Brazil: Diageo doubles efforts to strengthen presence in e-commerce channels
Diageo Plc, the worlds largest spirits maker, has doubled efforts to strengthen its presence in e-commerce channels in Brazil as the coronavirus pandemic triggered lockdowns, driving customers to drink at home, a company executive said on June 26.
Consumption at home has increased significantly over the past three months, but does not fully compensate revenue lost with the closure of bars, restaurants, nightclubs and events, Diageos managing director for Brazil, Paraguay and Uruguay, Gregorio Gutierrez, told Reuters in an interview.
He did not specify how much sales have fallen in the region since the outbreak started, but noted that the so-called on-trade: segment - in which alcoholic drinks are sold for consumption in licensed premises - represents between 40% and 50% of Diageos business.
As soon as these on-trade channels closed, we reallocated our resources to an online task force, Gutierrez added.
The Johnnie Walker whisky maker currently has partnerships with major retailers in Brazil, including international players such as Amazon.com and MercadoLibre, as well as the local subsidiaries of French supermarkets groups Casino Guichard Perrachon SA and Carrefour SA.
Despite efforts to boost online channels, Brazils alcoholic beverages association Abrabe estimates the coronavirus crisis reduced total sales by an average of 50%.
Brazil has become the epicentre of the coronavirus outbreak in Latin America, reaching over 1.2 million confirmed cases and almost 55,000 deaths by June 25, according to Health Ministry data.
For Gutierrez, it is still difficult to tell when Diageos operations should return to pre-COVID-19 levels even as authorities begin to lift restrictions in some locations.
In Sao Paulo, Brazils most populous city and the first to confirm a coronavirus case, bars and restaurants are allowed to reopen as of July 6.
In the meantime, the Tanqueray gin maker has been working to prepare its partners for the reopening, setting aside US$100 million to help bars and restaurants around the world.
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