Politics, Business & Culture in the Americas

Brooklyn Brewery Taps Into Brazil’s Craft Beer Market

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Brazil’s annual Carnaval had a new entrant this year: Brooklyn Brewery.

Days before the February festivities, Brooklyn Lager was the best-selling beer amid a selection of Brazilian and international craft beers at B33R CLUB in the southern capital of Curitiba. In one day, the specialty shop sold three boxes (72 bottles) of Brooklyn Lager to Brazilians stocking up for Carnaval—three times the store’s average monthly sales of the brew.

“It’s more and more popular; you can find Brooklyn Beer everywhere now,” said Marcio Mathias, the 31-year-old owner of B33R CLUB. “And Brazilians think everything imported is better than local products.”

Brooklyn Brewery has taken notice, and is increasing its presence in Latin America’s most populous nation. Since first entering Brazil in 2011, selling about 25,000 liters a month, sales have multiplied 12 times to an average of 300,000 liters a month last year, according to export manager Claire Moyle. She expects to see another 30 percent jump in sales this year, making Brooklyn Brewery one of the larger craft brewers in all Brazil.

“Brazil kind of surprised us with our success down there,” Moyle said in a telephone interview from the company’s Brooklyn headquarters. “This is real volume with a lot of potential.”

The success of Brooklyn Brewery highlights the growth of Brazil’s craft beer market and the opportunity for niche multinational companies,  even at a time of economic hardship. Brazil is expected to fall into recession this year amid austerity measures and financial fallout from a corruption investigation into state-run oil company Petrobras. Many small Brazilian brewers have said they’re selling less of their specialty suds, and some are now also finding it more difficult to secure subsidized government loans. Still others, such as Belem-based Amazon Brewery, the first microbrewery in Amazon, are looking for growth outside Brazil by starting to export to the United States and Europe (as I wrote about for AQ’s Winter 2015 issue).

Brooklyn Brewery is unique in that it’s big enough to have ample investment backing, but still small enough to tap into the “craft beer” craze—while also enjoying the premium label that Brazilians give to U.S.-made goods. The company’s size also allows it to produce on a more efficient economy of scale than super-small breweries, making it cheaper than most Brazilian craft beers and something of an affordable backup option for Brazilian beer-lovers. At $4-$7 per 12-ounce bottle, Brooklyn Lager is about half the price of many Brazilian-made craft brews, which are made with heavily taxed imported ingredients, such as hops and malt, which are not produced in Brazil.

Larger commercial brewers in Brazil, such as Ambev—a unit of Anheuser-Busch InBev, which puts out the popular brands Skol and Brahma—have taken note of Brazilians’ taste for craft beer and are now trying to increase sales of premium beers, according to equity analyst Catarina Gervai Pedrosa of BES Securities do Brasil S.A. “Craft beers are increasing their presence,” she said, “but it is still a very small business.”

Brooklyn Brewery is focused on more affluent urban centers in the south—particularly Rio de Janeiro, São Paulo, and Curitiba, where the Brooklyn Brewery logo can be seen hanging outside numerous restaurants and bars that sell the beer on draft and in bottle. Brazil is already the company’s largest export market in Latin America and the fifth-largest consumer of Brooklyn Beer worldwide (Sweden is first, followed by the UK, Norway, and France).

“Brazilians get very passionate about things, and craft beer is now that thing,” said Moyle, the export manager. “Craft beer is an affordable luxury. People feel like they’re treating themselves.”

Brooklyn Brewery has also been challenged in Brazil by Brazil’s complicated tax system and arduous customs restrictions. For example, only in Brazil must the brewer have all shipping invoices signed by the Brooklyn Chamber of Commerce and rushed by mail to Brazil’s customs office before a shipment can be offloaded at the entry port. Taxes also add about 300 percent to the beer’s sales price, according to Moyle.

Brooklyn Brewery is not the sole American craft beer making inroads in Brazil—there are also bottles from Sixpoint Brewery, Stone Brewing Co, Black Diamond Brewing Co, and Lost Coast Brewery at B33R Club in Curitiba. But Brazilians seem have a special affinity for things associated with Brooklyn, which is also the name of a trendy Curitiba cafe chain. Even at Brooklyn Brewery’s flagship beer-making plant in New York City, every one in five visitors is Brazilian.

“We have 3,500 visitors to our tasting room every weekend, and 20 percent are Brazilian,” says Moyle. “We’ve actually started to talk about how we need to put signs up in Portuguese.”

Tags: Beer, Brazilian Economy, Brooklyn Brewery
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