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Brazil: An untapped opportunity for Australian wine in the Southern Hemisphere

Market Bulletin | Issue 290
06 Jun 2023
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Brazil is the seventh most populous country in the world and home to the fifth largest city in the world – and the largest in the Southern Hemisphere – Sao Paulo. It is the largest country by land area in the Southern Hemisphere (yes, it is larger than Australia!) and second only to Indonesia in population. Well known for its coffee exports, it is slowly becoming known in the wine sector for its increasing imports of wine. This Market Bulletin will give an overview of the current conditions for wine in the Brazilian market.

Economic state

Like many economies in the world, Brazil has had a turbulent few years. Due to global events and political instability, the local currency (Brazilian Real) has been highly erratic throughout 2020, 2021, and 2022, making it hard for businesses to plan the cost of imported goods . 

Figure 1: US Dollar/Brazilian Real exchange rate 2019-2023

Source: OANDA

Also like many other economies, 2020 resulted in a significant drop in GDP growth, followed by a strong rebound in 2021 (see Figure 2). However, thanks to inflationary pressures and political instability, economic growth is forecast to be muted for the next few years. Inflation reached a level of 9.28 per cent in 2022, which surpassed the inflation rates of the 2014 Brazilian economic crisis (see Figure 3) but are forecasted to moderate in 2023 and beyond.

Figure 2: Growth rate of Brazil’s real GDP from 2018 to 2028

Figure 3: Inflation rate from 2011 to 2028 in Brazil


Wine consumption grew during pandemic

In the years up to and including 2020, the volume of wine consumption in Brazil was on the rise, growing on average 12 per cent per annum between 2017 and 2020. During the COVID-19 pandemic, consumers gravitated towards wine and the category experienced robust growth. In the years that followed, the volume of wine consumed declined, while value has continued to rise (see Figure 4). The Brazilian wine market is now 47 million 9-litre cases in volume (roughly the size of the Canadian wine market), worth US$3.4 billion (roughly the size of the Japanese wine market in value). 

Figure 4: Volume and value of wine consumption in Brazil

Source: IWSR

The growth in value and decline in volume is driven by a decline in the sales of locally produced wine and an increase in imported wine sales. In 2022, imported wine sales grew by 7 per cent in value to gain a 63 per cent value share, while Brazilian wines declined by 4 per cent in value (see Figure 5). Imported products are sold at a more premium price point, with the average value per bottle in retail being US$11.89, compared to US$3.65 for locally produced wines.

Figure 5: The retail value of imported vs locally produced wines in Brazil

Source: IWSR

Although progress has been strong for imported wines, growth is expected to move at a slower pace (5 per cent per annum) over the next five years. However, this is mostly the case for the largest imported sources – Chilean, Portuguese, and Argentinian wines. Smaller source countries – including the United States, South Africa, and Australia – are expected to continue growing strongly (see Figure 6). There is a large amount of uncertainty in the Brazilian market due to economic and political factors, and the slower growth rates for the wider wine category, after a period of pandemic growth, are reflective of that. 

Figure 6: Value growth by imported origin, past 5 years versus next 5 years

Source: IWSR

The wine category in Brazil is still very much a niche category, with Brazilian adults consuming around 2.6 litres per person per year. According to Wine Intelligence, last year there has been growth in regular wine drinkers (those who consume wine at least once a month) who also consume spirits and RTDs, indicating that consumers of these beverages are becoming more involved with the wine category. There is also positivity around the on-premise channel opening back up, with a return to a pre-pandemic level of sales in 2022.  

Australia: small but growing

Australia has a very small share of the Brazilian wine market – only a 0.4 per cent value share of imported wines to be exact. However, it is expected to grow at the strongest rate of the top ten imported origins in the next five years – by 13 per cent per annum on average. 
While only 14 per cent of regular wine drinkers are aware of Australian wines, regular wine drinkers in Brazil are becoming more involved in the category – becoming more confident in their knowledge and expertise – which bodes well for more niche source countries .  

Figure 7: Country of origin awareness of Brazilian regular wine drinkers

Source: Wine Intelligence

Brazil is Australia’s third largest market in the Americas, after the United States and Canada, and well ahead of Mexico and Uruguay in fourth and fifth place. In the year ended March 2023, Australian wine exports to Brazil doubled in volume to 760,000 litres and more than tripled in value to $6.1 million free on board. Red wines make up 90 per cent of the volume shipped to Brazil, with Shiraz and Cabernet Sauvignon driving growth. 

This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.