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?

Distell and Stock Spirits ink UK distribution deal

Central and Eastern European producer Stock Spirits has expanded its more...

Fever-Tree celebrates 'exceptional' FY results

Premium tonic and mixer brand Fever-Tree has hailed an "exceptional year of more...

Baileys makes Almande vegan-friendly

After demand from the vegan community, Diageo has removed beeswax from its more...

Unmissable exhibitors at IAADFS 2017

For the final IAADFS Duty Free Show of the Americas in its current form, taking more...

Spirit of Speyside to host 'whisky cache'

The Spirit of Speyside Whisky Festival will this year host a geocaching event more...

Last Drop releases 1972 Lochside single grain

Rare whisky bottler The Last Drop Distillers has launched a 1972 single grain more...

Breakthru Beverage restructures leadership team

Breakthru Beverage Group has announced a new leadership structure for its more...

SWA hails £30bn Scottish trade ambition

The Scotch Whisky Association (SWA) has welcomed a new strategy by the Scottish more...

Diageo unveils 'industry first' e-learning tool

Diageo has launched a new e-learning tool on its responsible drinking website more...

Southern Glazer’s hires Redell for Campari brands

US drinks distribution company Southern Glazer’s Wine & Spirits has appointed more...

Lindores Abbey Distillery launches members' club

Lindores Abbey Distillery in Fife has opened sales for its Preservation more...

Captain Morgan rum launches coconut shot

Diageo-owned Captain Morgan is aiming to enhance its presence in the shots more...

Baijiu category beats whisky on value

The global baijiu category has overtaken whisky to become the most valuable more...

Adnams hails 66% spirits volume growth

Suffolk-based brewer, distiller and retailer Adnams witnessed 66% volume sales more...

Rum's renaissance 'a complex picture of growth'

Rum might be the last spirit category to truly go premium, but there’s more...

Sidney Frank rebrands as Mast-Jägermeister US

Sidney Frank Importing Company has changed its name to Mast-Jägermeister US more...

Devils River Whiskey debuts with grain focus

President of the Texas Distilled Spirits Council Mike Cameron has launched more...

Deep Eddy Vodka hits one million case sales

Heaven Hill Brands-owned Deep Eddy Vodka has exceeded one million annual case more...

Tamdhu releases 50yo anniversary whisky

Ian Macleod Distillers is celebrating the 120th anniversary of its Speyside more...

Tito's to plug distribution gaps in Asia

The team behind Tito’s Handmade Vodka has said its key aim around the TFWA more...