Brazil: Medium-sized brewers carving out market share by targeting premium segment

While overall beer production in Brazil has remained steady at around 15 billion litres over the past three years, according to the Ministry of Agriculture’s 2025 Beer Yearbook, medium-sized brewers are carving out a market share by targeting the premium segment, introducing new flavors, seasonal offerings, and niche products, such as non-alcoholic beers, Valor International reported on September 30.

A survey by Abracerva (Brazilian Craft Beer Association) showed that smaller breweries produced 220 million liters in 2024, accounting for 1.4% of national output. However, the sector’s economic weight extends far beyond volume, says Abracerva President Giba Tarantino.

“The industry, made up of small and medium-sized producers, generated around R$4.4 billion in 2024, from the factory to the point of sale. When we consider the revenue from bars and restaurants, including pairings with dishes and snacks, this figure can be up to ten times higher,” he notes, adding that the beer chain supports roughly 2.5 million direct and indirect jobs across the country.

With a brewery in Três Rios, in the countryside of Rio de Janeiro, Hocus Pocus has expanded its production by introducing new recipes and concentrating on the Rio-São Paulo corridor. The company now employs 80 staff members and sells through more than 800 points of sale. “We produce about 1 million liters per year. In 2025, we expect to reach nearly 1.5 million liters, 100% of which will be our own production,” says partner Pedro Butelli. The company reported revenues of R$20 million in 2024 and projects R$25 million for the current year.

Founded in 2014 by Mr. Butelli and three other partners—Vinicius Kfuri, Alida Walvis, and Bruno Mansur—the company was born from a professional pivot. “I was doing my doctorate in economics at FGV and teaching at the university’s law school, while Vinicius was a trader at an investment bank. At a certain point, we decided to drop everything to create Hocus Pocus,” recalls Mr. Butelli, now the company’s CMO and creative director.

The fixed portfolio includes six labels, led by Orange Sunshine, a blonde ale with orange that has become the brewery’s top seller. Each month, Hocus Pocus launches up to four new seasonal or limited-edition recipes. “The regular beers account for 90% of sales, and Orange Sunshine alone represents 40%,” says Mr. Butelli.

Since its founding, Hocus Pocus has created more than 400 beers. Prices for the regular labels range from R$15 to R$25 for 500 ml bottles, while seasonal offerings typically sell for around R$40 per can. Bars and restaurants account for most of the company’s revenue, generating 58% of total sales. “We are growing about 40% per year and improving our margin,” Mr. Butelli notes.

In Minas Gerais, Krug Bier has built its reputation on draft beer, offering 22 varieties that range from a traditional German Pils to Ignorância, a double IPA with a 10% alcohol content, along with a newly launched non-alcoholic version. Craft styles account for about 25% of the brewery’s production and sell at prices roughly 40% higher than traditional pilsners. The Minas Gerais market alone accounts for more than 90% of its sales, with distribution in over 1,000 points of sale throughout the state.

Non-alcoholic beers are one of the fastest-growing segments in the industry. According to the 2025 Beer Yearbook, production volume surged 537%, rising from about 119 million liters in 2023—when it accounted for just 0.8% of national output—to 757 million liters in 2024, representing 4.9% of all beer produced in Brazil. “We aim to avoid the sweet taste common in this type of product,” says Austrian Herwig Gangl, one of Krug Bier’s founders, referring to the brand’s newly launched non-alcoholic label.

Founded in 1997 in Belo Horizonte, Krug Bier emerged from the experience of Mr. Gangl and his father, who had recently sold the family’s regional brewery in Austria. While visiting Brazil, they stopped by the Albanos beer hall and conceived the idea of combining European brewing traditions with the culinary expertise of partners in Minas Gerais to launch one of the country’s first brewpubs.

“The investment far exceeded the initial budget, mainly due to construction costs and dependence on imported equipment and supplies. The real’s devaluation also created challenges, but it did not prevent the brand from establishing itself,” says Mr. Gangl.

Today, the brewery employs around 120 people and produced 60,000 hectoliters in 2024, generating approximately R$60 million in revenue. “We revised the projection for 2025 to moderate growth of 3%. We have seen a certain decline in the on-trade market [bars and restaurants], as a result of economic performance falling short of expectations and a hangover from the post-pandemic boom of 2023 and 2024,” he notes.

This shift in the sector follows a trajectory marked by both advances and setbacks. Between 2010 and 2020, the number of breweries registered with the Ministry of Agriculture and Livestock (MAPA) soared past 2,000. But the pandemic disrupted this cycle of growth, shutting down bars and restaurants—the primary sales channels for craft beers—and leaving a lasting impact on the market. “Many breweries went into debt, importers drastically reduced their portfolios, and the glut of labels competing for limited shelf space ended up suffocating those without a well-defined strategy,” says Douglas Salvador, CEO of Clube do Malte, a subscription service offering more than 1,000 premium craft beer labels.

The company itself produces 500,000 bottles a year, but Mr. Salvador says it, too, was forced to restructure after the 2020 health crisis. “We remodeled products, focused on conversion campaigns, increased margins on strategic items, cut costs aggressively, and renegotiated all supplier contracts. We literally took a step back to be able to take two steps forward,” he explains.

For Austrian brewer Herwig Gangl, who launched his first brewery in Europe, there is a fundamental difference between the European and Brazilian markets. “In Austria, beer is seen as food, not as a tasting product. Per capita consumption exceeds 100 liters, but the space for craft beers is minimal. That’s why I see more future in Brazil than there,” he says, adding that the biggest challenge in Brazil is “labor productivity, which is still far from European and U.S. standards.”

01 October, 2025