Spirits - South America

The Spirits market in South America has been experiencing significant growth in recent years, driven by changing customer preferences and local special circumstances. Customer preferences in the Spirits market in South America have been shifting towards premium and craft spirits. Consumers are becoming more discerning and seeking out unique and high-quality products. They are willing to pay a premium for spirits that are locally produced, made with traditional methods, and have a distinct flavor profile. This trend is driven by a desire for authenticity and a preference for supporting local businesses. Additionally, there is a growing interest in experimenting with new flavors and ingredients, leading to an increased demand for flavored spirits and innovative cocktails. In terms of trends in the market, there has been a rise in the production and consumption of agave-based spirits, such as tequila and mezcal, in South America. These spirits have gained popularity due to their unique flavor profiles and the growing interest in Latin American culture and cuisine. Agave-based spirits are also seen as premium products, further driving their demand in the market. Another trend in the Spirits market in South America is the rise of craft distilleries. These small-scale producers are focusing on creating high-quality and artisanal spirits, often using traditional production methods and locally sourced ingredients. Craft spirits are appealing to consumers who value authenticity and are willing to pay a premium for unique and handcrafted products. Local special circumstances also play a role in the development of the Spirits market in South America. For example, in countries like Brazil and Argentina, there is a strong tradition of consuming spirits, particularly cachaça and rum. These spirits are deeply ingrained in the local culture and are enjoyed in various social settings. This cultural affinity towards spirits has created a stable demand for these products in the market. Additionally, South America has a rich tradition of producing and consuming traditional spirits, such as pisco in Peru and cachaça in Brazil. These spirits have a protected designation of origin, which ensures their quality and authenticity. This has helped to promote these traditional spirits both domestically and internationally, contributing to their growth in the market. Underlying macroeconomic factors also play a role in the development of the Spirits market in South America. Economic growth and rising disposable incomes have led to an increase in consumer spending on premium and luxury goods, including spirits. As the middle class continues to expand, more consumers have the financial means to indulge in higher-end spirits. Additionally, the tourism industry in South America has been growing, attracting visitors from around the world. These tourists often seek out local spirits as souvenirs or to experience the local culture, further boosting the demand for spirits in the market. Overall, the Spirits market in South America is experiencing growth due to changing customer preferences, local special circumstances, and underlying macroeconomic factors. The market is expected to continue to expand as consumers seek out premium and craft spirits, and as the region's cultural and traditional spirits gain international recognition.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.