AMA is a mineral water brand under Ambev, which is a Belgian-Brazilian multinational drink and brewing company.
01 | Brief Summary and Key Facts
AMA is a mineral water brand under Ambev, which is a Belgian-Brazilian multinational drink and brewing company and a subsidiary of the largest brewer in the world that recently became a part of AB InBev. It is a publicly listed company with operations across South America and the Caribbean.
Location: HQ in São Paulo, Brazil, operating across 18 countries: Brazil, Canada, Argentina, Bolivia, Chile, Paraguay, Uruguay, Guatemala (which also serves El Salvador, Honduras and Nicaragua), Dominican Republic, Cuba, Panama, Barbados, Saint Vincent, Dominica and Antigua.
Founded/Launched: 1999
Size: R$ 2.45 billion - T2 2024
Sector: Beverages
Legal form: Publicly held corporation incorporated under the laws of the Federative Republic of Brazil.
Main products: beers, soft drinks and non-alcoholic and non-carbonated
Highlight of their unique approach
Ambev launched and continues to operate AMA Water, a social business, as a corporate social responsibility strategy.
Highlight of their unique design
As a social business, AMA converts all profit from sales into projects addressing access to water. The sales strategy is defined within the commercial unit and the impact strategy is defined with a group of external stakeholders.
AMA Water
02 | Founding Story
Launched in 2018, AMA operates as a social business and channels 100% of its profits into projects that address water access issues. After participating in an immersive social business training, Ambev decided to focus on access to water, because it has direct relevance to their core operations (water constitutes over 90% of beer production) and because the Brazilian population faces barriers to accessing water. This alignment was both strategic and natural: as a beverage company, Ambev could easily use their capacity and expertise to create a new business entity. Today, AMA offers water in three sizes: 1-litre bottles, 500 ml bottles, and 350ml cans.
03 | Regenerative & Redistributive Strategies and Actions
AMA's impact projects began in semi-arid regions. They started in the state of Ceará, due to its water stress and have subsequently expanded to urban peripheries and indigenous communities. During the first year (2018-2019) it impacted approximately 5,000 people through drinking water systems in rural communities (cisterns). Since then, it has expanded its reach to 1 million individuals through projects and partnerships. The strategic approach and decision making is informed by thorough diagnostics, which identifies stressed water basins in Brazil and its local impacts.
The COVID-19 pandemic highlighted the urgent need for potable water in urban centres. This need drove AMA to extend its efforts to cities like São Paulo, Rio de Janeiro, and Belém, where sanitation issues are particularly concerning. For instance, Belém faces severe challenges in access to potable water and basic sanitation. AMA responded with scalable solutions such as clay filters and water filters, drinking fountains and hydration points (equipment) for community use.
The clay filters initiative alone has impacted 360,000 people. The drinking fountains and hydration points reach approximately 690,000 individuals in the urban outskirts of São Paulo and Rio de Janeiro. The equipment is for community use and local associations have become responsible for maintenance, although AMA continues to provide monitoring and financing.
This last element is considered a hallmark of AMA. AMA fosters startups and innovative solutions tailored to community-specific needs. This long-term commitment is provided with a minimum guarantee of five years, ensuring ongoing monitoring routines and financing.
Once AMA impact ambitions were reached in the last years, Ambev has evolved its global impact strategy. Now the strategy is focused around Productive Inclusion, addressing income insufficiency through employment and entrepreneurship. Ambev has established a HUB of solutions and initiatives with AMA providing essential resources that enable economic and social development.
AMA Water facility
04 | How the Deep Design Enables Strategy and Action
There are some foundational factors and principles that allow AMA to remain committed to its mission and continue distributing 100% of profits into impact projects: Commitment to the purpose, business model, and dedicated resources. The vision of the Ambev CEO at the time was shared and embraced by the different areas of the company. AMA was established as a social business, where all profit is converted into impact, instead of distributed with shareholders. A dedicated team was established, along with a group of stakeholders to help influence the strategies of impact and decision making. Over time, that team evolved and became a new directory of Social Impact, under the VP of Corporate Affairs and Impact.
There are additional elements of governance and deep design of the business that position AMA as a pioneer in the Brazilian market.
Stakeholder Engagement & Decision Making
AMA's expansion strategy prioritises urban centres and indigenous communities, emphasising respectful integration. Collaborations with established organisations, led by community and local leaders, ensure community involvement and ownership. Strategies are designed with stakeholders at periodic committees. Many of the stakeholders have been with AMA since the beginning. For instance, the current committee is formed by Raull Santiago, Fundação Avina, Deep, Florescer and Água Camelo.
Operational & Strategic Decisions
Due to the product requirements and market barriers, there are challenges in expanding AMA's market presence, particularly in the North and Northeast regions of Brazil. Efforts to partner with suppliers in the North and Northeast were unsuccessful due high costs, so the impact strategy couldn’t integrate the production and supply chain itself. For that reason all the suppliers and partners are based in the Southeast (São Paulo/Rio de Janeiro states). Thus, the strategy has centred on integrating existing structures to manage costs effectively, and then strategically directing a big part of the revenues to projects creating positive impacts in the Northeast and North regions.
Product Performance and Market Adaptation
Though AMA did not have the same profitability profile as other divisions of Ambev, leadership also recognized that the new product line did not cannibalise existing offerings. Once it was understood that the product added net new revenue streams, leadership and shareholders were supportive. Still to this day the profits are untouchable.
Financial Governance & Commitment
Initially, Ambev considered establishing a foundation/institution to have a social impact. However, the decision was made to integrate it within the existing business structure to ensure comprehensive oversight. AMA is closely monitored and aligned with the commercial team's sales goals. Despite operating under a unique P&L, AMA maintains financial transparency with separate accounts. KPMG has been auditing the operations from day one, ensuring that profits are allocated correctly. To date, the company has invested 10 million Reais, averaging 2 million annually.
AMA Water distribution
05 | Reflections and Lessons for other Businesses
For large global corporations that are publicly listed, it can be difficult to transform the deep design of the business - especially the ownership or governance model. However, Ambev shows that it is possible to take an ambitious approach to prioritising social and ecological goals in the deep design of a subsidiary, as it has in the case of AMA. It was especially important for AMA to embed a social purpose, and then channel all profits to pursuing this purpose. There are a diverse range of models that enterprises could embody across design layers. Companies of all types have the potential to pursue more ambitious models through a creative process of shaping the deep design of select subsidiaries.
This case study was researched and written by Rui Peixoto Lira in collaboration with DEAL.
