Scotch and vodka show Latin America promise

13th February, 2013 by Chris Mercer - This article is over multiple pages: 1 2 3

Global distillers are using whisky and vodka brands to beat a path for premium international spirits through Latin America’s jungle of local favourites, discovers Chris Mercer.

Sao Paulo Latin America

Bright lights, big city: in urban centres such as São Paulo, two-thirds of spirits are sold in the on-trade Photo: Embratur

Headline spirits sales for Latin America are underwhelming. Consumption is smaller today than in 2006 and will only expand by 6% on 2011 levels up to 2016, to 2.24bn litres, says Euromonitor International, whose regional figures include Mexico.

However, falling consumption of native spirits, such as cachaça in Brazil and Tequila in Mexico, conceals premium opportunities. “Scotch and vodka are showing a lot of promise,” says Diageo’s president for Latin America and the Caribbean, Randy Millian.

Diageo saw net sales rise by 16% in Latin America & Caribbean in the first quarter of its new fiscal year, and that’s no fluke. The drinks giant has posted double-digit growth in the region for five of the last six quarters, according to Sanford Bernstein analysts.

Millian says Latin America was the largest regional contributor to Diageo’s global sales growth on Scotch whisky in its last fiscal year. “In Paraguay, Uruguay and Brazil, over 60% of [our] net sales growth was driven by Scotch, primarily Johnnie Walker and Old Parr,” says Millian. He names Venezuela, Colombia and Mexico as other strong-performing countries in this increasingly dynamic region.

In calendar 2011, Scotch exports to Central and South America increased by 38% in value to £489m, according to the Scotch Whisky Association (SWA). Brazil was the ninth largest single export market for Scotch globally, worth £99m.

“The most exciting market at present is Brazil,” explains Mark Thorne, regional director for Pernod Ricard-owned Chivas Brothers. “Brazilian consumers are increasingly looking to trade up with an interest for international brands.”

Expect to see more marketing around Chivas 18 and 25 Year Old blends in Brazil, and across a Latin America region that is traditionally known for 12-year-old whiskies.

Native Scotch

However, premium international brands must still mix with Scotch blends that have “gone native” to the extent that many outsiders either don’t know them or have forgotten they existed. Names like Passport, Old Parr and Haig are not just gathering dust on bar shelves, while Pernod’s Something Special has enjoyed a decade of success via its collaborative ‘Enbotellarte’ competition with regional artists.

To emphasise the point, Diageo reported Buchanan’s net sales up 25% in its last full year, with Johnnie Walker up 12%. In Brazil, Pernod reported Chivas sales up 10% and Passport up at more than double this rate.

One Response to “Scotch and vodka show Latin America promise”

  1. Bruno Martinhão says:

    I just came from San Andres Island which has the best prices I ever seen. I could buy Buchanans 18, Royal Salute 21 and a Macallan Select Oak. This is pretty much related to this article. Latin America has a path to the premium brands. We don’t want just Johnny Walker and Old Parr but we do make a price comparison and the difference is large today mainly in local markets.

Leave a Reply

If that's interesting, how about these?

Royal Dragon Vodka to grow GTR presence

Royal Dragon Vodka has announced a partnership with Gebr. Heinemann as part of more...

Ardgowan recruits former Bruichladdich and Diageo directors

Planned lowland distillery Ardgowan has appointed Bruichladdich's former more...

Writers Tears secures Australian distribution

Walsh Whiskey Distillery has named Spirits Platform as the distributor of its more...

Asahi Group’s spirits business slips 6.1%

Nikka owner Asahi Group saw its full-year whisky and spirits sales contract more...

Robinson marks 40 years of whisky at Diageo

Maureen Robinson, master blender for single malts and blended whisky at Diageo, more...

Russian Standard Vodka makes debut in Iceland

Russian Standard Vodka has entered the Icelandic market for the first time more...

Angostura appoints Jodhan as permanent CEO

Rum and bitters producer Angostura Holdings has confirmed its acting CEO more...

Tito’s reveals South America TR strategy

Tito’s Handmade Vodka is to use the upcoming IAADFS Duty Free Show of the more...

Beam Suntory buoyed by emerging markets

Suntory Holdings’ spirits arm Beam Suntory posted “mid-single-digit” more...

Top 10 most collectible Scotch brands of 2016

Sellers are becoming "more confident" in placing high value bottles at auction, more...

Tito’s vodka ramps up US TR activity

Tito’s Handmade Vodka has launched a series of “high impact” activations more...

Heaven Hill 'diligently' hunts for acquisitions

Following its takeover of Deep Eddy Vodka in 2015, US spirits firm Heaven Hill more...

SWA outlines 'pressures of tax burden' to UK Treasury

Representatives from the Scotch Whisky Association (SWA) have met with the UK more...

Registration opens for TFWA Asia Pacific 2017

Delegates are now able to register for the upcoming TFWA Asia Pacific more...

Scotch records 'best year' for exports since 2013

Scotch whisky exports have increased by both volume and value for the first more...

Wemyss releases 2017 single cask batch

Edinburgh-based independent bottler Wemyss Malts has released its latest batch more...

Bacardi buys minority stake in Ilegal Mezcal

Bacardi has confirmed its acquisition of a minority stake in Ilegal Mezcal, but more...

Mattioni: Premium rums will ‘definitely develop’

The premium-plus rum segment in the UK will "definitely develop", driven by more...

Diageo's India centre may serve 70 markets by 2020

Diageo's new India-based business services centre is "likely" to become one of more...

SWA urges MEPs to back CETA deal

The Scotch Whisky Association has called on MEPs to back the EU-Canada more...