Diageo gets the taste for a cocktail with Brazilian spirit
Tuesday 29 May 2012
Diageo has taken a further gulp of the growing cocktail sector by buying the spirit used to make the Brazilian drink caipirinha.
With the cocktail scene growing globally, the drinks group is making a £300m bet on the growing thirst for caipirinhas.
It is buying Ypioca, Brazil's leading brand of premium cachaca. Cachaca, a spirit made from sugar cane and also referred to as Brazilian rum, makes up 80 per cent of the spirits market in the South American country. It is what vodka is to Russia or what wine is to France.
Diageo, which is making a play for the Americas in terms of emerging market growth, wants access to the growing middle classes of Brazil who drink Ypioca.
Ypioca is strongest in northern Brazil allowing Diageo, which is more dominant in the south, to take the brand national. Diageo will also use the brand's strength in the north to sell its other spirits and grow market share.
UBS analyst Melissa Earlam said: "We view this style of bolt-on emerging market deal positively, offering local premium brand leadership as well as distribution synergies over the mid-term for Diageo's international spirits. It follows on from Diageo's acquisition of Mey Icki in Turkey and ShuiJingFang in China."
Caipirinha is the national cocktail of Brazil – the country drinks 86 million, nine-litre cases of cachaça each year.
Ypioca has a 62 per cent share of the premium market and an 8 per cent share of the cachaça market with sales of £60m.
Paul Walsh, Diageo's chief executive, said: "Brazil is an attractive, fast-growing market for Diageo with favourable demographics and increasing disposable incomes."
Undertaker dead hoax: WWE legend not 'found dead in home' as Facebook and Twitter reports
South Korea ferry: Four dead and almost 300 missing as mass rescue gets underway
Malaysia Airlines MH370 co-pilot's phone 'was on and made contact with network tower' 30 minutes after plane turned around
Oscar Pistorius trial: Reeva Steenkamp told athlete she 'loved him' for first time in Valentine's Day card
Lunar eclipse 2014: Images of the spectacular 'blood moon'
David Cameron: 'Jesus invented the Big Society – I'm just continuing God's work'
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage on Have I Got News For You: Ukip leader ridiculed over expenses and party 'fruitcakes'
- 1 Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 2 Naked yoga: the bare truth - it's already big in the US, and has now landed here
- 3 Man on a leash in Farringdon, London: Mystery of 'walkies' solved
- 4 24 people applied for the 'world's toughest job', here are their interviews
- 5 Drugs giant GlaxoSmithKline bribed doctors to boost sales, says whistleblower
iJobs Money & Business
£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...
£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...
£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...