In Brazil, success in alcoholic drinks can be tough, as it is an already saturated industry, having one of the biggest consumer bases for beer and having high penetration of cachaça. However, 2020 and 2021 showed that there is plenty of space still left to explore, while also introducing a problem: the high cost of logistics.
The recent popularisation of alcoholic drinks, and especially the cocktail culture, drove consumers’ curiosity, which, aligned with the COVID-19 pandemic led consumers to prioritise consumption in their households. The situation presented a challenge for companies – there was consumer demand, but they needed to decide how to teach consumers the best ways to use their products at home.
As COVID-19 started to have less of an impact in Brazil, the market was marked by intense “revenge conviviality” in 2021, which drove consumers back to the on-trade, leading to a strong and quick recovery of much of the volumes lost in 2020. This bounce-back was driven primarily by consumers seeking to compensate for the period of lost indulgence during the worst times of COVID-19, but was also driven by deeper reasons and the overall new perception of alcoholic drinks amongst consumers.
Alcoholic drinks, and especially spirits, has long been an industry with little association with health claims, but the recent trend of consumers looking for healthier lifestyles drove companies to search for new ways and opportunities to bring claims and health associations to the spirits world. In Brazil, especially in gin, vodka and cachaça, the main claim being popularised is the use of organic ingredients.
The high inflation rates that hit Brazil in 2021 are expected to continue in 2022 and 2023, although at a slower pace. This will give momentum to the already existing trend of polarisation.
COVID-19 and recent international wars and conflicts are leading inflation to hit consumers’ incomes on a national level and leading to a move towards deglobalisation, creating new needs and opportunities. This international chaos might prove fertile ground to invest in cachaça, a national product, which in Brazil is mainly dependent on the national supply chain.
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This is the aggregation of whisk(e)y, brandy and Cognac, white spirits, rum, tequila, liqueurs and other spirits.See All of Our Definitions
This report originates from Passport, our Spirits research and analysis database.
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