Whiskey is not by far the most common drink in Brazilians’ glasses. And this is one of the reasons why the largest global producers of the drink see Brazil as a sea of opportunities to be explored.
Chivas Brothers, a Scottish conglomerate founded in 1789, which owns brands such as Royal Salute, Ballantine’s and Passaport, is one of the companies that has Brazil at the center of its growth strategy.
There are plenty of reasons for this. Latin America accounts for 10% of market share of the group, and Brazil is the third market in the world that most advanced in whiskey consumption between 2021 and 2023, with an increase of 16%, behind only Japan and India, according to Euromonitor International.
Frenchman Jean-Etienne Gourgues, chairman and CEO of Chivas Brothers, was recently in Brazil with the mission of strengthening the conglomerate’s brands here and preparing the launch of new products.
In an exclusive interview with NeoFeedhe explains what he defines as “less but better”: “We want consumers to drink less, but with more quality”.
According to data from Euromonitor, much of the growth of the whiskey market in Brazil is driven by younger people, willing to try the distillate in different versions. “Flavored whiskeys are sweeter and fruitier and attract those who rejected the drink in the past,” says Gourgues.
Another very important factor in this equation is the greater demand among Brazilians for premium Blue Label labels, which can easily exceed R$1,000 per bottle. “For us, target is more important than volume”, defines the CEO.
Check out the best excerpts from the interview below:
What explains the CEO of a beverage company wanting consumers to drink less?
We have the largest reserve of aged whiskeys in the world, which allows us to offer exceptional drinks. In Brazil, the best example of this is the growth of Royal Salute, which is today our most prestigious brand in the country. Consumers who used to drink other premium drinks such as wines now also drink more expensive whiskeys, and this segment has grown a lot in recent years.
But isn’t this risky for the business?
We believe that the future is about drinking less and drinking better. Of course, this varies depending on the occasion of consumption, but in general, people will drink less and demand more quality. In my opinion, this change strengthens brands and makes them more sustainable.
Selling fewer bottles?
For us, target is more important than volume. Last year, our sales volume remained stable, however, we grew 17% globally. If you think about the number of bottles sold, the number may be a little lower, but in terms of revenue, no. A Royal Salute whiskey can cost R$1,000, while a bottle of Passport Scotch costs R$25.00. If you sell more Royal Salute and less Passport, the number of bottles will be smaller, but even so, the brand is strengthened.
What is the relevance of the Brazilian market for Chivas?
Latin America is one of the key regions for Chivas and accounts for 10% of our market share. We have a large portfolio in the region, particularly in Brazil, where our biggest brand is Royal Salute. On my recent visit to the country, I spent a week visiting customers and partners in order to develop our brands and work on launching new products over the next 24 months. Brazil is a market that we are very excited about, mainly because whiskey consumption has increased considerably in recent years.
In Brazil, the two leaders in the segment are Johnnie Walker and Jack Daniel’s. What else have you done to achieve market share?
For the last five years, we have been focusing on younger consumers. We have been working to understand this consumer and dialogue with him assertively. One of our strongest brands among young people is Ballantine’s, which began sponsoring major festivals in Brazil not only for visibility, but also to connect consumers to the brand on a consistent basis.
Is the appeal of whiskey among younger people a global trend?
Yes, it is a global trend. One of the reasons is that whiskey is a large category with a lot of brands on offer. If you compare the supply of whiskey on the shelves today to what there was five years ago, you can see a huge increase. Currently, stores have hundreds of brands for sale, each with its own proposal, and this helps consumers to make better choices and attracts the attention of young people.
“The TikTok generation behaves differently from the Instagram generation, which in turn, is different from the Facebook generation. What happens digitally also happens in the real world when we talk about consumer profile”
So is the consumer profile changing?
I would say that the consumer profile is increasingly broader, and each type of consumer is looking for something different. The TikTok generation behaves differently from the Instagram generation, which in turn, is different from the Facebook generation. What happens digitally also happens in the real world when we talk about consumption profile. In our case, Royal Salute, with a higher average ticket, is popular among people in their 40s. Ballantine’s is a more accessible brand with much greater appeal among young people.
But what is the reason for this change?
Part of this is due to the greater supply of whiskeys and brands on the market. Today, we have flavored whiskeys, which didn’t exist a few years ago. For younger consumers, traditional whiskeys can be too strong, but flavored whiskeys are sweeter and fruitier, attracting those who previously rejected the drink. Especially in São Paulo and the South of Brazil, our flavored whiskeys are very successful.
