Wine in Peru

PROSPECTS

The ISC tax increase has mixed effects in wine

In 2018, the Peruvian government increased the Selective Tax on Consumption (ISC), the tax that regulates products with negative impacts on the country, such as sugary drinks, tobacco and alcoholic drinks, amongst others. In the case of wine, the tax rate had a mixed impact on the category.

On-trade gains ground, but off-trade is still the preferred channel in Peru

Despite the growing relevance and development of the on-trade channel in Peru, the off-trade channel is still preferred in the country, accounting for more than two thirds of total volume sales. Amongst off-trade channels, food/drink/tobacco specialists is the most relevant, followed at a distance by hypermarkets and supermarkets.

The strong presence of key international wineries

The fact that the Peruvian wine industry has been underdeveloped for a long time, and Peru’s proximity to countries with a strong wine culture, such as Chile and Argentina, has contributed to the strong presence of wineries such as Concha y Toro from Chile, or Navarro Correas from Argentina, amongst others, and wines from Spain, which is the other important country in wine in Peru. Even though consumers are becoming more knowledgeable about wine, they still prefer well-known brands for their purchases; therefore, it is difficult for smaller and newer brands to become better-known and gain sales, particularly in a context of economic slowdown, in which price is gaining more relevance.

COMPETITIVE LANDSCAPE

Local producers seek to increase awareness of wine through tourism

Following the strategy well-established by manufacturers in other countries, such as Chile or Argentina, local producers such as Queirolo and Tacama have given their facilities a touristic approach to educate consumers about wine and make it easier for them to try their products. In the case of Viña Santiago Queirolo, some years ago the winery opened a hotel in the middle of its vineyard in Ica.

Multi-packs of wine are available in hypermarkets and supermarkets

It has become increasingly common in the key online stores of supermarkets and hypermarkets to see promotions on 6-units and 12-units of still and sparkling wine. Until recently, promotional packs were almost exclusively on beer and RTDs; however, to gain sales, brands such as Tottus and Wong offer these promotions for middle-market and high-end wines.

Offers in off-trade channels

Off-trade channels such as food/drink/tobacco specialists, hypermarkets and supermarkets tend to have good offers, promotions and campaigns from vineyards. This, together with related events, such as Expo Vino from Wong Supermarkets, Destinations to Flavour from Vivanda and High-end Wine Fest, not only create awareness, but help to educate consumers about the consumption of wine and reinforce its aspirational nature.

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