CCU—The Pisco Opportunity
Compañia Cervecerias Unidas S.A. (CCU), the leading player in the beer and beverage business in Chile ,is evaluating the feasibility of entering the Pisco (hard liquor from special grapes) business in Chile. The market is very competitive and divided between two very large traditional cooperatives. These two companies, with their broad brand portfolios, control over 90% of the market. In recent years, the Chilean market has started to change. Consumers are becoming more sophisticated and are opening up to new lifestyle beverages. The retail industry is going through a process of fast transformation with the appearance of new formats (e.g., Internet, kiosks, and hypermarkets) and consolidation through mergers and acquisitions. CCU is a powerful player in the beverage industry. It has strong brands, channel access, and merchandising power.
This case provides extensive information about the Pisco industry at macro, as well as competitors', level. The case serves primarily as a tool to introduce students to the use of Porter's Five Forces model, and other Industry Analysis tools. It is designed for an introductory class in Marketing or Business Strategy for both undergraduate and graduate programs.