Cachaça: Nowhere to go but out

There’s a great myth that every Brazilian believes about the great, globally known basketball player Oscar Schmidt. Schmidt was drafted in 1984 by the New Jersey Nets in the sixth round. The myth goes that at the time Schmidt believed that playing for the Brazilian national team was more important than playing in the NBA and turned down the opportunity.

The problem is that Schmidt went to training camp with the Nets. He tried out. And the Nets offered him a contract. Schmidt turned it down. And turned down every other opportunity to play in the NBA, even after NBA players were allowed into the Olympics. Schmidt, of course, played professionally in Europe and Brazil, where he earned considerably more money.

Now, I’m not here saying that Schmidt wasn’t a great player. He was, at the very least, a great shooter. But, besides him saying so, there isn’t a lot of evidence that he turned down the first, or subsequent offers, because he wanted to play for Brazil.

The following is from an article from the Baltimore Sun, where Bob Ryan interviewed Oscar during the Barcelona Olympics, where he played against the Dream Team and lost by 44 points (keep in mind, he never won a single Olympic medal):

The New Jersey Nets offered him a contract, but Oscar rejected it. "They offered me $100,000," he explains. "The minimum was $65,000. It was only for one year. It did not show the proper respect."

So, the man himself says that it was about him not getting respect dollar-wise. My point isn’t to get to into the weeds of this particular story. Merely that sometimes, Brazilians, just like Americans, believe popular myths that aren’t based in reality.

Everyone knows, or should know, if they’ve read this blog, that cachaça is one of the most popular spirits in the world. Only soju and vodka are consumed in a greater quantity. Yet, the fact remains that less than one percent of all cachaça is sold outside of the country. So, an incredible proportion of that production is consumed right here in the old B-R-A-S-I-L.

Again, I want you to think about it: cachaça is the third most consumed spirit in the world with practically no global presence. Now, I’ve been here telling you how cachaça is much maligned in this country, echoing a sentiment that is, like many myths, reflective of what a group of people say, and not of the data. For that, I apologize.

A factoid I’ve heard recently, spoken occasionally by cachaça pundits, is that cachaça has 87 percent of the distilled spirits market. Now, this number may seem slightly crazy until you look at the paragraph above, a reminder that cachaça is the third most consumed spirit in the world with almost zero market outside of Brazil.

I needed to be sure, however. So, I asked friend of the blog Dirley Fernandes whether the statistic is accurate. It is NOT accurate. Dirley, citing a Euromonitor report, which I’ve seen cited elsewhere, stated that in 2018, cachaça only had 72 percent of the market and that the percentage would drop to 70 percent by 2023.

To put this in perspective, compared to the US market, according to the most recent study I have data for, the most consumed distilled spirit is vodka, with 35 percent of the market. Because it’s neutral, it’s great for putting in nearly any drink, and while there are certainly differences in quality, most consumers probably aren’t able to spot them. Our own native distilled spirits, the various American whiskeys, are mixed up with the rest of the whiskies around 25 percent.

In other words, cachaça has a stranglehold on the Brazilian market not seen in most diverse nations. Even if it’s not at an 87 percent market-share, 72 percent is still high.

There really is nowhere for cachaça to go but out. If it’s going to grow, it cannot stay here in Brazil. No matter how many courses cachaça schools offer, no matter how many appreciation clubs there are, Brazilians can’t consume enough cachaça to prevent other distilled spirits from entering the market.

While the majority of that cachaça is industrially produced, I’d offer that artisanal cachaça is actually doing quite well as a whole. Indeed, this is a strong focus of cachaça aficionados. And, it certainly would be great if smaller producers overtook the industrial guys. But this is a bit of a different conversation, an internal fight that has as much to do with investment as it does with any other effort.

So, even as cachaça advocates conduct campaigns concerning the appreciation of cachaça, the sales figures show that it is already well appreciated. As the Brazilian Real remains weak, domestic offerings, which provide the most bang for the buck, will remain the top choice for Brazilian consumers.