Our most recent Brazil Wine Landscapes report shows that underlying positive growth in wine sales and consumer engagement has been hit by the broader economic impact of COVID-19
The latest Wine Intelligence Landscape report reflects the volatile conditions facing the Brazilian wine market and the world we find ourselves in now. When we first collected the data for our Brazil Wine Landscapes Report in January 2020, the virus was a distant threat with limited influence in consumers attitudes in most parts of the world. Then, in just a few weeks, the world turned upside down.
In order to keep the pace with these changing times, Wine Intelligence launched a special COVID-19 research survey between the 18th and 24th of March, when the majority of the country was going into official lockdown.
Therefore, this report is a tale of two eras. The January 2020 study, covering all regular wine drinkers in Brazil (imported and / or domestic), shows the long-term changes in this large, important and high potential market. The second, more recent survey, starts to delve into intentions and priorities for Brazilians once current government restrictions have been relaxed, to offer some clues as to how wine will fare once the pandemic crisis is over. The results are a combination of positive long-run market developments with significant short-run uncertainties about the future.
Data from January 2020 shows that Brazil is considered a growing market thanks to a solid expansion of imported wine volumes (8.3% annually from 2014-19), and the capacity of the industry to attract new consumers, adding 6 million new regular wine consumers since the last Brazil Landscapes report in 2018. The number of regular wine drinkers has risen from 32 million to 38 million in this time period.
In line with our global trends, objective wine knowledge levels are in decline in Brazil, whereas confidence in wine purchasing decisions is growing, especially among younger consumers. However, the younger generation has not yet embraced the wine category: 20% of the Brazil’s population is aged 18-24 but just 12% of 18-24 year olds declare to drink wine on a regular basis. Activating this demographic will be one of the key challenges for the industry in the coming years.
Fast forward to data collected when the country was feeling the first effects of the pandemic, we see data suggesting lower consumption frequency, even at home (the only option those days), and a growing concern about the future with saving money as a top priority.
Economic privation combined with currency devaluation (about 30% since COVID-19) will have a negative impact on prices and margins across the chain, representing another challenge that shall remain for the months to come. One of the few certainties is that current conditions will require a lot of adaptation and flexibility from anyone involved in this market. We will be following this closely.