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Brazil Bottles a Good Idea
Américas / January-February 1997

By Larry Luxner

PIRASSUNUNGA, Brazil -- Few liquor-industry executives know this, but the Western Hemisphere's best-selling spirit isn't Jack Daniels, or Johnnie Walker, or even Bacardi. It's Brazil's Pirassununga 51 -- a potent cachaça liquor distilled from fermented sugar-cane juice and sold throughout this vast nation of 160 million people, from corner markets in São Paulo and Rio de Janeiro to the farthest fringes of the Amazon.

Known widely as a drink of the middle and lower classes, cachaça (pronounced ca-CHA-sah) has been around ever since 1543. That's the year Erasmus Scheltz, a Swiss immigrant, developed the fermenting process at one of Brazil's first sugar-cane mills near the port of Santos. Today, a one-liter bottle of cachaça retails for $2 or less, putting the liquor within reach of even the poorest Brazilians.

According to Rio tour guide Wagner Medeiros, cachaça represents one of the three pillars of Brazilian society, along with soccer and carnaval. And the beverage figures prominently in John Updike's 1995 best-selling novel, "Brazil" -- the story of a forbidden romance between a street-smart black favela boy and a spoiled white girl from one of Rio's wealthiest families.

Peter Carl Armstrong is sales/export director at Indústrias Müller de Bebidas Ltda., the family business that owns 99.968% of Pirassununga. The Canadian-born executive says Brazil's total cachaça market comes to 654 million liters worth $745 million, with Pirassununga enjoying a 33.1% share of that market. The next most-popular cachaça is Velho Barreiro, followed by Pitu, Oncinha, Da Roça and some 600 lesser cachaça brands.

"This industry is extremely competitive. Our price margin in Brazil is extremely small," said Armstrong. "The export market allows us to have a slightly higher margin, though on a much smaller volume."

Indústrias Müller, established in 1959, has seen its sales skyrocket from $145 million in 1993 to $201 million last year, with a single brand -- Pirassununga 51 -- generating 88% of the company's total revenues. A second brand, Pirassununga 29, gets distributed in a few interior states and accounts for 2% of company sales, while third-party products bring in the remaining 10% of revenues. At last count, the company had 1,048 employees and served 2,744 distributors, wholesalers and supermarkets.

Müller's sprawling operations are centered in the town of Pirassununga, some 235 kilometers north of São Paulo, along the main highway that crosses the Tropic of Capricorn and links dozens of cities in the interior of São Paulo state.

The Pirassununga distillery sits in the middle of a 4,000-hectare sugar-cane field dotted with tall ipê amarelo trees, their distinctive yellow flowers visible from miles away. The company-owned field, known as Fazenda Lageado, generates 350,000 tons of sugar cane a year and supplies 25% of Indústrias Müller's raw material; the remainder comes from about 100 other suppliers.

"The plant operates from May to November. The rest of the year it's closed for maintenance," said Armstrong, donning a hardhat as he made his way through the labyrinth of pipes, vats and stainless-steel tanks that employ 100 workers in three shifts. "Our plant is entirely self-sufficient, using bagasse energy to run the plant. Bagasse is the residue left over after all the sugar is extracted. We even sell excess bagasse to the state electric utility."

From there, the fermented cachaca is transported to the bottling plant in downtown Pirassununga (population 60,000), which churns out 36,000 bottles an hour of Pirassu-nunga 51 -- so named, according to a company official, because Barrel No. 51 happened to produce the best-tasting cachaça. The drink is a main ingredient in caipirinhas, a powerful lime-and-sugar drink popular throughout Brazil. Cachaça is similar to Colombian aguardiente -- which is flavored with anise -- though Armstrong says cachaça's alcoholic content is slightly higher (43-proof for domestic brands, 40-proof for export).

Armstrong, who has lived off and on in Brazil since the age of three, is a former broadcast editor and correspondent for Canadian Press. He joined Brahma -- Brazil's largest brewery -- in 1972, spending 17 years at that company's Rio de Janeiro headquar-ters before joining Indústrias Müller.

Pirassununga 51's slogan, repeated on countless park benches and street signs from Brasília to Belem, is "Uma Boa Ideia" (A Good Idea). Apparently, many Brazilians agree. "In spite of the period of recession in the Brazilian economy from 1988 to 1993, tight monetary controls, and other economic measures by the government which seriously impaired the average consumer's purchasing power, our company managed to recover production and sales volume to surpass the record levels achieved in 1989," says a recent company press release.

Armstrong claims that until recently, Pirassununga 51 was the world's top spirits brand in terms of volume sales, thanks to Brazil's huge domestic market. That No. 1 position, however, has recently been taken over by a distilled South Korean spirit made from sweet potatoes, rice and sorghum.

Exports still constitute less than 1% of Pirassununga's total revenues, and the liquor is relatively unknown in the United States. Even so, following the adoption of new packaging materials in 1990, the company began exporting "Cachaça 51" to markets such as Japan, Italy, Spain, Portugal and Belgium. Other promising markets include nearby Latin nations including Argentina, Bolivia and Chile. Says Armstrong: "Brazilian cachaça is starting to be recognized as a category, just like Peruvian pisco or Mexican tequila."

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