Fine Wines/Champagne and Spirits in Brazil

PROSPECTS

High-end products begin to gain traction amid economic recovery

Leaving behind the difficulties that the Brazilian economy faced in 2015/2016, the country’s new context of perceived stability and positive forecasts is gradually enabling consumption to resume its growth path. In 2019, some of the main manufacturers of fine wines/champagne and spirits registered reheated demand for the most expensive items, indicating the return of solid optimism that consumers finally expressed, especially in luxury whiskies and other luxury spirits.

Economic crisis and cultural changes challenge products related to celebrations

During the worst years of economic crisis in Brazil, the logic of austerity that prevailed in the corporate context was also reflected in the personal consumption of the most important decision-makers within companies. Amid the revision of priorities, cost savings, massive lay-offs and weakened demand, luxury consumption may sound too much of a contrast to the circumstances.

Conservative mindset is the new golden rule that luxury players follow to operate in Brazil

If some years ago it was common practice to launch megastores with ostentatious appeal, the lesson most luxury companies have learned with the ups and downs of the Brazilian economy is that it is worthy to start with conservative investments. Important players in luxury alcoholic drinks are working on-demand, only investing in the exact same proportion as their sales results, being orientated by organic growth.

COMPETITIVE LANDSCAPE

LVMH leads and takes advantage of luxury consumers’ appetite after some abstinence

As the main company among the luxury manufacturers of fine wines/champagne and spirits, LVMH Moët Hennessy Louis Vuitton SA maintained a strong leading value share in 2019. The company offers a diverse mix of products and does not invest in fashionable categories such as gin or other emerging products that are not positioned within the luxury parameters of prestigious high-end items.

Internet retailing sees different strategies gaining ground

The increasing online purchases of fine wines/champagne and spirits are making main players adapt their strategies and plan the management of this channel more carefully. Strong retailers of fine wines/champagne and spirits, such as Supermercados St Marche and Bebidas Imigrantes, are enhancing their e-commerce and apps to take greater advantage of this movement.

Promising outlook for imports in view of the EU-Mercosur trade agreement

Mercosur (the trade bloc comprised of Argentina, Brazil, Uruguay and Paraguay) has signed one of its most important agreements with the EU which aims to gradually reduce tax barriers among the respective countries and strengthen exports. One of the most challenging issues of working with imported products in Brazil is related to the difficulties in maintaining coherent price points in comparison to all other markets due to the elevated taxes.

Files are delivered directly into your account within a few minutes of purchase.