Latin America's growing taste for whisky
With Latin American markets becoming more stable, consumers south of the border are raising a dram.
Scotland's whisky industry has long placed its bets on Asian countries as drivers of future growth, but as Latin Americans' taste for global luxury increases, distillers are hedging their bets.
Scotch whisky exports to Central and South America increased by 44 percent in January to October 2011, compared to the same period in 2010, according to data available from the Scotch Whisky Association.
Brazil and Venezuela are the region's top two markets.
Scotch whisky exports to Brazil increased by 53 percent to $134 million in that same period last year, and by 50 percent to Venezuela, to $112 million. That made Brazil the 9th, and Venezuela the 12th largest markets worldwide.
"Scotch whisky has experienced exciting growth in Latin America for a number of years, driven by the same sort of factors that have helped increase exports to Asia," David Williamson, SWA spokesman, wrote in an email.
"In other words, companies have been investing in building their brands, whilst economic growth is creating new increasingly affluent and aspiring consumers who want to buy premium, imported products."
The Brazilian market has grown so drastically that Diageo, maker of Johnnie Walker and Buchanan's, has developed advertising customized to the Brazilian lifestyle.
"Johnnie Walker creative has long been global and coming from London. It's fairly Anglo. Now we're seeing brilliant creative ideas and programs and advertising coming out in different parts of Latin America," said Stuart Kirby, head of communications for Diageo Latin America and the Caribbean. "No longer are the days of imported-to-Brazil. It's all created by Brazilians for Brazilians."
Pernod Ricard, makers of Chivas and Ballantine's, has designed integrated campaigns to appeal to a younger legal-drinking-age demographic — a growing market in the region.
For young people, social media plays a major role in brand marketing. In Brazil, Ballantine's partnered with electronic music superstar Tiesto for a program that involved a DJ contest and online voting. The winner opened for Tiesto at a giant concert.
Ballantine's Facebook page gained 140,000 new fans after the event, according to Geoffroy Germano, vice president of marketing for Pernod Ricard Americas.
"In the U.S., the Scotch whisky category has the image of being well-established and traditional for mature markets," Germano said. "That's not the case in Latin America. It's an exciting, aspirational, energetic category."
Philippe Giraude, CEO of Actium, the company that distributes Whyte & Mackay, makers of the eponymous brand, says Brazil, Mexico, Venezuela, Ecuador and Peru are his focus markets. In addition to staff trainings and consumer tastings, White & Mackay sponsors a Formula 1 racecar.
"It's a powerful sport in Latin America, so we can use that in terms of communication," he said.
Citizens in nations like Brazil, Mexico and Venezuela have long been devoted to indigenous spirits, such as Cachaca, tequila and rum. But the interest in the Scottish export has actually been a constant for decades.
Kirby of Diageo said some of the first foreign drinks brands established in Latin America were Scotch whiskies, and their presence there has endured despite many countries' turbulent periods.
"Latin America is more resilient than other parts of the world," Kirby said. "And one of the constants Latins enjoyed over the last 60 years is a stable commodity in form of Scotch."
The growth of the industry in the region doesn't look to be slowing down any time soon. Williamson of SWA points out that trade barriers and tariffs are being eliminated or reduced. The European Union and the smaller markets of Colombia and Peru negotiated a free-trade agreement that's about to go through its ratification process.
"Once implemented, a number of longstanding issues will be addressed. The 15 percent tariff on Scotch whisky will be gradually removed and other issues, such as tax discrimination in favor of local aguadiente, tackled," he wrote in an email.
"This will help create a more level playing field for Scotch whisky and open up new opportunities which should bode well for the future."
This article originally appeared on GlobalPost.