Bag-in-box market in Brazil

The prolonged quarantine drew attention to bag-in-box packaging. Practical and accessible, they are a way to facilitate the consumption of wine, especially on a daily basis, with the drink always available and at the temperature of consumption in the refrigerator. They are also a packaging used for whites and reds in glass, in restaurants.

In March, when the Covid-19 restrictions began, the market for bag-in-box wines, including imports and sales from national wineries, was 36.2 thousand liters. In April, it jumped to 151.2 thousand liters, indicating a greater acceptance of the product. But it fell to 84,700 liters in May. On this scale, it returned to record highs in the following two months, closing at 232.7 thousand liters in July.

Last year, the bag-in-box category, formed by the commercialization of Brazilian fine wines and imports, totaled 1.5 million liters. This amount represents 1.1% of the total of fine wines sold in Brazil.

In the first seven months of 2020, the category grew by 1% over the same period last year, from 737.5 thousand liters in 2019 to 743.3 thousand liters in 2020. In this period, the import of wines in bag -in-box fell 10%, from 417.2 thousand liters in 2019 to 377 thousand liters in 2020. In nationals, the increase was 14%, from 320.3 thousand liters in the period from January to July 2019 to 366.3 thousand liters in the same period of 2020.

A more consolidated category in other markets, such as Chile and the United Kingdom, in Brazil the bag-in-box is closely linked to price. The low value that the Brazilian consumer accepts to pay for wines in these packages often makes important international market players give up on selling wines to Brazil in this kind of packaging.  They are relevant brands in the world industry, that study the Brazilian bag-in-box market and end up not exporting these wines to Brazil due to its low acceptance. Or, in some cases, they export their simpler lines to compete in this low-value market.

In 2019, imported bag-in-boxes accounted for 59% of the total in this category, while nationals accounted for 41%. With the pandemic, the participation of imported and national products has been varying from month to month.

In March, imported products had 89% of the market, against 11% for nationals; in May, this percentage was almost reversed, with the nationals with 80% of the market and the imported ones, with 20%. In July, the last available month, imported products returned to lead, with 60% of the total and Brazilians took 40%.

From January to July, Brazilian bag-in-boxes totaled 366,400 liters, which is equivalent to 49% of the market. Of the imported labels, Portugal leads, with 311.1 thousand liters in this period, which represents 42% of the market. Portugal, still, was the only country that registered an increase in imports, with 6% more products in this period than those brought between January and July last year. Chile is in second place in the ranking of imports, but with a significant drop. There were 34.8 thousand liters in this period, equivalent to 5% of market share, with a reduction of 56%. The ranking continues with Argentina (with 2% of the market), Italy (1%) and Uruguay (1%), with decreases of 26%, 48% and 59%, respectively, in the first seven months of the year compared to the same period 2019.

The bag-in-box is imported in packages of 3 and 5 liters, which have almost equivalent stakes. In these first seven months of 2020, the bag-in-box of 3 liters had 46.7% of the market, while the 5 liters had 53.3%. The package of 3 liters represented 139,206 liters, a decrease of 7.6% compared to 2019. In the 5 liters, the volume was 237,775 liters, with a decrease of 10.8%.

In terms of value, the package of 3 liters represented US$ 228,979.6 FOB, down 15.1% compared to the same period last year. In packages of 5 liters, the amount totaled US$ 261,403 liters FOB, with a small increase of 0.6%.

The main brand of 3 liters imported by Brazil is Espiritu de Chile, which with 21.6 thousand liters, represents 18.5% of the total. In dollar, it is US$ 42.3 thousand FOB, a 46.6% decrease in relation to the same period last year. Last year, Espiritu de Chile was also a leader, but with 29.4% of the market.

Second in the ranking from January to July 2020, is Chaparro, which started to be imported this year, and has a 17.1% share. 25,920 liters were brought in, equivalent to US$ 39,046. Third, is Pinta Negra, with 11.1% of the market and an increase of 124.7% in volume and 117.8% in value compared to the same period in 2019. With 10.6% of the market, it is Aldeias das Serras and, with 9.5% Santa Ana Bag.

In this ranking, a highlight is Viña Geisse, who has the greatest reference with the winemaker Mario Geisse. The brand is entering the Brazilian market and already occupies the sixth position. It has a 7.1% share, with 5.8 thousand liters and US$ 16.2 thousand FOB. Among the ten most imported brands, it is also the one with the highest value in the dollar per liter ratio: US$ 2.8.

In the packages of 5 liters, Olaria and Pinta Negra have almost 50% of the market. The first, with 24.2%, equivalent to 51.8 thousand liters or US$ 63.3 thousand FOB, represents an increase of 33.3% in volume and US$ 31.5% in value. The second, with 23.9% of this market, represents 48.6 thousand liters or US$ 62.4 thousand FOB, with retraction, respectively of 0.1% (in volume) and 1.6% (value). The value of each liter is US$ 1.2 (for pottery) and US$ 1.3 (Pinta Negra).

Importing wine companies lead the purchase of bag-in-boxes, with 66% of the market. Supermarkets are in second place, with 32%, and e-commerce companies, with 2%. From January to July, importers increased their volume by 12.8% and the value by 31.6%. On average, they bring a bag-in-box worth US$ 1.2 a liter. Supermarkets retracted, down 43.1% in value and 44.5% in volume, with wines priced at US$ 1.5 per liter. And e-commerce companies have entered this segment now.

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