BRAZIL: Diageo snaps up Ypioca, as domestic spirits gain further appeal
Ypioca holds around 8% market share in Brazil's cachaca market
Diageo is set to make another domestic spirits play in an emerging market, this time by acquiring the Ypióca cachaça brand in Brazil from Ypióca Agroindustrial Limitada.
The UK-based spirits giant, which also holds majority control of the majority owner of Chinese baijiu producer Shuijingfang, confirmed early this morning (28 May) that it will spend BRL900m (US$453.9m) on the brand, which is the market leader in Brazil's “premium” cachaça market. In the overall cachaça market, Ypióca is the second largest player by value and the third largest by volume, according to Diageo. It accounts for 8% of total market share, with annual sales of 6.6m nine-litre cases.
In 2011, Ypióca delivered net sales of around $89.3m. The brand also boasts a sales and distribution network in the north-east of the country, and the second largest retail penetration nationwide.
The company said it believes the move “enhances access to the growing number of middle-class consumers who are driving the growth of premium brands”.
”The acquisition of Ypióca gives us the leading premium brand in the largest local spirits category,” said CEO Paul Walsh. “It will also provide Diageo with an enhanced platform from which to accelerate the long-term growth of our premium international spirits brands in Brazil.
”This investment represents the continuation of our strategy to increase Diageo’s presence in the fastest growing economies of the world.”
The purchase, which also includes “certain production assets”, is expected to complete within a month.
To read the company's official statement, click here.
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