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

Domestic Marketing
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Brazilian Wine Market Report
In 2008, IBRAVIN (Brazilian Institute of Wine) and key players of the wine industry
invested in an advertising campaign to promote national brands of still light grape wines
and highlight the high quality of Brazilian wines. There are also efforts to increase exports of
still light grape wines and sparkling wines through a project called “Wines of Brazil”, a
partnership between wine manufacturers and APEX (Brazilian Agency of Promotion of
Exports and Investments). Sparkling wines still account for the majority of exports reaching
665 tonnes in 2007.
Declining sales of table wines and competition with Chilean and Argentinean still light grape
wines will lead domestic manufacturers to increase investment in a wide product portfolio of
fine wines with brands positioned as low-, mid- and high-end as part of the strategy to
remain competitive and cater to the different demands of high-income consumers and mid-
/low-income consumers. For wealthier consumers, the grape varietal type and origin of the
wine are important attributes, while price followed by origin are the most important criteria
for lower-income brackets.
The competition between imported and national wines will persist until the Brazilian
government, trade associations and key domestic manufacturers adopt an agreement about
the import tax charged to Chilean and Argentinean governments or subsidies provided by
the Brazilian government to protect domestic companies. Meanwhile, the wine industry will
have to maintain investments in economy products and/or marketing campaigns to increase
the visibility of their products.
Investment in smaller packaging for sparkling wines and still light grape wines such as Salton
might be a good strategy to stimulate young consumers to trial different alcoholic beverages,
especially in the on-trade since the sector faces resistance from consumers between the ages
of 18 and 25 that frequently prefer beverages such as beer, vodka and RTDs.
U.S. Wines in Brazil
Current U.S. Exports
In 2010, U.S. wine sales to Brazil totaled $1,415,977 8 ; however, this represented a
miniscule percentage of the wine import market. Over the last three years, Brazil has
imported approximately 6.5 million cases (12 bottles of 750ml each) of wine per year, which
represents US$ 196 million FOB of annual imports. The U.S. share of those imports is less
than one percent. Although Brazil’s population is approximately 203 million, wine
consumption per capita for 2010 was 1.8 liters. This small figure presents definite
possibilities for market expansion. The United States Department of Agriculture, Foreign
Agricultural Service (FAS) prepared a list of best import prospects based on Brazilian
consumption patterns. According to the FAS market trend evaluation, wine ranks second on
the list of potential increase.
8 http://www.gtis.com/gta/secure/gateway.cfm