Diageo expands distribution and sophisticated cachaça Ypióca group

British Diageo, the world's largest manufacturer of distilled and dona Ypióca Group brand, will increase the distribution of its flagship brand of cachaça, as a way to increase sales amid a backdrop of retraction of consumption of the drink. The company has developed lines of high added value, taking advantage of the demand still heated by premium categories.
According to data from Nielsen, the accumulated 12 months to September, sales of cachaça in country fall 4.5% in volume and grow 4.5% in revenue. The cachaça with high added value, in turn, show an increase of 14% in volume and 21% in revenue.
Alvaro Garcia, Director of marketing for Diageo to Brazil, Paraguay and Uruguay, said that sales of Diageo of Ypióca group are stable this year compared to the same period last year.
The Ypióca group is the third largest brand of rum in the country, with 10 percent of the market, according to Nielsen. The leading brand is 51, CLA. Müller, followed by Old Barreiro, industry Gathered for Drinks Armadillo-3 Farms.
In the fiscal year ended June, Diageo's sales in Latin America and the Caribbean had 10% drop, to 1.033 billion pounds (US $ 1,564 billion) operating profit fell 18 percent to 258 million pounds ($ 390,51 million).
Sales in the region of Paraguay, Uruguay and Brazil fell 2 percent in volume and 12% in revenue, influenced mainly by the devaluation of the Brazilian real and the retraction of consumption in Brazil, according to the company's balance sheet.
The goal of the company is to make the best-selling brand of Ypióca Group Brazil, within a period of five to ten years. "Since the acquisition in 2012, Diageo is working to expand the brand. The company has increased its production capacity, but still have very concentrated sales in Ceará. The company makes a move to expand the distribution, starting from square to square of Rio de Janeiro and Sao Paulo, "said Garcia. The distribution will be made by the team of Diageo and liquor distributors.
Garcia said the company will take advantage of the distribution network has in the Center-South of the country for delivery of Smirnoff vodka and Johnnie Walker whisky to expand sales of the Ypióca group. In the Northeast, leverages the network of distributors of cachaça to make the delivery of other drinks.
From 2012, when it acquired the Ypióca group for $ 450 million, Diageo increased the number of outlets reached 270 000 to 300 000 establishments. Last year, the company expanded distribution in 9.5 thousand points of sale. Ypióca group production from 2012 was expanded to 6 million boxes a year to 8 million.
The Ypióca Group's production is made in a plant in Paraipaba (EC), and the filling is made Beja district, in Fortaleza. These plants are capable of producing 126 million litres per year of distilled beverages. The units are also used for production of Smirnoff vodka.
Diageo begins to distribute at retail this month two lines of high added value. A version of the Ypióca group with honey and lemon, with a suggested retail price of $ 18 per bottle. And a premium line, made by hand, with a suggested retail price of $ 150 a bottle.
In addition to enhancing production and distribution, Diageo hired AlmapBBDO to develop a new marketing campaign. "The AlmapBBDO did an important job with the Hawaiian tag [Sneakers] and our goal is to achieve the same with the Ypióca group, transform a Brazilian brand, a former consolidated modern national icon for export," said Garcia.
The distilled spirits market moved in country 1.08 billion liters in 2014 and generated revenue of $ 11.10 billion in 2014, according to data from Euromonitor International. Cachaça, largest category of distillates, totaled 856.1 million litres in sales last year, generating revenue of $ 7,39 billion. In the period from 2009 to 2014, the cachaça market grew, on average, 2.4% in value, and fell 2.6% in sales volume.