AB InBev, Solar Energy, and Real Estate

Welcome to Latinometrics. We bring you Latin American insights and trends through concise, thought-provoking data visualizations. Welcome to our 87 new subscribers this week!

Today’s charts:

1. A solar energy boom

2. AB InBev is Latin American at heart

3. What are the most expensive cities?

Don’t forget to check out the comment of the week at the bottom!

Energy ☀️

Tourists are not the only ones taking advantage of Latin America’s precious sunlight due to its tropical latitudes. During the last few years, demand for solar panels in the region has skyrocketed as panel prices decrease and efficiency increases.

The solar industry in the region is dominated by three countries: Brazil, Mexico, and Chile. In 2020, they accounted for more than 80% of the region’s solar photovoltaic (PV) capacity. Brazil’s installed capacity is expected to reach 10 GW by 2024, and Mexico finds itself on a very similar track. Similarly, as of last year, 4 GW installations were under development in Chile, with more authorized projects that will bring its PV capacity to 22 GW. Installed solar photovoltaic capacity in the region has grown about a hundredfold in little under a decade, topping 20 gigawatts in 2020.

While these three nations now dominate the industry, Latin America still has a lot of untapped potential: Argentina’s solar capacity quadrupled between 2018 and 2020, and Colombia is developing projects with a total PV capacity of 400 MW.

Beer Industry 🍻

AB InBev’s story is a masterclass of global brand consolidation. Perhaps you don’t know their name, but you’d be lying if you said you haven’t seen their products. The company produces and sells more than 500 brands worldwide, most of which are beers. Its entire history of mergers and acquisitions is hard to cover, but the 4 mentioned on our chart are the most significant in its quest for global domination.

Our research shows that the company’s Latin American division is its most significant. On our chart, you can see its massive volume growth and in 2020, it accounted for more than half of the company’s sales volume (volume, in this case, is actual liters of beer sold).

The company was officially born with the merger of Brazilian Ambev and Belgian Interbrew in 2004. Both companies were already huge in their territories, with smaller past acquisitions of local beer brands. Ambev is still publicly traded independently and is Brazil’s 5th largest company. AB InBev’s next target for growth in the region was the historic acquisition of Mexico’s biggest beer company, Grupo Modelo, for $20.1B in 2012. Since then, the yearly volume has increased 35%, and it sold 27 billion liters of beers in the continent in 2020.

Earnings data suggests that the company’s consolidation of North American brands hasn’t paid off quite as well. Since the merger with Anheuser-Busch (Bud Light’s makers), which put the “AB” in AB InBev, its yearly North American revenues have barely grown, and its volume has decreased 20%.

AB InBev’s crowning jewel as the world’s largest beer maker happened in 2016 when it merged with SAB Miller (Miller Lite’s makers); the deal was worth $100B.

Real Estate 🏠

A 2021 study revealed the most expensive cities to live in Latin America, measured by apartment square meter prices. The study also showed an overall decline in Latin American real estate value. Eight out of 14 cities saw price decreases compared to 2017 — an overall 0.5% decline across all cities.

With an average price of $3,441 per square meter, housing in Santiago, Chile, is the most expensive in the continent. That price would put a 150 m² apartment at above half a million US dollars. However, price increases in the city have slowed down from their explosive 7.32% growth in 2019 to merely 1.7% during 2020. Brazil’s Rio de Janeiro and Sao Paulo have seen price declines of 43% and 23%, respectively, since 2017.

On the other hand, three Mexican cities have seen the largest overall increase in residential prices. Real estate prices in Mexico City and Monterrey have increased 28% and 32%, respectively, since 2017. The biggest jump happened in Guadalajara’s (known as a Mexican tech hub) prices, which increased 47.5% in that same period.

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That’s all for this week 👋

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