Artisanal Beverages as a FEM

Running head: Artisanal Beverages as a FEM in Latin America

Artisanal Beverages as a FEM in Latin America

Julio E. Lorenzo
Business, Government & Society

Artisanal Beverages as a FEM

Abstract
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Artisanal Beverages as a FEM

Artisanal Beverages as a FEM in Latin America

After swindling around with some ideas, I have set out on developing my thoughts on
Artisanal Beverages as a Fast Expanding Market. On the onset of my dialog, I will be
focusing on two different kinds of beverages (Juices & Local Beverages). Due to their nature,
most of them are already produced for local markets. Instead of presenting one specific
geographic location, various examples will be given on their growth in Latin America. With a
special emphasis on indigenous drinks, which have very distinctive profiles due to the
specific customs of every place.

What I like the most about this SEM is that it allows me to demonstrate my worries on
identifying this kind of markets for further exploitation. A point easily seen on the fact that big
companies are leveraging on the ideals of artisanal products to gain a marketing edge. As
Eric Melloull, Verlinvests Fund Manager said: Despite what all my friends at Coke, Pepsi
persist in telling me, those guys are still not cracking the innovation game. Its hard when
youre focused on a big brand to deliver small brands, but it will be years before they can
catch up with the young entrepreneurs, (Bouckley, 2014). Given their lack of innovation as
to effectively grow, big beverage companies are looking up to marketing stunts to gain
market share, damaging the efforts of the people working really hard to sell their handmade
products on an easy to take-over market.
The Artisanal Wave
What is Artisanal?

Artisanal Beverages as a FEM

Artisanal refers to a lifestyle one devoted to a craft. It implies that the product is made with
expertise, care and real ingredients. An artisan is a craftsperson who has developed their
crafts to such expressive levels as an artist. (Mahoney, 2014)
Being aware of fakes
Marketers have used the word artisanal as a gimmick to incentivize sales and increase
profits. Some might say that term has been stripped out of its meaning due to its overuse by
companies who don't quite cater to the promises of artisanal products. This is why theirs is a
need of really discerning the reality between real artisan work, and plain fallacy.

In order to be clear, we will consider artisanal products (Beverages) those done on a small
scale and which are produced with high quality in mind. Products not made on huge
factories, but by the hand of local entrepreneurs. Having the luck of starting out being made
at a low cost. As their producers profit from their skills to make their products, rather than
from huge capital. Even taking place as extra sources of income, such as in the case of
housewives preparing ponche.

What makes Artisanal Beverages Attractive

Due to the characteristics of artisanal beverages, Millenials are prone to liking and engaging
in the purchase of these kind of products. And as said by Seedstrategy.com, For marketers
everywhere, theres no consumer segment hotter right now than Millennials. From their exotic
tastes and to their unique spending habits, Millennials are shaking things upand fast.
(Young Lee, 2014)

Artisanal Beverages as a FEM

Both Juices and local beverages attract young generations, as they veer towards a healthier
living and a more self concious lifestyle (embracing their own culture).

Design
Nowadays people don't only want to buy the stuff that has good quality or good ingredients
but they also want products that look good. The main thing on this is that the care put out on
artisanal producers translates into good design on their design. Having a nice looking
packaging design for example, helps catch up the buyers eyes thus increases their
willingness to buy. Even the vernacular design of local beverages make up for a trendy and
unique package, with a rich story of its own.

Quality
Another thing making these products shine, is their quality. Being produced as homemade
substitutes, their quality tends to be that of the highest end. Also, high availability of quality
produce in Latin America aids on the delivery of high-end natural products.

Cost
As previously stated, due to the way that these products are concocted there is a tendency to
produce at a low cost. Also due to the own nature of the beverage products presented here,
the cost of raw materials is quite low, even more so for the region portrayed where fruits and
local produce is as cheapest as it might be.

Artisanal Beverages as a FEM

The Beverages
Juices
All through Latin America, theres a spreaded out custom of drinking juices out in the street.
This has been an activity that has been typically maintained by street vendors who use to
gather fresh fruits, to prepare your juice on the go as you order. This shows the humble
roots of this market.

As lifestyles have changed, these previously popular juice business has started to shift into
more consolidated and formal ones. With the wave of organic and healthy foods many
specialty shops have started to sell naturally prepared juices. If your where not assiduous to
street vendors, you would you just go to supermarket to purchase your previously processed
juices. manufactured Products, Freshness has been lost on the process. The natural
benefits of fruits I Have started to support a new kind of industry, One that is based on
preparing juices on demand or on a daily basis.

IMG 1. Juices Being Sold in Colombia. | Source: http://www.gentedecabecera.com/2013/07/volvieron-las-ventas/

IMG 2. Juices Being Sold in the Dominican Republic | Source: http://www.scandomelao.net/
IMG 3. Juices Being Sold in Mexico. | Source: http://www.myhealthycocina.com/health-news/

Artisanal Beverages as a FEM

Now, using processes such as cold pressing, small shops have sprung up quickly gaining a
place in the market. These new production methods allow shops maintain the artisanal
quality of the streets juices while producing large quantities for distribution.

Even thought data for this market in Latin America is very hard to find, a quick look at Google
Trends shows the high traffic on searches for the term Juice Beverage on their platform; a
good indicator of the prevalence of the topic on this region.

IMG 4. Searches for the term Juice | Source: https://www.google.com/trends/explore#q=%2Fm%2F01z1kdw

Localized Beverages
On a more indigenous way, there is a market ongoing with beverages that are based on the
cultural identity of specific regions inside Latin America. These beverages are delighted by
the inhabitants of the whole region, on a country by country basis.

Mamajuana
A great example of this is Mama Juana. Mama Juana is a local beverage from the

Artisanal Beverages as a FEM

Dominican Republic. It is based on a mixture of herbs and spices together with good aged
Dominican room. Many people think of the beverage as an aphrodisiac but locals also enjoy
it as a dessert. It has found an amazing clientele with tourists, which think of this product as
an elixir from Paradise.

The product is locally made by artisans, who use their longtime experience and the recipes
that have been given away from generation to generation to come up with and already
standardized concoction. Which is very difficult to imitate from producer to producer. Workers
introduce the herbs in special glass bottles and are sold in that manner.

Herbs are manually dried and selected looking on for the best quality in them. Makers look
after high-quality herbs in order to achieve the correct taste and aroma of the true Mama
Juana.

The product is sold dry. That means that they sell the bottle with the herbs but without rum.
Therefore rum is a complementary product to Mama Juana, a beverage that can be easily
acquired in any place in the Dominican Republic at a very low cost and of quite good quality.

Artisanal Beverages as a FEM

IMG 5. Mama Juana Bottles | Source: http://www.enterato.com/

IMG 6. Mario El Tiburn selling his Mama Juana | Source: http://www.enterato.com/

The product creates such a fanfare that one can easily buy a package of Mama Juana Herbs
on ebay.com for the not so cheap price of USD 27.95:

Artisanal Beverages as a FEM

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IMG 7. Mama Juana on Ebay | Source: http://www.ebay.es/itm/MAMAJUANA-APHRODISIAC-DON-RAMONDRY-HERBS-W-PINEAPPLE-FILLS-A-1-LITER-BOTTLE-/271661696397

Ponche de Crema
Similar to eggnog all along the Caribbean and most of southern America people drink
Ponches on a seasonal base. During December it is quite common to find this product being
sold everywhere. You can get them in supermarkets and specialty stores always coming
from artisanal hands. Housewives and specialized producers start out early in September to
produce these drinks, in order to sell them during high season

The delicious drink is made out of eggs, condensed milk, rum and herbs. Lately and due to
increased innovation by producers, Ponches are being flavored with chocolate, Dulce de
Leche and other additions. Supplied with empty glass bottles, these are filled up with the
finished product and later decorated along a Christmas spirit.

The drink is bought by lovers, and given as gifts to people you care about in the Christmas
season. As of late, a huge market has sprung up especially in Dominican Republic, Puerto
Rico, Colombia and Venezuela for the sale of this product.

Done as an Informal business, there is no quantitative information out there of its existence
and growth. Nonetheless a quick search on social media platforms such as Facebook or
Twitter, will present you up with an incredible amount of people posting adverts on the sale of
these products.

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IMG 8. Search for : Ponche Crema in Twitter | Source: http://www.twitter.com/

IMG 9. Search for : Ponche Crema in Facebook | Source: http://www.facebook.com/

Issues with Capturing these FEMs

I believe looking up for quick and exploding niches is a lifestyle for many people. For most of
us living and being brought up in underdeveloped countries the sensibility towards finding
new things to develop is quite high. We are continuously thinking about riding new
tendencies in a constant race to make up some profit. Its a way of living that has carved
onto our culture.

Being a common way of thinking, finding these small spaces has become a way of
subsistence for many people. Thats why I came up to a bit of discordance on the whole
purpose of tethering up developing societies to profit from what I think is their own struggle. I
guess there is a point where seeding capital to "popup markets" could get to damage the
growth of the people involved in it. Because of the social issues this might carry, I find it quite
important to define the point where it would be appropriate to influence the market with

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extended capital.

After I made my question, you were trying to go further a bit on explaining it out. But I didn't
actually manage to understand your point of view on the issue. Could you share with me
your thought on how would an injection of capital benefit the people who are actually
developing these markets? Because I believe that due to their size, any attempt to take
shares would only lead to lesser profits for the people thus reducing their capability to further
develop.

I believe that the magic of fast expanding markets, lies in their spontaneous nature of growth
and their flexibility to change + the lack of fear of its participants towards failure (As most of
them are thought of as temporary). And onto the investor side, would it also be wise to invest
into markets that are thought of as volatile by its own participants? Or you are just thinking of
tracking trends to be ready to invest into them as soon as they mature?

How to approach this FEM

Following my previous debate

Bibliography

Bouckley,B.(2014,May19).BeverageDaily.com.RetrievedJune14,2015,from
Coke,

Artisanal Beverages as a FEM

PepsiTheseguysarentcrackingbeverageinnovation:EricMelloul,Verlinvest:
http://mobile.beveragedaily.com/Manufacturers/CokePepsiarentcracking
beverageinnovationVerlinvest#.VXNnxOqqko

Mahoney,K.(2014).America'sArtisanalMarket.LuluPress,Inc.

YoungLee,R.A.(2014).SeedStrategy.com.RetrievedfromSeedStrategy:
http://seedstrategy.com/accelerator/infographic/

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