Brazil Wine Market Report JBC EMP July 2011 - California Wine ...

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Brazilian Wine Market Report
among the majority of the population is turned towards food and housing. The Brazilian
consumer is more demanding and selective. He is aware of quality, the price of goods and
special offers. Brazil is a dual economy, in which the upper classes distinguish themselves by
consumption close to that of the United States and Europe, while the poorer people have to
be careful with prices and buy almost exclusively on the unofficial market. Access to credit
is increasing, especially among the middle classes and in spite of some of the highest
interest rates in the world. Everything is bought on credit: real estate, household appliances
and brand name clothes. Many shops offer to spread payments over a period of time,
sometimes without charging interest. 4
While it is only natural that wine exporters would like to tap into the Brazilian economy, there
are a variety of barriers. The Brazilian government currently has both tariff and non-tariff
barriers that are not easily overcome. Furthermore, as a result of the advantages of free
trade agreements, Chile and Argentina have been able to export at substantially lower costs,
and as of 2010, together comprise over 57 percent of all wine imports. Consumers, however,
are open to emerging trends, which may represent an opportunity for the U.S. to move up
from its current status as the 10 th largest wine exporter to Brazil, importing $1,415,977 in
2010 under Harmonized Code 2204- Wines of Fresh Grapes 5 .
Euro Monitor reports: that alcoholic drinks experienced strong growth in 2010 driven by the good
performance of all sectors, in particular beer, which accounts for some 87% of overall volume sales.
Beer benefited from increasing disposable incomes among lower-income brackets and steady
unemployment rates combined with the consumer interest in the FIFA World Cup held in South Africa
boosted sales in June and July, a period of the year when demand is typically lower compared to the
summer season.
Growing Investments in Premium Alcoholic Drinks
With improvement in the purchasing power of most Brazilians, growing demand for higher quality
products was evident over the review period. As a result, alcoholic drinks manufacturers invested in
expanding their portfolios with premium products such as Cervejarias Kaiser do Brasil which
introduced Amstel Pulse (Netherlands), Birra Moretti (Italy), Edelweiss (Austria), Murphy’s Irish Stout
and Murphy’s Irish Red (Ireland) in early 2010 and Cervejaria Petrópolis, which partnered with a
German brewery to produce and distribute Weltenburger beer locally. In addition, growing sales of
premium brands such as Absolut, Wyborowa and Stolichnaya were evident in vodka, and Ypióca Gold
and artisanal products in cachaça.
Ambev Continues To Grow In 2010
AmBev (Cia Brasileira de Bebidas) is the outright leader in alcoholic drinks due to its leading position
in beer. The company has a wide portfolio of beer in the standard and premium segments and it
continued to experience growth in 2010 despite the acquisition of Cervejarias Kaiser do Brasil by
Heineken and strong investments of Schincariol Participações e Representações and Cervejaria
Petrópolis in expanding their portfolios with Devassa (Schincariol) and Petra and Weltenburger
(Cervejaria Petrópolis).
4 www.laposte-export-solutions.co.uk/uk
5 http://www.gtis.com/gta/secure/gateway.cfm