One of Brazil's most innovative soft drinks producers is revolutionizing the market with new sodas and juices, planning and packaging. With quality approved by consumers and multinational beverage giants alike, this company shows that the biggest is not necessarily the best - especially when put to the taste test. Reuben Ford reports.
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Ultrapan Indústria & Comércio Ltda is the company behind a range of household names in juices and specialist sodas. In a field dominated by some of the most powerful brands in the world, the dynamic Brazilian player turns to innovation, strategy and above quality to achieve its goals.
Breaking into the market by winning the license contract for Tampico juices in the southeastern region of Brazil, Ultrapan has built up a diverse portfolio, which appeals to taste buds throughout the country. Characterized by its pioneering attitude and market confidence, the company is increasing production and investing in infrastructure and its drinks.
Commercial Director, Nuno Almendra admits it is no mean feat: aside from competition, Brazil is plummeting into one of the worst economic crises for years. Despite the market conditions, he has an extremely bright outlook powered by exotic juice blends, energy drinks and even a hangover cure in a can. “Our strength is our innovation and great tasting products. We do not get into price wars – taste is top of our list.”
From Daily Bread to Drinks Distributor
When Ultrapan opened its doors in 1990, its core business was the food industry: bread and baked goods. Opportunity however, soon came knocking. In 1999, Tampico Beverages, one of the world’s leading manufacturers of juice drink concentrates was expanding operations from the United States and looking for licensees in South America. Through hard work and commitment, Ultrapan won the contract for São Paulo and Mato Grosso do Sul States.
“There was a dramatic shift in focus. Ultrapan is the largest Tampico licensee in Brazil – beverages became our business,” Almendra says. The company began building its own range of soft drinks, benefitting from the experience in production, sales and distribution from Tampico.
The isotonic sports drinks, juices, teas and energy drinks are a huge success throughout Brazil, with Ultrapan’s own brands available in the whole country and even exported to Latin America.
In 2002, the company moved to new premises in Valinhos, São Paulo to accommodate growth. The 16,000-square-meter facility, which employs 220 staff, is one of the most modern in terms of production technology and quality control standards in the industry.
“The new factory increased our production capacity and allowed space for greater innovation, the heart of our company. We began manufacturing more drinks, identifying niches in the market and pitching for co-packing contracts. The proof of our quality and taste is affirmed by our current co-packing contracts with companies like Nestlé, AmBev, Schincariol and the Petrópolis Group,” Almendra says.
Co-packing contracts began in 2007, Ultrapan produces Nestea (for Nestlé) and Fusion Energy Drink (for AmBev), for example, which are best-sellers in the Brazilian market. Today Ultrapan is proud to be the third party producer for leading brands and the partner of national and multinational companies. It has also expanded production to include potato chips and candy.
With quality that always passes the tests of the most rigorous consumers and companies, Ultrapan emulates the concept of the group of twelve companies to which it belongs. The diverse operations maintain synergy and mutual problem solving and industry standards regulations.
Innovation on the Up
Ultrapan made its mark through revolutionary products. Dr. Up (Doctor Up), launched a year ago is the industry’s first hangover cure drink. Following the vein of energy and sports recovery drinks, Dr. Up contains ingredients to combat dehydration, fatigue, headaches and nausea caused by excessive drinking. The latest addition to the company’s portfolio fills previously unexplored gap in the market, being the first of its type and appealingly marketed under the slogan: “Drunk too much? Call the Doctor.”
Another product line, Ken Up, is one of the first mixed fruit juice drink (made from fruit pulp concentrate) sold in Polyethylene terephthalate (PET) bottles. “Juice drinks are commonly sold in cartons (Tetra Pak). Innovative packing allows faster production and a market novelty that has made Ken Up one of our leading products,” Almendra adds.
As an own label, Ken Up has the competitive advantage that Ultrapan can commercialize the drink throughout Brazil. Tampico licensing restricts sales to São Paulo and Mato Grosso do Sul. The company was the first Tampico licensee in Brazil. The brand is of historic and commercial importance, as one of the best sellers, together with Power Boom Energy Drink, which is a market leader in Pernambuco and Paraíba states in the northeast. Despite this, Almendra reveals “…our strategy now is to develop Ken Up… to turn it into the flagship drink.”
Production and innovation are priorities. With the exception of Power Boom Energy Drink (available in 500-milliliter, 1-liter and 2-liter bottles), which is manufactured by a copacker, all of Ultrapan’s drinks are made at the Valinhos plant.
“Top technology is a given, our true differential is in our thinking beyond the expected,” Almendra says. Research and development at Ultrapan is the responsibility of an appropriately named Innovation Committee. In addition to Almendra (Commercial Director), the committee comprises partners, marketing manager, industry manager and is headed by Business Development Manager, Aline Melloni. The committee meets monthly to discuss opportunities and viability of new products.
Melloni travels extensively researching international products and assessing their feasibility in the South American market. Together with the committee, she questions and defines new possibilities, before approval and establishing a production pipeline.
Distribution covers all Brazilian territory, with 170 distributors accounting for 50 percent of sales. Key accounts and direct sales to retail and food service chains make up a fundamental network and platform for growth.
“We are a small to mid-size enterprise. We cannot take on the multinationals (in fact, we produce for them). Our aim is be competitive on quality. Our prices reflect quality and taste. Our juice Frutaria is a premium product, which costs more than others on supermarket shelves, and whose price is excellent value for the quality of the drink,” Almendra exemplifies.
Ultrapan exports Ken Up, Frutaria, Dr. Up, Power Boom Energy Drink and K2 Guaraná recovery drink to other Latin American countries. Almendra also reveals plans to produce 100 percent juices for exportation, but emphasizes, “the current focus is the domestic market.”
Marketing incentives inviting consumers to taste the difference at outlets have boosted sales. Almendra also cites distributors, promotions and value for money as important factors in the company’s increasing revenue and annual growth.
Ultrapan reported revenue of R$80 million in 2014 ($26 million) contributing to the group’s R$450 million ($150 million).
Crisis is not stopping the company that has revolutionized Brazil’s soft drinks industry. Wetting the consumer’s appetite with concept, taste and packaging innovations, Ultrapan is an oasis among small companies, whose ideas are running dry.
The portfolio speaks for itself. The economy may be lacking inspiration, but Ultrapan is taking the challenge in its stride. Making the necessary adjustments, the company is powering ahead, giving the market an energetic taste of innovation and force for recovery.