In an increasingly globalized world, markets have ceased to be national and have expanded into international markets. Because of this globalization, we can see a growing international competition based mainly on quality and price. In this scenario, Brazil emerges as a promising emerging market, especially when it comes to the wine market.
Wine is a historical drink that carries a strong symbology and tradition, so Brazilian consumers and sales channels classify it as a cultural drink that has much more than just flavor, since it covers the entire history bounded to great events and personalities, making wine a unique drink full of meanings.
According to a study carried out by the Brazilian Wine Institute in partnership with the Fondo Vitivinícola Mendonza, which brings a research mainly on the profile of the Brazilian market, its consumers and sales channels, Brazil has been showing over the years a growing consumption that results in the popularization of the drink around the country, not being consumed only in the coldest regions.
Brazilian wine market – characteristics
Although wine consumption by Brazilians has increased, consumers still have low knowledge on issues related to the characteristics of wines, such as production, quality and conservation.
The wine consumption occurs during the week and on weekends, mostly during the night, and is widely used at meetings and confraternization of work, friends and family.
A fine wine is a wine produced from grapes of the species Vitis Vinifera, known as fine grapes or European grapes, and has smaller grains and thicker bark. (Ex: Cabernet Sauvignon, Chardonnay, Merlot, Malbec). Its elaboration process is more rigorous, as it follows norms and standards of quality. A fine wine is seen as an expensive, stylized drink that awakens the feeling of being someone special. It corresponds to 23.75% of the total consumption of Brazilians.
A table wine is a wine produced from grapes of the species Vitis Bourquina, Vitis Labrusca and Vitis Rupestris, known as table or American grapes. Its elaboration process admits other products besides grapes. It has concepts associated with a popular, affordable drink, being emphasized more the pleasant taste of the drink and the benefits it brings to the health. It corresponds to 48.33% of the total consumption of Brazilians.
Brazil is one of the countries that allows the manufacture of wine from species of American grapes.
Sparkling wines are associated with luxury concepts, a rare object, stylized and focused on specific (special) consumption occasions. It corresponds to 20.83% of the total consumption of Brazilians.
Also noteworthy is that there is a male audience preference for dry wines while the female audience prefers soft wines.
What influences the consumer at the time of purchase are the guidelines received by some specialist in the sale channels (when there is one), the nationality of the product and recommendations from friends and family.
There are basically 4 types of sale channels, which are:
I. Specialty Stores;
Ii. Wholesale, distributors and importers;
Iii. Hotels and restaurants;
Iv. Retail.
The specialized stores are visited for a more demanding public, with greater knowledge about wines and purchasing power, so it usually has professionals who have taken some course of specialization in wines. These kinds of stores are the most capacitated in this matter. Its main products are fine wines, sparkling wines and table wines.
Distributors, wholesale stores and importers often sell in large quantities and are responsible for sales to hotels, restaurants and retail. Its main products are fine wines, sparkling wines and table wines.
The hotels and restaurants are characterized by the immediate consumption of the drink, very connected to the entertainment, the differential service and the harmony that the local reflects influence the consumer. Its main products are fine and sparkling wines.
Retail is the establishment in which the consumer makes the purchase individually, not having any type of service. Its main products are table wines and sparkling wines.
A business opportunity
According to data from the International Organization of Vine and Wine (OIV), Brazil has imported 319.8 million liters of wine in 2012 and there is an expectation that in 2019 this number increases to 400.1 million liters imported.
However, wine consumption in Brazil is only 2.1L per capita per year, whereas in Italy the consumption reaches 43.2L per capita per year. This low consumption shows how much we still have to evolve in the wine sector, once that this is a market that presents many opportunities and growth potential.
The magazine “Meininger’s Wine Business International”, the international magazine of wine trade in the world, read in more than 40 countries, in its August 2009 edition, has predicted that Brazil in a few years will be ranked as the 5th country in the ranking of wine consumption.
According to the import spreadsheet provided by the Industry’s, Foreign Trade and Services’ Ministry, in January 2017, Brazil imported US$ 23,519,706.00 in wines.
In the last 3 years, Brazil has increased its wine consumption by 15.85%.
Considering the scenario and trends in the Brazilian wine market, we understand that the current moment reflects a great investment opportunity, and Guarnera Advogados is fully capable to assist the players in this business.