Cachaças try to gain market share in South Korea – 03/26/2023 – Mpme

Waiters hired by the Brazilian embassy in South Korea surrounded the room at the Four Seasons hotel in Seoul with 80 bottles of wine and sparkling wine. At the same time, in a corner of the room, a group of Brazilian businessmen offered shots of two cachaças produced in Minas Gerais: Lótus, made from bananas, made by cachaçaria Sagrada, and B Spirits, a mixed drink based on the distillate.

The event, in September last year, celebrated the bicentennial of Brazil’s Independence and brought together about 300 guests. Among them, major Korean importers, representatives of Samsung, LG and Hyundai and authorities from the Asian country, including a deputy minister.

“That part of the hall was packed the whole time”, recalls the Brazilian ambassador to South Korea, Márcia Donner Abreu.

The party was the starting point for the export of both drinks to South Korea. In the following days, the embassy coordinated meetings between businessmen and importers and, by December, the two companies had already signed contracts to export 10,000 bottles to the Asian nation —mostly from B Spirits.

The batches shipped to the country earlier this month and will initially be sold in liquor stores — local distributors did not reveal the price of the 750 ml bottles, but in comparison, one of the same size as cachaça 51 costs around R$ 125 in the country.

In Brazil, a bottle of Lótus costs around R$50, and one of B Spirits, R$70.

“Taking into account that it usually takes at least 18 months to build a market and get the first contract signed, the companies were very successful”, says Helena Lee, partner at Latitude 3733, a company that helps export Brazilian products to South Korea.

Among the arguments used by the agent to convince producers to export to the Asian country are the possibility of brands entering the premium market more easily and the influence of South Korea in Southeast Asia, which would facilitate the export of cachaça to other countries from the mainland.

In addition, the Asian country is one of the countries that consume the most alcoholic beverages. Jinro, the main producer of soju, a typical Korean drink, is the brand that sells the most distillates in the world, according to the Drinks International magazine ranking published last year – there were 94.5 million 9-liter boxes of the drink in 2021; the second brand, gin, sold 37 million.

Antonio Marinho Junior, partner of the two companies, got to know Latitude 3733 during an event in São Paulo and, according to him, the support of the business agency was essential to conduct the procedures with the Korean distributors.

This is the first time that Sagrada cachaçaria exports its product. Last year, the company –which has 15 employees– joined Ibrac (Brazilian Cachaça Institute).

In addition, he signed up for the Cachaça: Taste the New, Taste Brasil project, which helps producers export their brands. The initiative is also supported by Apex (Brazilian Trade and Investment Promotion Agency).

Sales to Asia, however, are still far from being the producers’ priority. According to Carlos Lima, executive director of Ibrac, exporting to the Asian market requires large logistical costs, such as paying for trips to trade fairs in those countries.

It is no wonder that Asia was, last year, the destination of only 40 thousand liters of cachaça, while the United States alone —the main importer of the product— received almost 1.5 million liters, according to the Ministry of Agriculture.

The main idea of ​​cachaçaria Sagrada, by the way, was to export the product to the USA and Portugal, but the meeting with Lee made it easier for the product to reach Korea first. “Decisions in Europe are slower and go through several stages”, says Gilberto Pereira, a partner at the company.

At the same time, B Spirits, which has pilot Nelsinho Piquet as a partner, already exports to Belgium, Holland, Germany, Portugal, France and the USA.

In any case, the arrival on the Korean market left producers hopeful about the success of the product in the Asian country.

Ambassador Márcia Donner says that South Koreans are curious and very consuming.

“In addition, he has less and less interest in domestic products and more and more in imported products. So he can move from soju to wine and cachaça.”

Next month, the embassy should release a guide on how to export to the country.

Ko Young Ho, the importer who closed a deal with the two companies, says that passion fruit —one of the flavors produced by the company— is on the rise in the Korean market and that the B Spirits product “spreads the aroma around the environment just by opening the bottle “.

In addition, he points out that Lotus has a flavor reminiscent of Korean banana milk, popular in the country. “The product will conquer the public by taste and nostalgia.”

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