SCOTCH WHISKY AND BRAZIL

Este artigo, de autoria de Gavin Smith, foi publicado na revista dos Keepers of the Quaich. Dá uma boa idéia de como anda e como se estruturou o mercado brasileiro de whisky. Em breve sua tradução sairá na revista Whisky News da Sociedade Brasileira do Whisky

When ‘emerging markets’ for Scotch whisky are being discussed, the first three names to be mentioned are invariably China, Russia and India. However, Latin America also presents exciting opportunities, and no country in that continent offers more promise than Brazil.
According to David Williamson of the Scotch Whisky Association, “Brazil is one of the industry’s priority emerging markets. In 2005 it was Scotch whisky’s 10th largest export market by volume (equivalent of 24.7m bottles) and the 19th largest by value (£26m). Scotch whisky sales were up by 14 per cent in volume and five per cent in value compared to the previous year.
“Blended Scotch whisky accounts for 87 per cent of the Scotch whisky sold in Brazil by value, and 76 per cent by volume, while cane spirits - predominantly Cachaca - represent 80 per cent of the Brazilian spirits market.”
He continues, “Scotch whisky accounts for 60 per cent of the whisky sold and outsells local whiskies, which make up most of the remainder of the whisky category. While Scotch whisky only represents two per cent of the Brazilian spirits market, with a large population (185 million), a growing economy and more opportunities to purchase international spirits, it is clearly an area of future potential for Scotch whisky distillers.”
As The Edrington Group’s Paul Guerin says, “The macro factors are extremely encouraging, and Scotch whisky is still the premium spirit of choice for the growing middle and upper classes. We believe that the industry will continue to recruit more and more consumers as disposable income continues to grow.”
Nonetheless, a 20 per cent import tariff makes Scotch whisky less affordable to Brazilian consumers, and the State Sales Tax (ICMS) is complex, with rates varying from state to state and product to product. It also discriminates in favour of Cachaca, which is subject to a lower rate of taxation than imported spirits

Kleber Damasceno Prado is President of the Sociedade Brasileira do Whisky (The Whisky Society of Brazil), and he says “The interest of Brazilians for Scotch whisky (other than ‘expats’) started when Brazilian soldiers fighting in Northern Italy (some of whom had previously attended a training period in the US) returned home after V-Day in 1945. Hollywood also had its influence by the early 1950s.
“The standard blends make up most of the day to day consumption. Johnnie Walker is the top selling brand and some bar owners in Rio told me it accounts for almost 80 per cent of sales. The other international brands serve mainly to decorate the shelves.”
According to the International Wine & Spirit Record (2006), the leading blended Scotch whisky brands in Brazil are currently Johnnie Walker Black and Red Label, Teachers, Passport, White Horse and Ballantines.
A Diageo spokesperson notes that “Volume grew by 17 per cent in the year to the end of June 2006, and net sales, after deducting excise duties, by 21 per cent. In the Brazilian hub, which includes Paraguay and Uruguay, growth was driven by Scotch and ready to drink. Johnnie Walker grew net sales, after deducting excise duties, by 40 per cent. In Brazil, Johnnie Walker benefited from investment both above and below the line as Johnnie Walker Red Label’s share grew 3.4 percentage points and Johnnie Walker Black Label delivered share gains of 1.8 percentage points.”
Ralph Ottmueller, VP - Regional Director LATAM for Beam Global Spirits & Wine, notes that “Teacher’s has a 17.8 per cent share of the market in Brazil, according to the latest Nielsen audit, and we are selling approximately 450,000 cases per year. The brand has a remarkable consumer acceptance, particularly in the north-east area of the country and in Rio. The reason for the success is the combination of good quality, great taste and accessible price.
“Teacher’s is imported in bulk and locally bottled so it benefits from a lower taxation than Scotches bottled at source. This allows it to be marketed at a price 40 to 50 per cent lower than the leading bottled in Scotland brands, but still retaining the prestige of an imported brand. It fits perfectly with the profile of the north-east consumers, who have a laid back attitude and enjoy alcohol on a wide range of occasions. Teacher’s is consumed not only in prestige bars and restaurants but also outdoors at the beach, at music festivals and on every occasion when friends get together. “
Chivas Bros International PR Manager Jim Long says, “In Latin America Brazil is the big market for us, along with Venezuela. Overall, the region is doing well, and Brazil has mass – a big country that is very much Scotch whisky drinking. Chivas Regal is historically an extremely strong brand in Brazil, but we’re also doing well there with Something Special, which operates just below Chivas Regal, in what you might call the ‘top end standard’ category. Latin America is certainly a buoyant region, with results for the financial quarter of April to June this year showing a 51 per cent increase for Chivas brands there.”
Edrington’s Paul Guerlin considers that “The Latin American region represents one of the best and most immediate growth opportunities for the Group and Brazil is currently receiving sustained attention from our locally based commercial team. The Famous Grouse has found excellent acceptance in Brazil’s traditional on-premise sector, and our strategy is based on strong and imaginative activation at the point of sale.”
So much for blends, but what about single malts? Glenfiddich and Diageo’s Classic Malt range head the market, though, as Kleber Damasceno Prado explains, “When single malts are mentioned most people don’t really know what the term means, but recall one brand name - Glenfiddich.”
Glenfiddich’s Business Development Manager for Brazil is Andre Duarte, and he stresses that “At this moment single malt is a very small category in Brazil, representing less than one percent of total consumption, but we are just starting. Glenfiddich is leader and we sell more than 80 per cent of the single malt volume in Brazil.
“For Glenfiddich, Brazil is important because consumers there are more open to trying premium spirits than in other countries in Latin America. However, knowledge is very limited and there is a lot of confusion about single malt, blended malt and blended whisky. Another barrier to break down is the belief that single malt is stronger than blended whisky. There is a lot to teach and to do.”

Having chosen to drink whisky, just how do Brazilian consumers enjoy it? Kleber Damasceno Prado notes that “Most people take their drams on the rocks. In the north-east you can see coconut water added. And the ones who don’t really appreciate whisky add our local soda, guaraná, spoiling both.”
Andre Duarte adds that “Sixty per cent of the consumers drink whisky with ice, and in the north-east region - the biggest per capita and consumption area – 45 per cent drink it with coconut water. And the young consumer often mixes it with energy drinks like Red Bull.
“There is an interpretation that a single malt must be drunk neat, and I think that was a result of the consumption indication the industry used to give. Now we say “Drink in the way you enjoy most.”