Ambev’s Undisputed Leadership in South America Should Protect Its Wide Moat

In 2000, 3G Capital merged two Brazilian brewers, Brahma and Antarctica, creating Ambev. Like its majority owner, InBev, Ambev acquired brewers throughout Central and South America and is now the largest brewer in Latin America. Ambev has monopolistic positions across regions, including 60% beer market share in Brazil, over 65% in Argentina, El Salvador, and Uruguay, and over 70% in Bolivia. With this, Ambev enjoys significant fixed cost leverage and procurement pricing power. This is reflected in the firm’s excess returns on invested capital and superior working capital management and cash cycles.