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Spirits - Brazil - April 2016

Published By :

Mintel

Published Date : Apr 2016

Category :

Alcoholic Beverages

No. of Pages : N/A

Brazilian consumers are drinking fewer alcoholic beverages, including spirits. Brands need to get creative to convince consumers to get on board and start drinking (or drinking more). Apart from the economic crisis, which affects their pockets, consumers are worried about health issues. Providing more information about drinking responsibly as well as nutritional information could be a way to circumvent such issues.

Spirits must taste good neat, therefore brands innovating with flavor should make sure this does not compromise the taste (ie, not too sweet) or consumers might turn away.

Table of Content

Overview

What you need to know 
Products covered in this Report

Executive Summary

The Market
While value sales of spirits keep on rising, volume sales are falling
Figure 1: Forecast of Brazil retail sales of spirits, by value, 2010-20
Market drivers
Change of spirits taxation system
Consumers are drinking less alcohol
Key Players
Diageo is the market leader with 35.1% in market share by value
Figure 2: Value shares in the spirits retail market, 2013 and 2014
Boosting sales and popularity with the Olympic Games
New design for Muller’s RTD 51 Ice
Diageo is expanding its cachaça label
The Consumer
44% of Brazilians have consumed at least one type of spirit
Figure 3: Usage of spirits, February 2016
Consumers are worried about their health
Figure 4: Reasons for not drinking spirits, February 2016
Top notch ingredients and heritage are essential in premium spirits
Figure 5: Premium spirits attributes, February 2016
Spirits must taste good neat and be affordable
Figure 6: Influencing factors when purchasing spirits, February 2016
Consumers demand drunk driving prevention and nutritional information
Figure 7: Attitudes and behaviors toward spirits, February 2016
What we think

Issues and Insights

Increasing consumption among DE consumers
The facts
The implications
Using the economic downturn to boost RTD sales
The facts
The implications
Figure 8: RTD spirit products featuring local flavors, Brazil
Figure 9: RTD spirit products featuring coconut water
Figure 10: Skinnygirl RTD products, US

The Market – What You Need to Know

Value sales of spirits keep on rising
Tax on spirits has increased
Brazilian consumers are cutting back on alcohol

Market Size and Forecast

Worldwide spirits market
Figure 11: Worldwide spirits markets of selected countries, CAGR (Compound Annual Growth Rate) retail value and consumption per capita
Market performance
Figure 12: Retail sales of spirits in Brazil, by value, 2010-14
Figure 13: Retail sales of spirits in Brazil, by volume (in million liters), 2010-14
Segment performance
Figure 14: Retail value sales of spirits, in R$ million, 2012-14
Figure 15: Retail volume sales of spirits, in million liters, 2012-14
Forecast for the spirits market
Figure 16: Forecast of Brazil retail sales of spirits, by value, 2010-20
Figure 17: Forecast of Brazil retail sales of spirits, by volume, 2010-20

Market Drivers

Higher tax on spirits
Mexico recognized cachaça as a genuine Brazilian spirit
Aging population
Brazilian consumers are cutting back on alcohol
The Brazilian economy is struggling
Inflation is diminishing consumers’ spending power
Figure 18: IPCA monthly change, by percentage, January 2014-February 2016
Unemployment rate keeps increasing
Figure 19: PME’s monthly unemployment rate, Brazil, 2015-16
Fall in average earnings

Key Players – What You Need to Know

Diageo is the market leader with 35.1% in market share by value
The Olympic Games is a chance to increase sales
Muller’s RTD 51 Ice gets revamped
Diageo expands its cachaça brand

Market Share

Diageo is the market leader with 35.1% in market share by value
Figure 20: Value shares in the spirits retail market, 2013 and 2014
Figure 21: Volume shares in the spirits retail market, 2013 and 2014
Pernod Ricard promotes “Dia D #Vodcalizar” (day to “vodkalize”) in Brazil
New advertising campaign changes Cia Muller’s cachaça 51
Using the Olympics to boost sales
Absolut launched a pop-up bar in Recife

Who’s Innovating?

New packaging for Muller’s RTD 51 Ice
Figure 22: 51 Ice new packaging, Brazil
Diageo expands its cachaça brand
Figure 23: RTD Ypióca sabores do Brasil honey and lemon flavored, Diageo
Pernod Ricard Brazil adopts green plastic caps
Ambev launches Skol Beats Spirit
Figure 24: Skol Beats Spirit, Brazil
New innovations in flavors in RTD
Innovations around the globe
Smirnoff launches vodka made with real fruit juice
Figure 25: Smirnoff Sourced, Diageo, US

The Consumer – What You Need to Know

44% of Brazilians have consumed at least one type of spirit
Consumers are worried about their health
High-quality ingredients are essential in premium spirits
Good taste, recommendations, and price are essential
Consumers want brands to prevent drunk driving and provide nutritional information on the labels

Usage of Spirits

Spirits are drunk by 44% of consumers
Vodka is the main spirit consumed
Figure 26: Usage of vodka and RTD, by age, February 2016
Consumption of spirits presents an upscale skew
Figure 27: Usage of spirits, by socioeconomic group, February 2016
Figure 28: Usage of spirits, February 2016

Reasons for not Drinking Spirits

Health concerns are the main reason for not drinking
Medical reasons are also an impediment
Spirits face competition from other alcoholic drinks
Figure 29: Reasons for not drinking spirits, February 2016

Premium Spirits Attributes

Premium spirits are most associated with high-quality ingredients
Aging is “more premium” than filtering
High-quality ingredients convey exclusivity
Figure 30: NPD highlighting ingredients used, worldwide
Heritage is key for those aged 35-44
Using packaging to stand out
Figure 31: NPD featuring unusual packaging, worldwide
Craft spirits struggling to be seen as premium
Figure 32: Premium spirits attributes, February 2016

Influencing Factors When Purchasing Spirits

A good taste is essential in the category
Figure 33: Influencing factors when purchasing spirits, by age, February 2016
Flavor is important to 16% of consumers
Brands should invest in word of mouth to promote products
Domestic brands need to stand out against international ones
Using advertising to bring in more young customers
Figure 34: Influencing factors when purchasing spirits, by gender and age, February 2016
Price is important but not as much as taste
Figure 35: Influencing factors when purchasing spirits, February 2016

Attitudes and Behaviors toward Spirits

Consumers want brands to prevent drunk driving
Nutritional information on packaging is appealing to spirit drinkers
Diageo revamps its responsible drinking website
Experimenting with typical spirits from other countries
Figure 36: Diageo’s Jinzu
Figure 37: RTD Pisco products, Peru
Craft spirits
Craft pioneers innovate around more complex spirits
Figure 38: NPD featuring heritage and provenance, worldwide
Spreading craft cachaça
Figure 39: Attitudes and behaviors toward spirits, February 2016

Appendix: Market Size and Forecast

Figure 40: Value sales for spirits, Brazil, 2010-2020
Figure 41: Volume sales for spirits, Brazil, 2010-2020

Appendix: Methodology and Definitions

Fan chart forecast
Abbreviations

List of Table

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