Brazil is currently emerging from three turbulent years following a series of political scandals and one of the largest recessions in its history. During this period, unemployment reached historically high levels and income declined, causing a reversal in the upward consumption trend. In particular, Brazilian households cut back on consumption—both essential goods and discretionary spending—and migrated to cheaper alternatives and bulk purchases.
Anticipating changes in Brazilian purchasing behavior is crucial for the future of fast-moving consumer goods (FMCG) manufacturers, food service companies, and retailers: industries of great importance to the Brazilian economy. Gaining a deep understanding of consumer preferences and priorities is therefore essential for the industry to adjust its strategy to the changing environment in order to identify and capitalize on new opportunities.
Consumer behavior, as well as the plans of individual players in these three industries, should differ in an expanding and declining economy, making it increasingly difficult for companies to agree on a future strategy. Our scenario-based analysis maps opportunities and challenges for these different economic outcomes and proposes a variety of tactics that companies should use to capitalize on the opportunities that each possible future offers.
The report “What lies ahead for Brazil? The future of the FMCG, retail, and foodservice industries” provides a detailed analysis of how consumer behavior and spending would change under these different economic outcomes and forecasts how different macroeconomic fundamentals—GDP growth, unemployment, exchange rates, national debt, and trade balances—will impact retailers, FMCG categories, and foodservice companies.Scope
- In the downside and baseline scenarios, consumers will downtrade and choose to indulge only on special occasions. Consumers will be characterized by cautious optimism and will prefer to socialize at home rather than go out. In contrast, renewed optimism in the upside scenario means that Brazilians will be willing to pay a higher price for better quality products and will be more inclined to eat and drink out.
- In the downside and baseline scenarios, the undeniable winners will be personal care and quick-service restaurants, with dairy products showing strong performance. However, in the upside scenario, full-service restaurants and cafes will experience the highest growth within foodservice, with alcoholic beverages and soft drinks growing similarly faster in retail.
- A significant opportunity lies in e-commerce, so digital strategies should be a priority across all scenarios. Additionally, by helping consumers during an economic downturn, companies will reap long-term loyalty benefits, and therefore efforts should be made to tailor marketing and offerings to different cohorts and regions.
To read the full report, visit: www.reportlinker.com/p05257663