A Brazilian Spirit Aims for Global Market
São Paulo—The makers of Brazil's most famous liquor are reveling in their greatest chance for introducing their sugar-cane-based booze to new audience.
Now comes the tricky part: pronunciation.
Hundreds of thousands of World Cup and soon, Olympics, tourists are expected to sample cachaça (kah-SHAH-sah), the high-octane ingredient in the country's national cocktail, the caipirinha (kigh-puh-REEN-ya). The mixed drink is traditionally made with mulled lime, sugar, ice and cachaça, which is distilled from sugar juice pressed directly from cane.
Brazil's cachaça makers are aiming promotions at thirsty World Cup fans, betting they'll take some home and start asking for it in their local liquor stores.
Cia. Müller de Bebidas, the world's biggest producer of cachaça, upped its marketing budget and redesigned packaging to appeal to foreigners. The industry's trade group, the Brazilian Cachaça Institute (IBRAC) is organizing tastings for business groups attending the tournament.
"It's the beginning of the process" of boosting awareness, said Ricardo Gonçalves, chief executive of Müller de Bibidas.
But sugar and citrus can't mask one of the industry's biggest challenges: a lot of cachaça produced in Brazil is lousy.
Cachaça distillers are making a push for U.S. sales. Pictured, a selection of the liquors at a bar in São Paulo. Jeffrey Lewis/The Wall Street Journal
Most of the country's estimated 12,000 producers are small fry producing rotgut that can sell for less than $2 a bottle. Also known as pinga, the liquor has spawned the pejorative pinguçu, which means a down-and-dirty drunkard.
To improve cachaça's profile, some of Brazil's producers are moving upscale with premium versions worth sipping, much like fine single-malt whiskies or top-of-the-line tequilas. Müller de Bebidas's premium Reserva 51 brand, for example, sells for about $80 a bottle. Sales of the label have jumped, rising 52% in 2014 through May from a year earlier, though from a low starting point, said Mr. Gonçalves, who declined to be more specific.
The industry is taking inspiration from Mexico, where distillers managed to transform tequila from a salt-shot-lemon buzz into a respected liquor that sells for upward of hundreds of dollars a bottle.
Mexico's Tequila Regulatory Council plays an important role in promoting the drink by helping guarantee quality standards and making sure only tequila produced in certain regions carries the name. The result: Mexico's tequila exports hit 172 million liters last year, up from 64.6 million liters in 1995, a year after the council was founded.
Vicente Bastos, president of IBRAC, said distillers and the Brazilian government are working to establish their own council by early 2015.
"They're our model," Mr. Bastos said of tequila makers. The Mexicans "have been very good at making sure producers stick to quality levels. That's very important."
Official cachaça production numbers are hard to come by because there are so many unregistered distillers. IBRAC estimates total sales in Brazil at about 800 million liters a year.
Exports are still a drop in the shot glass. Germany is currently the biggest foreign buyer, purchasing 2.7 million of the 9.2 million liters of pinga sold abroad in 2013, said the IBRAC.
Brazilian distillers really want to crack the U.S. market, where only about 704,000 liters were sold last year.
"The U.S. is the place we want to be. It's the time for us to sell there," Mr. Bastos said. "Cachaça is very associated with Brazilian culture."
Part of that effort is helping pinga stand out in a crowded spirits market.Once sold in the U.S. as Brazilian rum, which is easy to pronounce but confusing to consumers since rum is usually distilled from molasses, cachaça caught a break in 2012. The U.S. agreed to recognize cachaça as an exclusively Brazilian product, meaning no distiller located outside Brazil can use the name.
"To the extent that it's recognized as a unique product from Brazil, that provides momentum," said Spiros Malandrakis, senior alcoholic drinks analyst for London-based Euromonitor International Ltd. "Caiprinhas are quite popular, but in many cases rum is used instead of cachaça."
At home, high-end distillers who have been encouraging Brazil's growing middle class to drink better quality versions say they are making headway.
Reinaldo Annicchino, a maker of artisanal pinga in rural São Paulo state, said he is planning to triple production from his current 15,000 liters a year. His Cachaça do Rei brand retails for about $20 a bottle.
"We're starting to see bigger groups of people, in Brazil and other countries, appreciate the good stuff," said Mr. Annicchino, a burly former sugar-cane farmer whose company employs eight people.
Big companies, too, say premium sales are growing. Italy's Gruppo Campari,CPR.MI -0.86% which bought the Sagatiba brand in 2011, says the brand's revenue has increased every year, though it declined to provide exact figures. The brand's advertising is aimed at a young, hip crowd and touts the quality of the product.
Global drinks giant Diageo, DGE.LN +0.79% which also owns the Johnnie Walker scotch whisky, Smirnoff vodka and Tanqueray gin is getting in on the act, too.
In 2012 it bought a Brazilian distiller named Ypióca Group and put actor John Travolta in ads to boost the brand's image. The company said its marketing muscle and the integration of Ypióca into Diageo's Brazilian distribution network helped boost its cachaça sales by 31% in the first half of 2014.
Now distillers just have to hope for a lot of World Cup visitors like Andy Skuse, 49, a Londoner visiting Brazil. "I tried caipirinhas for the first time here at the Cup," he said while watching a game with friends in a São Paulo bar. "I'm a real cocktail fan, and I'll definitely buy some cachaça back at home to make drinks."