Brazilians drink wine like never before and are keen to learn more, however targeting consumers is not without challenges
Like other key emerging markets, Brazil offers long-term gains but also a certain degree of short-term pain.
Its economy is currently stuttering after a sharp period of growth. Bureaucracy and the threat of protectionism are now part of the wine market landscape. However the wine-drinking population is growing, and spending its increasing wealth on a greater range of imported products.
1. Taxes are very high so competitive pricing is important
Pricing is one of the biggest challenges for Brazilian consumers. This holds especially true in a country where wine is taxed at the same level as spirits.
2.You have to steer your way through bureaucracy and regulations
Brazil is quite bureaucratic country, which is one of the main impediments to the development of its wine market. The government views wine as a luxury good, imposing complex and high taxes at national and state level. The year 2012 was marked by the threat of protectionism hanging over the Brazilian wine market.
3. You need a reliable and well-informed partner in Brazil to handle the importation process
There has been a big increase in the number of importers which don’t necessarily meet all the requirements of those hoping to sell in the Brazilian market. As we have seen in other emerging markets, things can change at short notice, which means it is important to have eyes and ears on the ground.
4. You need strong brand communication
Wine education is increasingly popular in Brazil, and there is a general buzz around wine events. It follows that a strong marketing strategy is necessary to build brand awareness and get product positioning right. Direct involvement by wine producers is also crucial in making a connection with consumers.
5. Targeting younger drinkers can pay dividends
Young wine drinkers have a curiosity about wine, and limited knowledge. Younger consumers tend to be less confident in their wine choices, relying on country of origin and brands. Unlike their parents – who tend to stick with wines from Chile and Argentina, as well as Italy and Germany – younger consumers are more open to a wide variety of countries of origin. They’re looking for brand reassurance, and also value recommendations from their friends and family.
For more information, please see our latest publication Doing Business in Brazil, now available for purchase.