Distillate market shrinks and high income search

The deepening of the economic crisis affected as a whole the distillates market. Categories which still grew last year, like vodka and tequila, presented a retraction in sales in the first months of 2016. Threads with lower prices, such as rum, also shrank.
According to data from Nielsen, in the 12 months to May this year, the basket of alcoholic beverages had 4.2 percent sales drop. Cachaça-which accounts for 78% of the market of distillates in volume-registered 3.1 percent retreat. There was also a fall in beer (3.5%), whiskey (14.9%), vodka (5.5%), fine hors d''oeuvres (4.9%), Brandy (9.4%) and rum (26.9%).
For Ricardo Gonçalves, President of the Cla Müller de Bebidas (dona da Cachaça 51), the retraction is a result of the recession. "The main audience are of classes C and D, which reduced expenses outside the home, including alcoholic drinks," he said.
In addition, the Executive adds, the breweries acirraram the competition with ice drinks [mixtures with a basis of vodka, rum or beer], damaging the distilleries, which compensated for part of the drop in sales of cachaça with this new category. 51 Ice line is designed to attract the young audience, which is used to make rum, but appreciates other distillates.
In search of higher consumer income, the Cia. Müller de Bebidas reinforces the special cachaças line, with new versions of the 51 Reserve, arriving at retail this month. While a bottle of 51 can be purchased for $ 12, 51 reserve does not leave for less than 150 R$. In 2015, the company sold 379,700 premium rum bottles, 50% more than the previous year. Is a still small volume, considering the company''s production of 180,000,000 liters/year.
The company will also extend the retail distribution, to satisfy the consumer who reduced the trip to bars and restaurants, but still consuming the booze in the House. The Cla. Müller closed 2015 with revenues of R$ 638,600,000, a fall of 0.4% before 2014. The net profit retreated 17%, to R$ 41,000,000. The forecast for this year is to grow from 4% to 5% in revenue, whereas a fall in sales volume of 2% to 3%.
The Cla. Müller leads the market of cachaça, with 17.4% share by volume, according to Euromonitor International. Then come the Industries Gathered drinks Armadillo (owner of the Old brand Barreiro), with 9.8%; and Diageo, owner of the Ypióca group, with 9.7%.
Angélica Salado, an analyst at Euromonitor International, notes that all the spirits sector suffered the impact of the reduction in the purchasing power of consumers and the increase in the tax burden. The rise in production costs and import drinks ready also detracted from performance. "The expectation for this market is that there is a recovery only starting in 2018, with the improvement of the economy in the country," said Angelica.
The Gruppo Campari, which produces the cachaça Sagatiba, Skyy Vodka and the aperitif Campari, reported that sales fell in the first quarter, but due to a move of anticipation of purchases made by distributors in 2015. "Many customers, already knowing the increase in IPI from December, anticipated orders. As a result, the sale was lower in the first quarter, but now the pace if normalized, "said Carlos Moura, Director General of Campari Group in Brazil.
According to him, the company showed growth in sales in the categories of bourbon, tequila, rum, Gin and liqueurs. "There is a movement polarized. Special categories still growing. Already popular portfolio had drop in sales, mainly in bars, "he said. To retrieve market, Campari has changed the distribution, expanding the offer in supermarkets and atacarejo networks.
The Campari also reinforces the offer of special lines to compensate for the weaker results in the area of low-cost drinks. The company put on the market recently, the line of bourbon rye-based Wild Turkey, the Cinzano 1757 (Vermouth) and the rum Appleton Estate aged 12 years Rare,. According to Moura, the company plans to make one more big launch in the country this year.
In the first quarter of the year, according to global balance sheet of the company, Gruppo Campari recorded 27% drop in sales of the brands Dreher and Sagatiba. Have special markings, such as Aperol, Wild Turkey and Appleton grew. Sales in Brazil accounted for 1.7% of the overall revenue of the group for the quarter reached € 327,400,000. In the world, the company''s sales were stable.
For the French Rémy Cointreau, which concentrates production in distillates of high added value, the biggest problem was the increased tax on industrialized products (IPI), which in December 2015 has become of 30% on the selling price. Before, the charges varied by category, with fixed values of 0.14 to 17.39 R$ R$.
"The company was able to offset the exchange rate with the stockpile management. But the IPI had to be passed on to the consumer, "said Bruno Trevisan, Manager of Rémy Cointreau for the South American region and Chief Executive of the company in Brazil.
Trevisan said that the lines of cognac, rum, Scotch, bourbon, Scotch, American gin and vodka had 30% average increase in prices this year. According to the Executive, even with these adjustments, Cointreau liquor sales have grown between 25% and 30% in the period from April to June. In relation to the Cognac Louis XIII, which comes to cost 25000 retail R$, there was no drop in sales.
"The market did stocks before the increase of IPI. I believe that the sales volume is resumed at the end of the year, "he said. The Rémy Cointreau reported further that will strengthen the luxury drinks lines in the country to ensure revenue growth even if there is reduction in sales volume.
In the company''s fiscal fourth quarter, completed in March this year, the Rémy Cointreau reported 12.2 percent increase in overall sales, to € 224,200,000.