A confident reply from the king of cachaça, and why not? This is a company that has sat on top of the cachaça tree for so long it barely looks down. But with the category marginally contracting in Brazil (3% down in 2011 and a similar story expected once the 2012 figures are released) and added competition it’s conceivable 51’s sales will, over time, recede. Gomes offers his views: “I believe the new Ypióca-Diageo will likely end up eating up some market share from 51 and the competition that will ensue will likely cannibalise to extinction other smaller, less efficient players with less operational efficiency than Cia Muller – 51. Again, this will trigger an industry consolidation and, at some point, we will only have very large Brazilian cachaça makers and cool niche brands, but nothing in between.”

International markets

A 1% share is not very much. Unless of course the 1% is of 100 million cases, in which case cachaça’s international sales are well worth a mention.

Leading the way is Germany, where cachaça, for reasons unknown, sells around 400,000 cases. Heading the market is Pitú, through its European rights owner, bottler and distributor, Underberg, which is based in Switzerland. 

For Pitú, the strategy in Europe is about building a brand, not a category. Latin bars, Brazilian carnivals and events are targeted for promotions where Caipirinhas, often dispensed by Pitú-branded Caipirinha machines, are called Piturinhas. “It depends on how advanced the market is but some consumers do not know what cachaça is so we do not talk about it,” says Andrea Baumgartner, international marketing director at Underberg. “We try not to sell the category but the brand. They just need to know what to buy and what to buy it for.”

Maybe not by numbers, but of all the international markets the US holds the most hope. Cachaça brands certainly think so, anyway. “One day at a Chicago fair and nearby liquor store I counted 28 cachaça brands,” says Velho Barreiro’s Cremasco. “In Europe it’s just 51, Pitú, Velho Barreiro, Sagatiba and Ypicoa. In South America and North America people are keen for new brands but in Europe they prefer traditional products. New cachaças go straight into the US market.” 

Promotional support

The brand’s own North American sales were 10.5% up last year, thanks in part, says Cremasco, to promotional support from the government. “Apex-Brasil promotes Brazilian products for export.  We have a stand at events such as Indycar racing, where we can offer guests Caipirinhas,” he says. 

Brands such as Bossa and Leblon have certainly backed the US market, hoping when the worm turns, perhaps from tequila to cachaça, they are on hand with relevant super-premium products. For these brands, in a large, lonely market, the recognition and classification of cachaça was an important development. 

Indeed, for Leblon, the ruling – which also sees bourbon and Tennessee whiskies protected in Brazil – is the happy ending to its campaign, Legalise Cachaça. “We’re very happy that cachaça is finally being recognised as a distinct spirit from Brazil, and can now be properly presented to consumers as cachaça,” says founder of Leblon, Steve Luttmann.

“Cachaça is deeply rooted in the culture of Brazil, just like rum is deeply rooted in the culture of the Caribbean. Cachaça was initially created in Brazil around 1530, and rum approximately 100 years later in the Caribbean. They both have great cultures and expressions of taste – it’s silly to call them the same thing. This is only the beginning, and as the leaders of the cachaça category in the US, we plan on embarking on an aggressive campaign through the 2014 World Cup and the 2016 Rio Olympics to ‘take Americans to Brazil – one Caipirinha at a time’.”

And so to Bossa’s Gomes: “Major brand houses will now understand that cachaça is missing in their portfolio and that will better the prospects that innovative brands such as Bossa will find a major partner. Moreover, it is easier to discuss a product when you can call it by its original name, reinforcing its exotic appeal and mystique. Having said that, no brands will ever be created by a legal decree, as only investment and the commitment of time can produce the big winners of this nascent international category of cachaça.”

In light of this new US ruling, the usual tired and unanswerable questions are bound to rear their heads again. Will the Caipirinha be the next Mojito? Can cachaça become the new tequila? The truth is, beyond conjecture, nobody knows. Perhaps a better question is: Now American consumers know what Cachaça is called, will they actually be able to pronounce it? You have to be careful what you wish for.