Spirits - Brazil

The Spirits market in Brazil has been experiencing significant growth in recent years, driven by changing customer preferences, emerging trends, and local special circumstances.

Customer preferences: Brazilian consumers have shown a growing interest in premium and artisanal spirits, preferring higher quality and unique products. This shift in preferences can be attributed to the increasing disposable income and changing lifestyles of consumers, who are now seeking more sophisticated and premium options. Additionally, there has been a rise in the demand for spirits that are perceived to be healthier and more natural, leading to an increased interest in organic and craft spirits.

Trends in the market: One notable trend in the Brazilian Spirits market is the increasing popularity of local spirits. Brazilian consumers are showing a strong preference for spirits that are produced locally, as they value the authenticity and cultural significance of these products. This trend has led to a surge in the production and consumption of traditional Brazilian spirits such as cachaça, which is a type of sugarcane-based spirit. The popularity of cachaça has also been fueled by the growing popularity of cocktails such as caipirinha, which is made using cachaça. Another trend in the market is the rise of flavored spirits. Flavored spirits, such as flavored vodka and flavored rum, have gained popularity among Brazilian consumers, particularly among the younger demographic. These flavored spirits offer a wide range of options and flavors, catering to the diverse tastes and preferences of consumers. The introduction of innovative and unique flavors has further fueled the demand for these products.

Local special circumstances: Brazil is known for its vibrant and diverse culture, and this is reflected in the Spirits market. The country has a rich tradition of producing and consuming spirits, with unique regional specialties. For example, in the state of Minas Gerais, the production of cachaça is a long-standing tradition, and the region is known for its high-quality cachaça production. Similarly, other regions in Brazil have their own traditional spirits, each with its own unique characteristics and production methods. This cultural diversity adds to the appeal of the Brazilian Spirits market and contributes to its growth.

Underlying macroeconomic factors: The growth of the Spirits market in Brazil is also influenced by underlying macroeconomic factors. The country has experienced periods of economic stability and growth, which have contributed to the increasing disposable income of consumers. This rise in disposable income has enabled consumers to spend more on premium and higher-priced spirits, driving the growth of the market. Additionally, Brazil has a large and growing middle class, which represents a significant consumer base for spirits. The expanding middle class has led to an increase in the number of consumers who can afford to purchase spirits, further fueling market growth. In conclusion, the Spirits market in Brazil is experiencing growth due to changing customer preferences, emerging trends such as the demand for local and flavored spirits, local special circumstances that highlight the country's rich cultural heritage, and underlying macroeconomic factors such as increasing disposable income and a growing middle class.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.