Spirits in Brazil

PROSPECTS

At-home consumption trend boosts off-trade sales

Although the socio-economic scenario in Brazil is beginning to show signs of recovery, most Brazilians are adopting a conservative attitude towards expenses, avoiding eating-out and prioritising at-home consumption. Over the forecast period, off-trade volume sales should return to pre-crisis levels faster than on-trade sales.

Gin set to lead growth over forecast period

Perceived as a niche beverage until recently, gin is rapidly growing in popularity throughout the country. Over the forecast period, the area should record the most positive performance, reaching the same level of popularity as whiskies.

Global drinks trends boost spirits sales

The global drinks home-preparation trend is also growing in popularity in Brazil, thus helping to boost the recovery of spirits sales. Areas benefiting from this trend include gin, whiskies, vodka, cachaça and even some liqueurs.

COMPETITIVE LANDSCAPE

High fragmentation means limited entry barriers

Although the area’s overall share of alcoholic drinks sales did not change over the review period, there is still scope for the entry of new players. With total volume sales share gradually increasing, these new players can explore niche areas not yet covered by major brands and follow new trends much faster than big competitors.

Continuous aggressive promotions could damage brand image

Brazilians continue to look for a good deal. However, some spirits brands, especially whiskies, have been offering aggressive promotions and discounts for such a long time that they cannot return to their original price levels.

Diversified brand portfolios key to maintaining sales

Although most spirits brands faced challenges during the crisis, some companies outperformed others. For example, Diageo Brasil gained sales share in 2017, despite difficulties in major areas like cachaça and whiskies.

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