such as BEES and Z�, everything together, the learnings from the category when you see U.S. and Canada and everything that we have globally speaking, we can leverage by being a platform, and really can bring us a lot of learnings to help to build this category in Brazil. So if I look at Beyond Beer in a nutshell, it's inclusive, brings much more people to our fan base. It's incremental, at least 75% of the volume, and also it's profitable. So with this, I ask Yoka to come to this stage. Thank you.

Thank you, Dani. So guys, this closes our presentations for the event. So a lot of information. I hope you enjoyed. We'll need to get ready for the Q&A session, right? So we're going to take a 15-minute break. During the break, you're going to watch another video from our colleagues from Canada. You will be looking over, you have time to watch it. So let's go for a break. See you soon. [Presentation] [Break]

Welcome back. Let's start. We start our Q&A session. I would like first to invite the presenters of the day and also invite Jean, Lucas and Daniel Cocenzo to the stage, please. While they get comfortable, we'll have 45 minutes for this session. Please try to keep one question per analyst. And similar to yesterday, I see that people didn't get very excited sitting in the front row, I'll start from the first row. But this time around from right to left, okay? But before Thiago starts, Lucas has a message.

Yes. Just to set expectations for the Q&A today, okay? Q1 results are right around the corner. So we'll talk about Q1 in 3 weeks, okay? So please sit tight. Having said that, with respect to 2022, what we said in February around our expectations for the year stands, okay? So in February, we talked about 2022 being a challenging year with volatility. January was a tough month. So a tougher start to the year is what we expected back then. We talked about input cost pressures, primarily from commodities. That's why we gave the guidance for Brazil Beer cash COGS per hectoliter ex marketplace, third-party products ranging from 16% to 19% for the full year. We also talked about our desire to work towards delivering organic EBITDA growth at a consolidated level ahead of the 10.9% EBITDA growth organically that we delivered in 2021 and how to get there. Top line performance ahead of bottom line recovery, and within the top line, more net revenue per hectoliter performance than volumes, okay? And if you look at EBITDA performance for the year from a geographic standpoint, one of the reasons to believe is Brazil Beer and Brazil NAB bouncing back after 2 years of EBITDA decline. We think 2022, there is room for us to go back to an organic EBITDA growth in both business units. And last but not least, international operations continuing to help the overall performance of the company, okay? So then back over to Yoka.

Thank you, Lucas. Thiago, you can start. Can you please stand up?

This is Thiago Duarte with BTG. Thank you for the presentation and for the opportunity. If I have to pick one question, there probably would be many. I think it goes into what you both described and a little bit into Jean as well. If you could give us a little bit more color on -- because we saw the market share evolving. Jean said yesterday, last year was probably one of the best years in terms of market share recovery. And then you talk about the brand equity, the brand preference recovery of the portfolio. I still have a sense that somehow your market share evolution last year or the last couple of years was stronger than your brand equity, right? You showed some interesting information on that. And then Lacerda discussed a little bit how the pricing mix changed and the channel changed. So can you elaborate a little bit how this equation is playing out in terms of brand equity versus market share? Particularly if you look into core and then core plus and then premium, that will be interesting to see how the revenue per hectoliter can evolve going forward based on what Lacerda mentioned in terms of adjusting the price tree there. That would be the question.

I can give one here for and you'll keep thinking over there. Because Duarte is always very smart, so we have to really think about his question. But just for you to have -- so let me elaborate on the KPIs of what we follow and then we talk about the direction, okay? So there are 2 KPIs that we follow a lot. That one is market share, volumes market share. There is value share, too, that we follow on revenues and there is the power. There is the ultimate KPI on branding. So we call this power, okay? So it's a survey that we do with consumers. It is related with what we believe it is future market share. So the power, it is the top of mind, the significance -- as how significant is each brand for the consumers, what they recall if they feel close. So we summarized this on a number and we come to the power of our portfolio. And today, what I can tell you it is that the power is slightly below our market share, both growing. Usually, it was -- so it is slightly below, and we believe there is a little bit below because there is a reach and there is a strength on the service level of our customers that can play a difference on that. But having said that, they are not that different, okay? So they are more or less in the same level. And it's normal that when we launch young brands and new brands, that you pick up consumers' minds first then the volumes, okay? So usually, we have value brands that they rely on proximity, distribution and price, and you have more premium and core plus that you rely more on the marketing initiatives. So just to elaborate a little bit on that, looks like they are in more or less at the same level. I think the biggest difference that we have on power and market share is Skol. I think Skol has much more volumes that we have in terms of recall of this. And when we look at the other brands like, so the competitor's brands like the other ones that are core and below, everybody is more or less like that, okay? So with this information, I think you can elaborate.

You already said most of it, I'll just complement that. If you think about the whole market, not only our performance, on average within core, the power of the core brands is smaller than the market share and that is the inverse in core plus and premium. So usually premium brands have higher power than share. Usually, core brands have higher share than power. This is the same for every beer brand in whatever category you cross, it usually is like that, right? So what I can say complementing what J.J. was saying is, for us, building power ahead of share is even more crucial in core plus and in premium. And contrary to your gut feeling, that's what we've been doing in the last year. So we've been growing in this segment where it's more important, power ahead of share, which is our most important KPI. So building the brand ahead of share, especially in core plus in high end.

So this equation in core plus and premium, so power is moving faster than share in our core plus and premium.

Relative to core?

No, relative to them. So Budweiser is growing faster than Budweiser market share. So the basket of core plus and premium, the brand equity is growing faster than the share of their best brands, okay? And the other brands that are less reliant on power, they are really growing on what they should grow, the distribution and different market mix, but core plus and above, our basket, the power there is growing more than the share there.

And just to add, this adjustment -- the price readjustment that I mentioned before helped core big time, right? So the RGB prices, the revised prices, they helped the core grow big time this -- the last few years. And then it's volume growing, market share coming as well. So just to add.

I think the point there is each segment has a dynamic, each segment, super premium, premium, core and value. And our power is growing ahead of the share that we gained in core plus and premium. I think that's a relevant information.

Next up, Carlos Laboy.

Carlos Laboy of HSBC. You spoke quite a bit about discounting and how difficult it was to get this back on track. And so my question relates to brands. Some brands like Brahma were salvageable, but others seem to have gotten too damaged. What did you learn about brand rehabilitation? And what do you do about the damaged ones so that they're not a burden on your good brands that you're trying to grow?

Okay. I'll start, then you complement me. I think that, as Danny mentioned, this portfolio approach is key for us, right? So now we have the 4 Bs, which are the brands that we invest the most. And then we have the other brands that all have a relevant role in our portfolio as well with their different positions. Some will play a regional role. The others will be more national, but in a different positioning. Pricing -- and you mentioned discount, but the pricing position of all the brands, it was an important part of our pricing tree revision. And as important as equity investment and marketing investment is to have the right pricing for the right brands depending on what we expect from them. So the entire portfolio was reviewed. And today, we believe we have the right brands at the right price positioning and with the resources, or at least having the right amount of money in total so that they are supported and also delivering what the consumers expect from these brands, right? So this is pretty much from my side.

So next question from Ricardo.

Let me just -- before you, just to elaborate a little bit on this one, Laboy. Everybody asked me during the lunch about the other brands that we did not present, so asked about mainly -- so Corona, in a sense. So Corona is doing great. We know you see here our people saying, "I went to a nightclub yesterday. Corona was there." So Corona is part of our plan. It's doing great. It's just that we decided to show the captains of each segment. We are investing a lot on Corona. And the other side of the question was in Skol, that we mentioned about Skol for a lot of time. So -- and then what I can say is that we decided to show the most relevant brands, the captains of each segment that we decide. But the good part, it is that in the past we had brands that they were really been a drag, okay? Skol for a long time was a drag. And what I can tell you is that we don't have drags anymore. So Skol is not a drag anymore. It's not that we are not betting on Skol. Skol finds its new market mix. And its market mix is really about packaging the new work equation more aligned with what Skol needed in distribution. And it's just there. So it's not a problem anymore. It is not going -- probably go -- it's going to be the future anymore, but it's not a problem anymore. So that's why we decide where we want to focus on the brands that we believe that has a lot of room to grow, correcting the others for the right work equation for the right market mix, okay? I don't know if I answered, but it was a little bit of the question that we had during the lunch.

Thank you, Jean. Please, Ricardo.

I had a question for you, J.J. On the channel, now that we are going through the reopening, your competitors have been uncomfortable with the lower share that they have on the on-trade. And you -- and that has been clearly a winner in that channel over the past decades. How are you thinking about defending that channel in this context of perhaps your competition becoming more aggressive on that channel? And particularly considering the environment that we are today in the reopening, do you see that as a threat because it could be more attractive for your competitors? Or you see an opportunity because you are already a leader, you could become even more relevant?

I think for sure, the answer is a big opportunity for us moving forward. I think it was always our strength. At some point in time, we kind of lost a little bit the steam on bars, and everything that we showed here was in the last 2 years. We reorganized, we need to maintain as our main strongholds. So we did a lot of decisions on the pricing strategy, on the brand strategy, on packaging innovation, on service level, on listening, on digitalization, on everything that we could like [ intanta ], delight and be designed for this occasion that for this channel, that's the small retailer in bars. And I believe that we are in an excellent place today. We feel that we never had a partnership so strong. And I think from now on, it's the reopening. And I think I will benefit from that. We will benefit from that a lot both because all the things we did during the bad times in the pandemic, that's about credit, about rolling, about designing for them. And I think now it's wind in our favor. I really see this as wind in our favor in the next year, so in the reopening.

And from the others, you won't feel pressure in that channel?

My market is very competitive, right? It always has been, will continue to be. I'm very excited about the reopening in bars. I feel very, very strong there.

And just to add Ricardo, connecting with what we talked about yesterday, I think the way we're thinking about the reopening, right, and the market in general, it's about focusing on the client, it's about focusing on the consumer, right? They come first, right? So when we think about the reopening and the opportunities and challenges that the reopening can bring, right, the way we're looking at this is we need to make sure that we have, right, the best portfolio out there, the best brands out there, the best service level out there, other products and services we can offer to solve their pain points. At the end of the day, it's their call, right? It's their choice. They hold the ultimate decision-making power there, the clients and the consumers, their choice. We need to make sure that we're better prepared to serve them right and add value to them more often than not, okay?

Now please, Thiago.

Thiago, Goldman Sachs. We're probably heading into a moment of stagflation in Brazil. And given the challenging macro scenario about to face, how should we think about pricing trade down, even the pace of innovation and your product mix going forward?

Okay, see if you want to complement. But we talked about Brazil Beer pricing on the closing, and we mentioned that net revenue per hectoliter. So that's what we mentioned in the results of -- less results that net revenue per hectoliter should continue to improve, should be better than what we achieved in 2021 versus 2020, right? So that was the official information that we gave, and we sustain that. So that's what's the official information on that. So having said that, when you look into our sector, when you mention about stag growth, so what I can say is that this should be an amazing year in terms of micro, in terms of consumer sentiment, in terms of bars reopening, in terms of 2 half carnivals that we mentioned, in terms of S�o Jo�o. We don't talk about this now. So in English would be -- we don't have that translated in English, but it's going to -- there will be a lot of events in Northeast, in north about now about the S�o Jo�o parties that they are just being organized right now. So there is this consumer sentiment of going out euphoria. There is a World Cup during the summer that we never had. So from the consumer perspective, this should be a very good year in terms of sentiment and in terms of activation of the demand. And -- so that's why. So that's what we mentioned and the volumes should be more of a good -- it should be a good year in terms. So on top of all of that, on the other hand, we don't know where inflation and income will land, but should be a good year in terms of the industry.

Yes. No, just to put it in a slightly different way, I think for us, it's about seizing the moment, okay? So yes, there are macro challenges, right? And there may be volatility, continued volatility throughout the year. But after 2 years, right, of depressed consumption occasions, and we've seen this in the last weeks, right? Danny talked about Lollapalooza, right? There is this demand, this desire, right, to reconnect, come back together, celebrate. We need to seize these moments every single moment. We have to have the foresight that it's coming, plan ahead, be fast, be agile to really seize these consumption opportunities that, again, S�o Jo�o, another carnival next week coming up, S�o Jo�o in Q2, the concert schedules throughout the year and to wrap things up a World Cup, right, in November, December, okay?

Next question from Marcella Recchia.

Marcella Recchia from Credit Suisse. So my question is for Lacerda about the profitability of -- actually, the price adjustments you did for RGB versus one-way, right? We saw that the profitability in channel and for the RGB are now lower than before, right? And my question is if this is the level that you see now as sustainable going forward, so we should expect this pack and channel having lower profitability than it had before? So that is my question.

Thank you for your question. The figures that I saw -- that I showed, sorry, they were comparing the difference in profitability between RGBs and one-way and between on and off trade, showing that RGB is much more profitable than one-way and the on-trade is more profitable than off-trade. The difference reduced, but they are still relevant, right? So the relativity that we achieved is a relativity we understand this is a fair one, and this is a healthy one for us to keep growing the right channels, the right packs and where they should be. Therefore, we will keep on looking at the right, keep on trying to improve as much as we can profitability in all channels, in all packs as well for themselves. And the relativity between them, we understand is the correct one, currently. It can change. The market change, consumers change, trends change. So I cannot say it's for the long term. What I can say is that currently, this is the relativities that we understand are the correct ones and that are beneficial for us because the trends that were coming against us and impact our mix negatively in the last couple of years, they are now positive to us. So 2021 was the first year after some years that the mix was a positive impact in our profitability, and we expect it to continue that way going forward. And this was one of the main levers for us to deliver good results in 2021 is to have the mix, the trends coming in our favor.

And just to add, Marcella, inside the RGB, we are also working premiumization as Eduardo's shown. So we have 4 new 600-milliliter bottles with Budweiser, Beck's, Stella and Spaten and Buds and Brahma Duplo Malte are leader. So these will also support us during the growth of the RGB to improve the mix inside the pack as well.

Next up, Isabella.

Isabella Simonato, Bank of America. My question is also to Lacerda regarding channels. In fact, with more thinking, how do you see those mix going forward, right? We understand that now economy is reopening, but we also had a long-term discussion that off-trade, for example, is gaining share across the globe, right? But we understand also that you guys have been doing a better job than a couple of years ago. So how do you see the balance between those 2 channels longer term, right? Is this trend really going to happen in Brazil or not? And that goes a little bit into RGB as well, right? We understand that now you recover the mix, but how can we think about that packaging specifically going forward?

Okay. Thank you for your question. With regards to the different channels, right, so on- and off-trade, what we see is that the trend within off-trade for cash and carry and the convenience stores is to continue growing, which has been the case for the last years as well. So this is a trend that should continue. That's our expectation. And for these trends, we have the right packs especially for cash and carry, as I showed before. We have new packs in the market that are helping us within cash and carry. For the convenience stores, RGB also plays a role, [ litrinho ] plays a role in the convenience store and is helping and growing towards our favor as well. So after the rebalance of the price tree, we believe that not only which give the right price relativity between the channels, but even within the channels, we have the right products, the right packs for them to help us in their trends of growth, be more profitable for them and to us as well. With regards to RGB and the reopening of the on-trade after COVID, we are very excited with the results so far. We already see RGBs growing in the on-trades. And the more the on-trade grows, the better it is for us as well because of our position there. We see that once we adjust the relativity, people started going back to RGB once they see the benefits of it, right? So the channel mix and the pack mix after the adjustments we did, there are, at the end of the day, helping us in the short term. And depending on what's coming for the mid and long term, they should continue to help us going forward.

Thank you for the question, Isabella.

Just one thing. On top of everything that you mentioned, Isabella, so the digitalization is a big trend that is going. So the ultra convenience, it is really something that is here to stay and it impacts the channel performance. And that's unstoppable, we believe, too. So there is this additional trend that helps the in-home consumption that we think we are very well positioned on that.

Our next question from Lucas.

Lucas Ferreira, JPMorgan. I have a question for you, Daniela. This kind of new growth avenue, so Beyond Beer future beverages is obviously a great opportunity. But if you look at some development work, development markets, there was -- those may be also seen as a threat to some brewers, right? Because maybe they were a little late to adapt to this trend or to join the trend, but we definitely saw sort of a market diversification and new players coming to this space. Maybe that equation you show it of 75% of our consumers being kind of new, didn't kind of work exactly in some development markets. So my question to you is, do you see that this is also kind of being a potential threat in the Brazilian market? And another question that I have for you is in this equation of kind of pull and push, right, so obviously, consumers demand new things. But what's the role of Ambev also to push this and kind of show to the consumer that there are new things there to be experimenting? How fast are you guys planning to grow this industry or have a role for industry to grow? And I'm not sure if you can share maybe some even qualitative numbers of can we even get to that 20% number we see in some developing markets at some point in the future, or something close to that?

Thank you for the questions. In all pilots that we made and all projects that we are testing as we speak in the market, we see this being extremely incremental to our business and also bringing -- and getting penetration in consumers that we were not with the portfolio that we have today. So what we see here is really a big opportunity to increase the number of people cheering up with our brands. We see more and more in the places that we are with this portfolio, we see the product turning extremely well. And the more we go to the young adults, we see they're trying a lot of new things. So yes, there are some they drink beer, but there are other guys that they are drinking gin, vodka and many other type of alcohol. So we see here in Brazil an amazing opportunity of offering different experiences to those consumers. Yes. And in the end of the day, I think it's about understanding what they want, and they are giving us a lot of insights in terms of the type of experiences they want. And also, I think we have an amazing capillarity in terms of reaching consumers. So it's about mental availability, but also physical availability. And I think we can actually leverage our footprint in order to make consumers adopting those innovations. In terms of pull and push, I think with -- the world is digital and consumers see everything happening everywhere. I think it's much more about being a tool of offering new things for consumers and they adopting it rather than push and pull. It's about our ability to innovate, our ability to bring new trends and consumers will adopt.

Just to add, I think the good part is that we are ahead of the curve. I think we started in the right moment the products. There are many pilots going on, Dani showed. So we just feel that we are ahead of the curve if we are in the right moment -- we are not delayed, okay?

Next question, Gustavo.

Gustavo From Itau. And actually, my question is a follow-up on your comment, J.J., when you mentioned that this core was not a drag anymore. I wanted to explore with you, how did you manage to solve that? What did you do with that? And if this is a strategy, if you are able to replicate this strategy in the case that the core plus continues to increase and you might face a similar problem in the future. So what did you do and if it's replicable going forward?

Replicable. So when you look at other markets, and we look at China and we look at U.S. So we have to look more and more the market with super premium, premium, core plus, core and value, okay? So these are completely different dynamics. So the market more and more, they will fragment from the past that we had 85% of the market in national core brands, and we have to develop strategies in the right market mix for each segment. So super premium is different from premium, that is different from core plus. And we believe that these things will evolve as we see in the other countries. So the core plus is really an opportunity. There is no reason it really be much more relevant than it is today. The premium will continue to grow, but will grow in its pace. And the movement that we did to resolve with Skol it was a deep understanding that the market mix of a core or something of a discounted core brand is very different from the market mix of Beck's. One thing is really top of the funnel was really thinking about the pull is really being ahead, seeding a lot, doing in a more slow way in cooking and the demand being much ahead of the offering. And the other one is really to be distributed with the right worth equation, proximity, okay? So that was the learning to address our portfolio. So what happened with Skol is that we really don't need Skol to be the most desired brand. To be a very relevant brand selling a lot, it's just you have to be in the right worth equations, okay? So I think this learning of working with a portfolio and not just 1 segment and 2 brands, it is something that is here. It is developed. We are looking into other places. And I think it's established. I think we are much more -- with much more tools to think brands in different ways. So the #1 pillar of our vision of platform is brands for each and everyone is the portfolio strategy, and we are much more prepared to win on that than we were before.

Can I just say one thing? I mean this core dilemma happens all over the world, right? You have these core brands that are very strong and then they get a little bit position. And it's a struggle for every market. I think there are 2 success cases as an archetype as well, right? One of them is they've been able to reinvent a little bit themselves and occupy the core plus segment, which is what we've done with Brahma here very successfully. So you understand a little bit better and you can offer through a line extension or even through the core brands, a better proposition. The other one is being an alternative. And J.J. talked about desire. But the question we need to ask is, desirable for who? So Skol doesn't need to be the most desired brand maybe for this group here, but it can be for our consumer from value, for instance. So the second way that a core brand can invent itself and find its path back to growth is readapting its marketing mix to be desired for a different type of population or region. So I think what we are doing right now with Skol is finding the right marketing mix and sales and marketing package to be desirable for the people that we want to attract. And I think it's all about being consistent to what the brand is about. We talked a little bit about archetypes, and Skol is the jester archetypes. The archetype that laughs about itself, that is about fun, unpretentious. And I would say there's a case, right, for a jester brand in a market where everybody is like sniffing beers and talking about pure malt to say, I'm an alternative for that because the population is very diverse. So I think these are the 2 things that we've learned, right, throughout the world. One way to reinvent the core is to make it more core plus, which we've done with Brahma Duplo Malte. The other thing is reinventing the marketing mix and sales and marketing package to be attractive for a different demographic and to be an amazing alternative for people who are trading up for value, not necessarily premium consumers. I think that's the case for Skol that, that grew last year, right? J.J. was talking about not being a drag. It was the first year in a long time that Skol grew volume, grew market share. And it's because I think it found its way back to the core of what the brand is about.

Next up, [ Thiago ].

[ Thiago Haidri ] from Citi. Well, my question would be to Daniel. So the Bs matrix, the 3 Bs and the Spaten brands, they're really interesting. And I would like to follow up on that. So which of those brands do you think you have the toughest road ahead and maybe not only internal terms, but also viewing the competition since you separated them in little boxes, right? So which one of them do you think you have the toughest road ahead?

Thank you for the question. I think I am very -- I strongly believe in that strategy. We're talking to some people. A lot of people ask me about as well on the brands Skol and Corona, and I think J.J. already alluded to that. I think if you take a look, it's all a matter of the time horizon as well, right? I think Brahma has shown in the last years that it already has results to follow. I think Beck's has all the marketing mix in its favor to be the future of high end, but it's a more long-term bet. So that means that it could be more volatile, right? And that's why it's important to continue to invest in Corona, in Colorado, in Stella and Patagonia because things might change because it's a more long-term bet. Spaten is the opposite, right? Very early. We're very bullish on it, but it's early days. But I think out of these brands, the brand that has suffered more in the short term has been Budweiser, let's face the fact. And a lot of that we think credit to the scenario of COVID, right? And we really think that Budweiser has the foundations as one of the most amazing brands in the world, but it needs a more favorable scenario than, I think, we're facing right now. So I would say, I'm very, very -- I'm a big believer in Bud. Bud in the last 2 years has been more complicated than the other brands. But I would say that in this scenario where things are growing, where populations are dreaming, young populations are achieving and aspiring more, they are looking for a brand that has premium cues, but that does not necessarily challenge their palate. That's our thesis for Bud. And I think your question depends on the time frame, where we expect, I think, Bud faces a little bit of more resistant in the short term, but euphoria is helping or will help.

And just to complement very quickly, this -- the last few years that Bud had a more challenging scenario was pretty much because the platforms for Bud, international music, World Cup and things that we were not able to activate as much due to COVID. So that's just to add.

Next up, Leonardo.

Leonardo Alencar from XP. My question probably is for Lacerda but then connects to something that Lucas mentioned a while ago. I understand that in order to support this innovation process and to work with a bigger portfolio and maybe in order to work with different packaging, different sizing and new brands, the factories or the production side needs to be ready for that, right? And it's not something that you can change in the short term. So how long ago have you started investing on this industrial complexity, which is the comment that Lucas has mentioned a while ago? How long ago you started with that? And how that connects? How that supports? So I wanted to understand the process of how the industry, which is much slower than what we are discussing here, is ready for support this kind of innovation that we are talking about in the future.

Okay. I can kick things off here. I would say that over the last few years, the biggest investment we've made when you look at our capital expenditures, and break it down by, right, category of investment, the biggest one is precisely in supply, precisely to give ourselves not only more reach and more capillarity, Brazil, a country of continental proportions, but also to enable our production lines, be it primary packaging, be it secondary packaging, to have the flexibility to produce a broader spectrum of our portfolio. We had a first wave of this back in 2011, okay? And I would say that since 2019, we went back to really stepping up the level of investment behind supply reach. So for instance, in the last few years, a good part of our supply CapEx went into allowing more of our breweries to bottle the 300-milliliter returnable glass bottle, okay? So several lines were added in the North, Northeast, Midwest to be able to meet that demand with more flexibility. So it's the biggest package within our CapEx expenditure. It's supplied for capillarity and flexibility. Okay?

And just to add, internally, we have a multifunctional team dedicated to innovation. So everything that we do is aligned between the different areas. So supply has a big role to play within our innovation team so that we guarantee that whatever volume target we have or ambition we have is going to be -- we will be able to produce and deliver it, right? So we don't have any surprises during the whole process, innovation process. And this is part, again, of our innovation machine, as we call it here, having this multifunctional team.

And just to add that. So we made a big investment on our CIT, the Center of Technology in Rio de Janeiro. The last Investors Day was -- it was there, right? And another thing to add, it is that for a while now, our supply footprint has been much more designed for flexibility than to specialization. So in the past, it was really about one big line that would do like everything with most speed. Now we -- all the lines are much more flexible than we have before. So this expansion of the RGB bottles, in the past, the lines would just do one packaging. Now the RGB lines in the supply, they are prepared to do the [ 3, 1 ] liters and 600 mls and RGB. And so at some point in time, we really decided for the supply footprint to be flexible. It's a decision that we are investing in the short term, we are evolving, but it was [ thinked ] a while ago already.

For our last question, [ Leonardo Mayardo ].

So my question is more around inflation. I wanted to know which brands you think have been and will be impacted the most by commodity cost inflation and also with gas prices rising in terms of BEES. I know that you said that small bars were a big focus over the past couple of years of building relationships with small bars and small restaurants. And will the size of the bars and restaurants and your relationships with them be impacted by, obviously, you're going to want to load more supply onto bigger trucks and bring them to bigger on-premise areas? Is that going to affect your ability to distribute to these smaller bars and restaurants?

No, I think usually, the piece of the portfolio that suffered the most with inflation is always the value segment is the one that's suffering. I think that has the highest elasticity. We are seeing our core very resilient overall in the past years based on the work -- so the packaging strategy. The core plus is even more resilient in the premium and super premium more. So that's how we frame so the impact of inflation. Commodities overall, in general, it impacts across the board, right? And so -- yes, so the diesel is going up, so that's an issue. But somehow, we are talking about asset turnover, right? So we are talking about having a much more broader portfolio to deliver to small customers. So we are much more efficient. If you see the order, the number of SKUs that small retailers are ordering from us because of the available assortment, so they are more and more in the same order, adding more things. So BEES, in the end, it goes in the same trip that we had in the past already sending some beer. So somehow a way to mitigate it and to go over it, is the scale and our ability doing the same delivery to aggregate much wider portfolio.

And just to add on the commodity part of the question, another good way to think about it is less about what brand or group of brands tend to be more impacted, but packaging, right? Because if you look at our cost profile from a commodity perspective, the biggest commodity, right, is aluminum, followed by barley, right? So -- and that's why we have the hedging policy. So in the short term, right, we do have a good degree of protection from the latest swings upwards in commodities. But given the package mix and everything that Lacerda talked about today, the big focus behind returnable glass bottles, how relevant they are for the on-trade as the on-trade comes back, how relevant they are for our business, how we leverage D2C to bring RGB back into the home occasion, right? So all these things for us are opportunities that we need to explore to try to take advantage of this opportunity with, yes, one-way cans are more impacted by cost as opposed to RGB, and we see it as an opportunity. So I think it's less about the brands. I think it's more about the packaging. And I think there, we have the hedging policy and we have an opportunity in RGB.

Thank you for the question, Leonardo. This closes our Q&A session. I would like to thank all the analysts for the questions and thank all the presenters. You can please step down. I would like to invite Jean for the closing. Jean, over to you.

I think we have a slide, right? So that's it. Thank you very much. It was a pleasure to have you all here. So in the end, let me try to put the main ideas that we mentioned in this Investors Day here. We think we are in a new chapter. We firmly believe on that. To be just a beverage company, as you see, does not represent us entirely properly anymore. So these tech initiatives that we are saying we are much more with this vision of being a platform and really to connect this whole ecosystem that we have that is unparalleled. The relation that we have with suppliers, with customers, reaching consumers is really something that takes us to a completely different level, and we are really betting on that, a platform for us. So we are not just a beverage business. We are not a pure play in tech. So in the end, our play is very unique as a FMCG that is really transformed, transforming itself. We really want to make a statement that we're going to do a great transformation in our company, as Ambev has this power of dreaming. It's what we really want to do. We want to really have a different company. And a platform for us is about these 5 pillars that by decision and design, brands are elevated. We are a different company in terms of building a portfolio, touching consumers' heart, designing new liquids, having data to connect, being efficient in terms of media. So this is the pillar #1. Innovation is everywhere, and everywhere we are thinking about new ways to do things, not just in products, but business models and everything. This is the Pillar 2. BEES is a reality already, and it's really something that's transformation. It is not an option. It's the transformation of our core. We are redesigning the company to get this platform of customers really working. The consumer platform, the ability for us to have the direct relation with consumers and Z� Delivery and the ultra convenience and draftLine data is really our Pillar 4, is about more transaction and insights. So the Pillar 1 is about the top of the funnel, is was about love. The Pillar 4 is really about getting the transaction right with consumers, getting the insight granularity. So I think we are doing amazing on that. And the ESG is really something that is structural that we are betting, it's not new. Ambev was always ahead of the game on sustainability, and we are really thinking boldly on the social piece that I think we really can do a transformation in our whole ecosystem and get Brazil in a better place. We're trying to make the case of how this -- all this connect financially. I think the next quarters, in the next results, we're going to allude to what we have mentioned here about ROIC being the best metric, about our ability to take asset turnover to another level and our ability to innovate, and at some point -- and really putting ROIC up. We talked a lot about how we are in a better place with portfolio in beer. That is, structural changes and investments are behind us. We talked about NAB, that we are unlocking a lot of growth on the non-alc business. And Beyond Beer is just inclusive, incremental and profitable. Where is Dani here? I saw it from her, so -- over there. So it's a big bet. I think we are ahead of the game. I'm very excited about this opportunity. So that was pretty much it. Thank you very much. I hope you have enjoyed. So hope to see you in the market visits now. So I think let's try to -- if you -- if I can show you this in our customers already to see everything that we mentioned here happening in real life. And to end, we've been talking a lot about a platform that connects the ecosystem, a different culture that we have in our company, being more -- evolving the company overall. So NPS in the end is the moment that we receive feedback. We have NPS for everything, for digital products, for procurement area inside our company, for customers, for consumers, for NGOs. We have -- so I really would love to get your feedback on our Investors Day. So thank you very much. And I think after that, we will go to the market business, right, the video. So we have the last video. That is just the video of our convention, the Brazil strategy convention that we just ended, 6,000 people. 2,000, it was they were locally, 4,000 were at home. It was amazing to put everybody, to get everything that you saw here, it was very based on the strategy event that we had 1 week ago. So we have Ambev, 6,000 people really aligned with all the strategy that we have. So thank you very much, everybody, that is not here. And so let's see. Thank you very much for everybody that organized the event, so the team that put this in place. So let's see the video. Thank you. Bye-bye. [Presentation]