The current political turmoil has brought an unprecedented economic recession in Brazil’s history. GDP is expected to fall by 4% this year and there are 10 million workers unemployed. So, given this cloudy scenario, how is the wine industry being impacted and what should wine producers do to guarantee a safe position and capture growth opportunities?
To read the full report click here.
Wine consumption and the Brazilian economy walked hand in hand in the beginning of the year. Volumes felt by 12% with premium categories such as champagne and sparkling declining by 25% and 11% in the 1st trimester respectively. In fact, the trade down phenomenon started in 2015 with market value declining 12% while volumes were stagnant. If we take a broader perspective, the wine market just grew 1.5% annually since 2011 from 8.3 to 8.9 million cases.
But the market dynamics are changing rapidly. Traditional importers are losing ground to leaner distribution channels such as supermarkets and local winery operations. Classic example is Concha y Toro, gaining 9% market share, and Pão de Açucar, leading the distributors ranking by value. Traditional importers now represent less than 50% of the market while supermarkets have 28% and Concha y Toro alone 16%.
So take a look below at our growth opportunities for this year and bear in mind the categories that are growing ... and the ones that are not.
To read the full report click here.