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The Brazilian viticultural industry is centred in the country’s southern state of Rio Grande do Sul (RS), home to just over 90% of domestic production. The remaining 10% is divided among nine other states, mostly in the northeast. There, and in particular in the Vale do São Francisco, along with a few municipalities of Minas Gerais, estates are able to harvest two crops a year. Production in RS is in the hands of 12,829 properties growing vines on nearly 40,000 hectares and 620 winemaking companies. The largest include Bacardi Martini of Brazil, Cia Vinícola Aurora, Cave de Amadeu, Miolo, Salton and Casa Valduga.
Total grape production in 2005 was 493m kilos, 422m of which were essentially table grapes, with only 70m kilos coming from vineyards planted with vinifera stock. Overall wine production totalled 325m litres, of which 271m litres were wine, light wine and liqueur wine. Those numbers clearly indicate that the production of high quality grapes remains far below Brazil’s production capacity and needs. Winemaking is still in its infancy, but growing fast. The municipality of Flores de Cunha tallied the highest production in 2005, with a total of 91m litres, followed by Bento Gonçalves with 55m, Caxias do Sul with 28m and São Marcos with 19m litres. These are the four major wine producing regions in the state.
Wine market
In 2003, when the last statistics were made available, Brazilians consumed an average of 1.75 litres of wine
per head, with the states of São Paulo and Rio de Janeiro accounting for 50% of the entire volume. Most wine is bought and drunk in the two capitals. So, although there is no official data, actual wine consumption in the cities of Rio de Janeiro and São Paulo, In Brazil, peak demand occurs in the winter months from May to July, at
Easter and during the Christmas period. The latter two periods of Christmas and Easter account for 30% and 35% of total volume, respectively. While the profile of the traditional wine consumer is a person between 30 and 65 years of age, younger consumers between the ages of 25 and 30 belonging to the upper class drink more imported wine and this group’s consumption is rising.
Higher quality imports
Overall, more men drink still wine with women preferring sparkling and Champagne. Even so, 65% of the
purchases made at large retail outlets are done by women. Further, as Brazilian consumers become more
interested in higher quality, imported wine is showing real potential for significant growth. With a stable foreign exchange rate and further economic growth predicted, analysts expect the base of wine consumers in Brazil will consolidate and the number of new consumers increase. As elsewhere, price is the decisive factor. The uncertainty resulting from a lack of product knowledge also leads most consumers to prefer brands. Nonetheless, because wine is largely associated with tradition, the origin and source is still |
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very important.
Consumer decisions are, not surprisingly, greatly influenced by the occasion. Special festivities such as anniversaries, weddings or even weekends are often celebrated with wine. In São Paulo, wine consumption reaches its peak on Sunday. That is the day the city’s inhabitants traditionally eat pizza at Italian restaurants.
Sommeliers also play an important role as opinion makers. Internal production is not sufficient to meet consumer demand and imported wine is a rapidly growing part of the market. In 2006, Brazilian table wine imports rose by 25.8% in volume and 39.8% in value, due largely to the dollar’s slide against the real and the
performance of imports in the month of December.
Chile tops the charts
Brazil imported 45.3m litres of table wine worth $118m in 2006. The main suppliers were Chile, Argentina,
Portugal, Italy and France, which together accounted for 95% of all imports in both value and volume, up
from 92.7% in 2005. Over the years, Chile has consolidated its position as the main supplier of table wine to Brazil. Further, there is more commitment by consumers to higher quality wine segments. In 2006, Chilean exports rose 31.8% in volume and 44.2% in value over 2005, reaching 14.59m litres worth $36.64m and a market share of some 32%. Argentina remains in second place. While volume rose 10.8% from 10.6m
litres in 2005 to 11.7m litres in 2006, value increased by 19.7%. At the same time, the average price rose from
$2.03 in 2005 to $2.19 in 2006. However, Argentina surprisingly lost market share, dropping from 29.4% to
25.9% in volume and sliding from 25.5% to 21.8% in value. Portugal, probably because of the common language, is in third place among Brazil’s top wine suppliers, but first among the European suppliers,
overtaking Italy in 2005. In 2006, Portugal exported 5.86m litres of wine worth $18.8m, a growth of 17.2% in
volume and 29.87% in value over 2005. Its market share during this period grew to 12.9% in volume, still behind Italy, and 16% in value. Italy now ranks fourth in the charts. Exports grew in 2006 by 52.6% in value, rising from the $11.1m registered in 2005 to $17m. During this period Italian market share climbed from 16.1% to 17.5% in volume and from 13.2% to 14.4% in value. France, following a poor showing in 2005, saw its table wine exports rise significantly in 2006. Although it accounts for only 5.5% of volume, France’s market share was a healthy 8.85% in value.
Distribution channels
While supermarkets and hypermarkets account for 70% of the import volume, hotels and restaurants account for another 20% and shops the remaining 10%. Of the imported wines, 43% is purchased directly from the
supplier and 57% through distributors. Of direct imports, the most prominent players are the groups Pão de Açúcar, Carrefour, Sonae, Sendas and Casa Santa Luzia. Most of the major specialised importing companies, such as Expand, Mistral or Interfood, are based in São Paulo. Expand is the largest wine importer in Brazil and
currently represents 2,500 labels. Still, while imports continue to grow, and foreign producers naturally look closely at the consumption habits of Brazil’s 190m inhabitants, the unanswered question is whether the
country, with its low wages and multiple harvests, might not soon be a net exporter of wine.
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