This week, we took a look at Brazil’s growing energy-drinks market as Britvic makes moves in the country, dived into Tequila and mezcal’s prospects in the US and looked into the African continent’s spirit consumption as Diageo announced plans to establish a wholly owned spirits-focused business in West and Central Africa.
Brazil buzzing for energy drinks
Brazil’s energy-drinks category could see double-digit growth in annual sales by value by 2027, according to a five-year CAGR estimation by GlobalData, Just Drinks’ parent company.
While the category’s CAGR declined in value between 2018 and 2020, it has been on a steady growth trajectory, with the total sales value set to hit $2.4bn by 2027.
It comes as Britvic yesterday announced a move to acquire three more brands in Brazil, one of the UK group’s largest overseas markets.
Announcing the completion of a deal to buy Extra Power energy drinks, the company said it would also take on Juxx juices, Amazoo açaí smoothies and another energy drinks brand – Flying Horse.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Britvic is acquiring all four brands from Brazil-based drinks group Globalbev Bebidas e Alimentos. Financial terms were not disclosed.
US thirst for Tequila and mezcal to continue
Combined annual sales for Tequila and mezcal in the US could reach $14.21bn by 2027 with a ten-year CAGR of 7.6%, data shows.
Analysis from GlobalData suggests the category will continue its steady growth trajectory following a blip during the pandemic in 2020.
It comes as US-based Foley Family Wines told Just Drinks it was looking to add a Tequila to its burgeoning range of spirits.
In an exclusive interview, president Shawn Schiffer said the group is in the “process of sourcing” a Tequila that it plans to sell in Europe and the US. The Tequila will be made by a distillery partner in Mexico.
The wine-focused company entered spirits in May, with the acquisition of a distillery in Minden in Nevada, and it is also mulling an entry into the low-and-no alcohol category.
High hopes for African spirits market
The African spirits market is expected to reach a value of $16.6bn by 2027, from a 2016 low of $10bn, according to GlobalData forecasts.
Aside from a 2020 drop in sales to 9.7bn during the pandemic, the market has been slowly increasing in value since 2016, having been flat from 2008.
It comes as this week Diageo announced plans to establish a wholly owned spirits-focused business in West and Central Africa.
Diageo’s spirits have been distributed by Guinness Nigeria since 2016. In the financial year ended 30 June 2023, 6% of Guinness Nigeria’s revenue was derived from imported Diageo spirit products.
Meanwhile, in its 2023 annual report, Diageo reported operating profits of £176m from its African business, a decrease of 44% on the previous year (£315m). Net sales of spirits, however, grew 8% driven by the increasing popularity of Johnnie Walker, while beer net sales grew by 3%. It said its strategy in Africa was “to grow our beers fast and our spirits faster”.
David Harris, alcoholic beverages research director at GlobalData, said: “[Diageo] will be counting on growing moves towards spirits amongst younger African drinking-age consumer, who are increasingly seeking domestically-produced products which resonate with them, rather than imported Western brands.”
He added: “Their strategy seems to be going all in on Africa, essentially treating their operations in the region like a separate business sequestered from Diageo, while still wholly owned as a subsidiary.”