TRADE-BRAZIL: Cachaca Ready to Challenge Tequila and Rum

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Apr 1 2002 (IPS) - Cachaça, an alcoholic beverage made by distilling sugarcane, is abandoning its humble, centuries-old origins, and has become the target of a programme to boost Brazilian exports.

“Caipirinha”, a cocktail that mixes lemon, sugar, ice and cachaça, and which advertising links to images of parties, fun and “the tropical lifestyle”, is the initiative’s weapon for launching the beverage on the world’s major markets.

All drinks “are a matter of fashion, and now it is caipirinha’s turn,” says María José Miranda, national manager of the Brazilian Cachaça Development Programme (PBDAC).

Cachaça will compete on the global market of alcoholic beverages, primarily with rum, tequila and vodka, which are also often consumed mixed with other beverages or ingredients, Miranda said.

The campaign has taken Mexico as a reference, as that country “in the last 10 to 15 years” turned tequila into a major export product, taking advantage of the positive reception of the “margarita”, a cocktail in which tequila is the main ingredient, she added.

This is the “decade of cachaça”, which will succeed other distilled products that have been consolidated on the international market, says the magazine Impact International. Another U.S. publication, In Style, pegged caipirinha as “the hottest drink” of the new century.

Cachaça exports are currently relatively modest. In 2001, the total was 11.1 million litres, providing revenues of nine million dollars. That is just a drop in the bucket compared to the hundreds of millions of litres consumed within Brazil.

The goal is to boost the export volume by 10 percent this year and accelerate expansion over the next few years, to reach 40 million litres exported annually by 2010. For now, the big cachaça market is Europe, and Germany in particular, which absorbs nearly 25 percent of the total overseas sales.

Distribution is the main obstacle, says María das Vitorias Cavalcanti, president of the PBDAC Deliberative Council. The Brazilians, she said, do not have a distribution company like UDV, which brings “José Cuervo” tequila, “Johnny Walker” whisky and “Smirnoff” vodka, among other brands, to the entire world.

Cachaça is produced by some large companies and by approximately 30,000 micro-producers scattered throughout Brazil, though particularly in the states where sugarcane is grown. The beverage generates 400,000 direct and indirect jobs, and its market moves some 500 million dollars annually.

The Brazilian government recognised the potential sales of the national alcohol on the foreign market and included it in its official export promotion programme, with the designation of resources for the beverage’s presentation at international fairs and for publicity campaigns.

President Fernando Henrique Cardoso last year signed a decree that establishes cachaça as the official and exclusive name for sugarcane alcohol produced in Brazil, thus opening the way for industrial property rights.

This prohibits the use of the name by producers of similar beverages in other countries, such as the exporters in Colombia, Martinique and other sugarcane-growing nations that had begun to market the product, Miranda said.

The Brazilian beverage has scant penetration in the United States because it is taxed as if it were rum, another alcohol based on sugarcane. But cachaça is created by distilling boiled sugarcane, while rum comes from molasses, explained the PBDAC official.

The programme created in 1997 by the Brazilian Beverages Association, which represents the larger companies in the sector, aims to work with cachaça producers to enable them to compete abroad, and to improve product quality and its international image as uniquely Brazilian.

The initiative also seeks to build partnerships among the smaller producers so that they have the volume and resources to compete internationally.

Cachaça was born alongside Brazil as a nation, between 1530 and 1550, shortly after sugarcane was first grown in the country. A natural derivative of sugar production, it was initially given to livestock to complement their regular feed.

Later, it became a beverage consumed among African slaves brought to Brazil, and then extended to all social classes. But it has always maintained its image as “the people’s drink”, of limited consumption among the elite and rejected by the Roman Catholic Church as immoral.

Furthermore, “cachaceiro” in Brazil is synonymous to drunkard, obstinate and irresponsible.

This may explain, in part, why it has taken until now, after a gradual improvement in the quality of some brands, for cachaça finally to be discovered as a product for export.