Brazilians' need to disconnect is driving premium beverage growth, says Euromonitor
One of the biggest changes currently shaping the beverage industry is the move from in-bar to at-home consumption, according to Euromonitor analyst Angélica Salado.
She attributed this to consumers’ desire to disconnect from the pull of social media and smartphones and find ‘the joy in missing out’, known as JOMO. Premium-positioned, craft or artisan beverages allow them to recreate the experience of drinking in bars or restaurants in a more intimate setting.
“They are breaking away from the need to stay connected and share their habits,” she wrote in an online blog (in Portuguese). “[They] are more interested in experimentation and higher value-added brands [for] in-home consumption. They are allowing themselves to consume more sophisticated products as a form of self-indulgence.
"This is impacting the brands they consume, as they choose the brand according to the occasion of consumption: a brand to take with friends in bars; others on occasions such as barbecues; others at home for when they are alone.”
Craft beer is one beverage riding on this wave. According to Euromonitor data, premium beer consumption in Brazil grew by an average of 3.7% per year between 2012 and 2017 while retail-only sales were even higher, at 4.4% for the same period.
Pratinha’s Magic Booze, a concentrated and bottled Indian Pale Ale (IPA) that consumers 'craft' themselves by adding sparkling water, is an example. According to Pratinha, its first batch sold out within 24 hours of launching and Mintel analyst Lynn Dornblaser selected it as one of the most innovative food and drink products of 2019, describing it as unique.
“The original drink is produced the usual way, but then it goes through a process of freezing at very low temperatures and pressure reduction, which sublimates the liquids," she said. “After this process, the drink gets a new addition of malts and hops of aromatic profiles and adjusted alcohol content.”
Premiumization is not limited to alcoholic drinks such as craft beer or gin, however.
Brazil’s RTD tea category has boomed in recent years and products span the full spectrum, ranging from “super affordable brands - including private label - to super premium and functional versions”, said Euromonitor.
The market data company suggested that small and regional players are growing faster in off-trade volume terms for RTD teas but some of Brazil's big beverage are trying to meet demand for premium RTD teas. At the end of 2018, for instance, Danone Waters Brazil launched 4U, a range of premium carbonated juices and flavored teas made with natural ingredients and free from preservatives or artificial colors.
Manufacturers of RTD coffee, which already has mass appeal in Brazil, can offer up-market products thanks to the trend for bullet coffee. Made with brewed coffee, butter and medium-chain triglyceride (MCT) coconut oil, the drink is popular with individuals on a high-fat, low-carb diet.
Organic brand Puravida sells a bullet coffee kit that includes coffee, MCT coconut and ghee – clarified butter - made with milk from grass-fed, antibiotic-free cows. It also recently launched an RTD bullet coffee suitable for vegans made with coconut oil and cold-brew coffee, available in a 300 ml carton.
“Although it costs around four times more than a regular RTD coffee brand in Brazil, the [bullet coffee] beverage concept has been attracting consumers, especially those who are heavy sports practitioners,” said Euromonitor. “Over the next few years, the brand [Puravida] is not expected to be democratized but could lead the way for other brands to offer similar solutions.”
Ingredient suppliers are developing products that can help manufacturers create products with a craft feel.
Last year, for instance, Duas Rodas added an aromatic herbal extract that contains a blend of star anise, balsamic and clove, among others, that answers the growing demand for botanical ingredients and drinks with a more nuanced, bitter taste profile. The supplier said it could be used in RTD cocktails, bitters or liqueurs.