The Brazilian wine market is recovering after 2016 challenges as consumer involvement rises, according to latest Wine Intelligence Brazil Landscapes 2019 report
Political instability and economic uncertainty have certainly put Brazil in the headlines more than ever in recent years. The country has had three presidents in less than three years, the latest of whom, Jair Bolsonaro, has quickly cemented his reputation as a radical, unpredictable and divisive leader – Brazil’s answer to Trump. Amid an economy just starting a recovery from a decade of underperformance, one might imagine these conditions would have had a negative effect on the wine category. And while some of the numbers do not make for pretty reading, the evidence collected for our Brazil Landscapes 2019 report suggests signs of resilience and recovery within the wine sector.
While wine volume sales have been volatile (they fell by 14% in 2016, only to recover in 2017), data published by Ideal Consultoria in 2018 shows imported wine consumption has noticeably grown since 2014 and now represents 1/3rd of the total wine market. In addition, Brazil is now the 26th most attractive wine market in the world, according to the Wine Intelligence Global Compass Wine Market Attractiveness model. The country was also the ‘fastest riser’ in this report, moving up 12 places from 38th to 26th most attractive since 2017.
The regular wine drinking population in Brazil is now comprised of 32 million adults who drink wine once a month, with 70% of this group drinking wine at least once every week. This is compared to 29.7 million adults who drank wine once a month in 2016.
The report also notes that both consumers and the supply chain have adapted to harsher tax and economic conditions. Consumers are paying more for the same quality wine, seen by the average spend per bottle significantly increasing for many off- and on-trade occasions. More encouraging for investors in the wine category, the tracking data shows rising levels of consumer involvement in wine, shown by a growing proportion of respondents who say they ‘feel competent’ about wine, ‘like to take their time to purchase wine’ and consider wine to be ‘important’ to their lifestyles (31% in 2019 compared to 27% in 2017).
Consumer engagement, specifically with younger generations, will be key to guaranteeing further growth. Younger consumers account for 20% of the adult population and 16% of the regular wine drinking population; they also show the lowest degree of involvement within the wine category, which aligns with younger wine drinkers globally. At the same time, however, younger drinkers are more likely to consume wine in the on-trade, as well spend more money per bottle. The report notes the successful efforts made by the domestic sparkling wine producers, which are investing in ways of drawing in younger consumers.
This focus on consumer engagement, along with the fact that Brazil is the 8th largest economy worldwide and the 17th largest wine market in terms of still wine volume, indicates that there is plenty of room for growth and promising opportunities for those involved, or seeking to enter the Brazilian wine market.
Brazil Landscapes 2019 also analyses Brazilian wine consumers, their beverage repertoire, wine buying behaviour, wine consumption in the on- and off-trade, as well as brand health. Hot topics of premium wine drinker profiling, online wine shoppers and Brazilian sparkling wine are also discussed.
See more about our upcoming event exploring the Brazilian market in Santiago de Chile on the 29th of May 2019.
Author: Rodrigo Lanari