Ambev to launch Brazil's first canned water by year-end, executive says

SAO PAULO (Reuters) - Brazilian beverage firm Ambev SA ABEV3.SA will launch its first canned water by year-end, following a global trend to step up recycling and phase out plastic containers as consumers shift toward greener alternatives, a company executive said.

The move is part of a push by parent Anheuser Busch InBev ABI.BR to adopt more sustainable practices, and comes as other multinationals, such as Coca-Cola Co KO.N, PepsiCo PEP.O and Nestle NESN.S also launch canned water elsewhere.

In Brazil, Ambev will start using its breweries in the southeastern state of Rio de Janeiro to produce its water brand AMA in aluminum cans to be distributed countrywide, its head of sustainability, Richard Lee, told Reuters in an interview.

He declined to elaborate on upcoming investments, but said the canned water is likely to go on sale at a lower price, despite higher costs of production than plastic bottles.

“The cost is higher, but what matters to us is the impact,” Lee said on Monday, adding that Brazil has the world’s highest rate of aluminum can recycling.

“Not only aluminum cans are largely recycled here, but they are also a source of revenue for thousands of families.”

More than 97% of aluminum cans used for beverages in Brazil are recycled, says the domestic association of aluminum can manufacturers (Abralatas).

“For 2020, we expect our canned AMA to sell more than the total volume sold in 2017 and 2018 with the traditional plastic bottles,” Lee said, adding that the company sold more than 12 million units over the two-year period.

That is a tall order. In the first half of 2019, Ambev sold 3.4 million bottles of AMA water, it said in its latest earnings report.

Despite the enthusiasm for the new packaging, Lee emphasized that Ambev does not plan to completely eradicate use of the plastic bottle, at least for now. But the trend toward aluminum cans is also gathering pace among its beer brands.

Reporting by Gabriela Mello; Editing by Clarence Fernandez