Brazil has one of the fastest-growing economies in the world – with an average annual GDP growing at a rate of over 5%, and it is poised for even more growth with the country hosting the upcoming 2014 World Cup and 2016 Olympics. Brazil’s national spirit, cachaça, is starting the look like the emblem of this growth, as many have it picked to be the next big thing in global spirit markets.
Cachaça, a white spirit related to rum, is the ninth-largest global spirits category at 82.7m nine-litre cases according to a recent report from The IWSR and just-drinks. The spirit differs from rum in that it is made from fresh sugarcane juice instead of with molasses. It also has lower ABV, which is designated by a law requiring the spirit to be distilled to only 38% to 48% alcohol. It’s these differences that give Cachaça its characteristic taste that is often described as clean, fresh and light, making the spirit perfect for mixing with fresh herbs and fruit juices. A prime example is cachaça’s signature cocktail, the Caipirinha, a mix of muddled lime, sugar, cachaça and ice that will surely be the spirit’s means of entry into new markets.
Reflecting the up-and-coming position of the spirit, drinks giant Diageo has recently purchased Brazilian brand Ypióca, the third-biggest cachaça brand by volume and second biggest by value. The brand boasted sales increases of 14% annually from 2007.
The move, which cost Diageo about 300 million pounds, is part of the company’s effort to obtain half of all sales from emerging markets by June 2015.
This follows the acquisition of the Sagatiba premium cachaça brand by Campari do Brasil in August 2011. Sagatiba is a small brand as the premium cachaça market accounts for only a fraction of the category but it can be grown both in its domestic market and in many of the company’s other leading markets, such as Germany, Italy and the US.