Fine Wines/Champagne and Spirits in Brazil

PROSPECTS

Trading down continues to impact sales of more expensive products

Over the last couple of years, consumers have started to purchase and consume less expensive products. As a result of the economic crisis, many Brazilians opted to not spend significant amounts on a single fine wine or champagne bottle.

Growing competition from imported alternatives

Champagne has been facing pressure from both local sparkling wine producers and imported items. In fact, some imported sparkling wines are sold at a lower price than local brands.

Internet retailing increasing presence

Sales via internet retailing have increased over the last couple years thanks to aggressive pricing. Consumers are now researching prices more before making an actual purchase.

COMPETITIVE LANDSCAPE

Pernod remains the leader, but is losing sales share

While Pernod Ricard Brasil continues to lead fine wines/champagne and spirits sales in Brazil, the company has lost significant share in recent years. The company has been facing distribution issues in the country that have directly affected results.

Aggressive pricing boosts sales at the expense of image

Pernod had managed to boost sales of Mumm thanks to an aggressive pricing policy in previous years. However, this strategy also negatively impacted the image of the champagne brand, with many consumers no longer perceiving Mumm as being an exclusive option.

Pernod set to lose leading position

These difficulties are expected to continue affecting sales. Indeed, some brands are expected to be withdrawn from Pernod’s portfolio, thus putting pressure on its results.

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