Luxury Alcohol in the BRICs: How the BRICs Are Reshaping the Luxury Alcohol Industry

Introduction

Scope

Objectives of global briefing

Key findings

Global Wealth and Luxury

Global luxury market set for growth

Luxury goods future – emerging vs advanced economies

Luxury spend determined by HNWIs

Global wealth drivers: Investments and rising purchasing power

Wealth distribution still concentrated in mature markets, but…

…middle classes in emerging markets will "feed" the HNWI pool

Income growth distribution shapes the luxury market

Luxury growth driven by luxury alcoholic drinks in most top markets

BRIC countries catching up with the US in luxury alcohol growth

Luxury market in the BRICs with a promising future

Brazil

Brazil: Fine wines, champagne and spirits snapshot

Key factors

A young and outdoors-loving culture

Luxury alcoholic drinks second fastest growing category in luxury

Cachaça and vodka lead absolute sales growth

Case study: Campari shifting from brandy to cachaça in Brazil

Out with cheap brandy, in with premium cachaça

Case study: Diageo purchasing Ypióca

Diageo purchases premium cachaça manufacturer

Paving the way for other premium spirits in Brazil

Russia

Russia: Fine wines, champagne and spirits snapshot

Key factors

Russia's luxury alcoholic drinks recovering after the crisis

High concentration of HNWIs driving value growth

Large share of spend on luxury from luxury alcoholic drinks

Fine wine promising highest value growth

Case study: Rémy Cointreau and the Russian connection

R ussia

The synergy effect : Premium brands go well together

Russia's premium consumption stimulated by on-trade

India

India: Fine wines, champagne and spirits snapshot

Key factors

India still shying away from expensive alcohol

Still low per capita but future demographics favourable

Blended Scotch driving luxury drinks in India

On-trade driving growth in premium alcohol

Case study: RTDs paving the way to luxury in India

Are RTDs compatible with luxury?

Paving the way to premium in India

China

China: Fine wines, champagne and spirits snapshot

Key factors

Luxury alcohol the fastest growing luxury category in China

Fine wine leading in sales

China opening up to high quality imported wines

Case study: Chateau Lafite

Lafite's successful joint venture with local investment company

Lafite threatened by failure to tackle counterfeiting

China: Possibly major factor for growth in champagne in the future

Case study: LVMH preparing China for champagne

LVMH investing in sparkling to stimulate champagne consumption

China to account for close to 80% of world cognac volume growth

Case study: Rémy divesting champagne to support cognac

Cognac vs champagne for Rémy

Reasons to sell

A safe decision but possibly missing out on opportunities

Conclusions

Diversity in BRICs – in a nutshell

Opportunities and threats in luxury alcoholic drinks in the BRICs

Recommendations

Report Definitions

Luxury goods definitions

Report definition and abbreviations

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