Positive growth prevails in 2013
Chilean alcoholic drinks registered strong volume growth in 2013. Sales grew in part due to the stability in the Chilean economy, which meant consumers had a greater amount of disposable incomes to spend on their favourite drink. Chileans increasingly preferred beer to wine, while products such as whiskies, vodka, and RTDs/high-strength premixes all added dynamism to the overall alcoholic drinks landscape. Rum continued to rapidly lose share though, adding a layer of complexity to the otherwise healthy picture.
Rum continues its dramatic decline
Rum is clearly no longer the “it” drink in Chile as sales growth decreased dramatically for the second consecutive year. The category witnessed strong growth in demand every year until it reached an historic peak in volume terms in 2011. Since then, sales fell dramatically with the average unit price at its lowest since the year 2000. What took rum manufacturers and distributors over a decade to develop came undone in just two years. The most direct explanation is linked to the zero tolerance drink-driving law as consumers were forced to modify their habits. However, that does not explain the continued strength in sales for spirits such as whiskies and vodka. The more likely explanation has to do with the Chilean habit of trying new products, and then quickly abandoning them if they become too popular or if they become stigmatised with use by lower social classes. Regardless, the stunning fall illustrates the power of the consumer in shaping the environment.
Cía Cervecerías Unidas SA remains the most important player
Commanding over half of alcoholic drinks’ volume share, Cía Cervecerías Unidas SA continued to lead overall in 2013. This company is quite diversified as it is the leading player in beer and is one of the leaders in spirits and RTDs/high-strength premixes. However, it continued to witness its share decline due to increased competition from imports and domestic lager. Within wine, Viña Santa Rita SA takes the top spot on a domestic level for the first time in history over the global giant Viña Concha y Toro SA. Nevertheless, the tepid growth in still light grape wine illustrates the work there is to be done to revitalise this drink.
Chileans continue to overwhelmingly prefer off-trade channel consumption
The off-trade channel strengthened its positioning in 2013, due largely in part to the zero tolerance drink-driving law enacted 2012 as well as the typical drinker’s preference to save money by consuming at home or at social gatherings with friends and family. The channel consists of neighbourhood liquor stores and the popularity of these for buying beer plays an important role. Many Chileans have a limited number of returnable bottles on hand and prefer to buy using that format as it is cheaper. It is easier for most people to go to a neighbourhood store with a few bottles when they want them than to bring many bottles on a bi-weekly shopping trip. The proximity to residential areas coupled with the law clearly persuaded Chileans to continue entertaining at home rather than drive to a bar or restaurant.
Mixed growth forecast
In March 2014, returning President Michelle Bachelet announced her proposed tax reforms. One of the modifications included higher taxes based on the grade of alcohol. Such a reform would have an extreme impact on products such as spirits, increasing the price by as much as 35%. If the reforms are approved, consumers might be expected to migrate not only from more premium products such as whiskies but also to more economic brands within pisco. Nevertheless, the reforms encountered immediate opposition upon being announced and it will be difficult to predict what the outcome will be. Meanwhile, in beer, another category that should outperform alcoholic drinks as a whole, imports and other premium beers will be the drivers of growth.
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The Alcoholic Drinks in Chile market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Alcoholic Drinks in Chile?
- What are the major brands in Chile?
- Have there been any alcoholic drinks legislative changes over the past 12 months?
- How is the alcoholic drinks industry affected by the recession?
- What is consumed more; beer, wine or spirits?
- What have been the key trends seen in new product developments?
- Do alcoholic drinks consumers want value for money or added value?
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This industry report originates from Passport, our Alcoholic Drinks market research database.