Bottoms up in Peru: New Business Opportunities for Caribbean Exporters of Alcoholic Beverages
Peru’s culinary renaissance—a steady gastronomic rise over the past decade and a half—has garnered five-star accolades from foodies around the world. Its local cuisine is varied, enriched with indigenous Andean flavors, with strong influences of the country’s Spanish conquerors, and more recent Japanese immigrants. Whereas local drinkers have traditionally been less adventurous, there is every indication that consumers are looking to pair their food with an equally diverse selection of alcoholic beverages. Also, there are a growing number of thematic bars with new proposals for bar goers, which has led to an increase in the demand for whiskey, rum and vodka, and the emergence of new proposals for pisco. Furthermore, local alcoholic beverage consumption crosses every social class, and age range, local consumption is genuine.
Given existing demand and new trends, it is important for Caribbean exporters to understand the different segments.
National rum has a very good acceptance in the Peruvian market, as does imported whisky. In addition, as is the case in most Latin American countries, beer is the most traditional and most consumed beverage, followed by liquors and wine, in order of preference.
According to the tariff item 2208, which includes brandy, rum, whisky, gin, gin, vodka and other liquors, the main supplier is Europe, led by the United Kingdom with a 67% cumulative participation in the period 2013-2017. That said, there are a number of countries in the region that have a good standing in the local market.
Imports from Mexico represent 3.67% of total international sales of imported alcoholic beverages, with a clear upward trend in shipments for the period 2016-2017. Nicaragua has 3.56% of the market. Other countries in the region exporting to Peru include: Cuba, 2.91%; Jamaica, 2.50%; Guatemala, 2.19%; Dominican Republic, 1.26%; Costa Rica, 0.43%; Panama, 0.24%; and Trinidad and Tobago, 0.01%.
In addition, the countries with a positive rate of growth in terms of imported unit value between 2016-2017 are Nicaragua with 35%; Cuba, 24%; Guatemala, 5%; and Costa Rica, 13%. Although the market share of these countries is still small, the positive growth trend of their exports and the boom in the consumption of alcoholic beverages traditionally overlooked by their market indicates an opportunity for more new players from the region.
There is undoubtedly a timely opportunity for alcoholic beverage manufacturers in the Caribbean to join other exporters from the region. In line with the culinary boom, which is showing no signs of slowing down, there are several indicators that Peru’s demand for new alcoholic beverages is on an upward trend, especially considering local consumption is genuine and consumers are looking for new alternatives of products and forms of consumption.
Regarding access conditions, the Peruvian market imposes an Ad Valorem import tariff of 6%, a Selective Consumption Tax of 20%; a General Sales Tax of 16% and the Municipal Promotion Tax of 2%.
Usually, importers handle the import process. They also handle distribution, becoming actively involved in promotion activities and brand positioning if they also have the representation. This last stage is of utmost importance since the value perceived by the Peruvian customer to pay or not for a new product, or at least try it, is critical.
It is always important to work closely with the importer on all promotional activities, contributing graphic material, discounts for large purchases, prizes for big sales, special launch prices, or financial resources to advertise locally. Positioning a completely unknown new product in a new market requires a considerable investment in the market launch stage.
An alternative is to identify importers of alcoholic beverages located in Peru. A one-stop destination is the international fair ExpoAlimentaria http://www.expoalimentariaperu.com/ held every year in Lima. This is the country’s most important industry event, bringing together the industry’s different stakeholders: food, drinks, machinery, equipment, supplies, packaging, services, and restaurants. The dates for 2019 are: September 25-27.
At MasterCardBiz we recommend that exporters interested in developing a new market for their product plan their initial trips within the framework of an international event. In this case, Expo Alimentaria is a good alternative for Caribbean exporters planning to travel to Peru. And, as a Mastercard Business Card cardholder, you can request a custom business agenda for free.