CCU

  After a long but rewarding hike up San Cristobal's Hill, it was time for our final presentation of the day by CCU. CCU is a multi-category branded beverage company that distributes to Chile, Argentina, Uruguay, Paraguay, Bolivia, and most recently Columbia. The company first started in 1850 only distributing beer but in 1992 it branches out and entered other markets. The company's Deputy Officer of Investor Relations, Cristobal Escobar, was the representative chosen to speak to us about the company's recent growth and development.

     CCU is a mixture of domestic and foreign companies, some of which we recognized like Pepsi, Gatorade, Corona, and Heineken. Heineken, as well as Quiñenco, is a strong partner that is also main competition with Cristal, Chile's national beer. Both are distributed by CCU which means that they are in direct competition with each other. The question of how the company handles this was brought up by one of the students. Escobar explained that there are restrictions set on the salesman to help keep the two out of direct competition. For example, the salesman would only be able to sell one or the other.

   The next topic Cristobal Escobar discussed was inorganic growth. He expressed his companies interest in expanding into both the dairy and food market and possibly into more Latin American countries. The two biggest factors CCU looks into before expanding is the amount of short term affect and the possibility of maintaining a competitive balance. It has been difficult for them to enter the dairy market due to large competition and a lack of refrigerated transportation.

   By far the most interesting question asked was how much control the company actually has over a foreign product like Pepsi. While CCU can not change the product inside the bottle, it has full control over marketing and labeling. Escobar talked about a test that Pepsi that involved integrating their product into Latin America. According to Escobar it failed, which allowed CCU to negotiate full rights to advertising.

    CCU was a great preliminary company visit for Chile and definitely set the bar high for the next set of company visits. For the rest of my time in Chile I will be watching out for they're  products!