Brazil is now the 14th most attractive wine market globally, according to the Wine Intelligence Wine Market Attractiveness Compass Model 2021 moving up 12 places in the ranking from 2020. The volume of still wine consumed in Brazil increased by 28% in 2020 from 2019 according to the IWSR, with forecast growth in Brazil continuing to grow over the next five years, albeit at a more modest rate.
The impact of Covid, especially the transition to at-home consumption, has bolstered the wine category in Brazil, which grew at the expense of rum and cachaça for example. However, this growth in wine reflects more complex underlying market changes. In particular, Wine Intelligence consumer research amongst wine drinkers in Brazil indicates a shift in the patterns and behaviours amongst consumers. A new segment of wine consumers is emerging and has the capacity to shape the market outlook for the long term.
Currently, and in comparison with other key wine markets globally, Brazil, as a growth wine market, has a relatively low per capita consumption of wine. However, there is a growing population of regular wine drinkers (those who drink wine at least once per month) in Brazil, expanding by 7 million drinkers from 32 million drinkers in 2018 to 39 million in 2020. “The expansion of the wine drinker base in Brazil has been helped by improved distribution, especially via e-commerce, and growth in higher quality wines in supermarkets. These factors in turn, have led to more consumers willing to engage with and enjoy wine,” notes Rodrigo Lanari, LATAM Territory Manager, Wine Intelligence.
During Covid, wine volume consumption in 2020 was helped by the country’s lower reliance on on-trade sales which account for less than 20% of wine sales, according to IWSR. Additionally, the Brazilian market entered 2020 with a relatively high proportion on consumers already purchasing wine online with 30% of drinkers buying wine through e-commerce channels in Brazil according to Wine Intelligence data.
“Looking ahead, digitally savvy and adventurous consumers offer a growing opportunity for the Brazilian wine market,” says Lanari. ‘Our data shows that 70% of regular wine drinkers in Brazil enjoy trying new and different styles of wine on a regular basis. To put this in context, this compares to typically 40-50% of regular wine drinkers in other key markets”
The big spenders of today’s market
Based on the Wine Intelligence consumer segmentation study, Brazil Portraits, two key segments of consumers are driving much of the market opportunity – Enthusiastic Treaters and Engaged Explorers. Together, wine drinkers in these segments are 29% of Brazil’s regular wine drinkers, but they represent 62% of the total spend on wine.
Enthusiastic Treaters are younger (LDA) and more wealthy consumers who have a strong interest in wine. Despite being just 12% of wine drinkers in Brazil, they account for 32% of spend on wine in Brazil.
Engaged Explorers are again younger LDA wine drinkers for whom wine is an important part of their lifestyle. With a broad wine repertoire, they are the most confident, involved and frequent drinking segment. Compared with Enthusiastic Treaters, Engaged Explorers have less disposable income to spend on wine.
Tomorrow’s larger, more representative base
But the two groups that hold the potential for Brazil’s wine market to maintain growth are Mainstream Casuals, who are brand driven, and the status-driven Contented Treaters.
The first group is in the lower- to mid-income range. They are interested in wine, drink wine at home frequently, have mid-level wine knowledge and they make wine choices confidently, shopping mainly at supermarkets. They are price savvy and opt for mainstream wine and brands. They reflect the Brazilian population as a whole far better than the current big wine spenders and, as such, they offer promise for strong development.
The second group may treat themselves to wine less often than today’s big spenders, but they like to treat themselves to premium wines, shopping at supermarkets but also in retail wine boutiques. While they don’t describe themselves as passionate about wine, they have good knowledge of wines’ origins and grape varieties.
Together these last two segments account for 37% of the wine drinking population, look more like regular drinkers in both established and mature wine markets, and can be overlooked as they currently drink wine less frequently than Enthusiastic Treaters and Engaged Explorers.
However, change is on the horizon. “In 2021 they accounted for 28% of wine spending in the country, and their increased spending during Covid, at a time of economic difficulties in Brazil, hints at two wine drinking populations who will likely have a lasting impact on the outlook of the Brazilian wine market,” says Lanari.
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