Brazilian fmcg market in good shape

17 March 2009

RIO DE JANEIRO: The fmcg market in Brazil is likely to continue to grow despite the global financial crisis, but own-label brands may flourish at the expense of luxury and imported products, according to figures from Euromonitor International covering the period until 2012.

Brazil has seen strong growth in its advertising market in recent years, particularly on television, and has also seen consumer spending grow rapidly.

Marcel Motta, a research manager at Euromonitor, argues that the "sheer size" of the Brazilian market makes it attractive to brands, and means it should hold up comparatively well during the recession.

The company predicts Brazilian consumers will "cut back or postpone" discretionary purchases, but will increase their outlay on packaged foods by 8.6% annually to 2012, and will spend around 9.1% a year more on dairy products.

Categories including deodorant (up 4%), soap bars (up 4.4%) and laundry care goods (up 5%) will also all improve their overall sales in this period.

However, while food items based on "stability and consistency" are likely to maintain their "share of pocket", luxury and high-end goods may well witness a "decline in consumption."

As such, own-label products will gain ground in "non-essential" areas, such as olive oil, where consumers are likely to begin "trading down from imported and premium higher-priced items."

Data sourced from Latin Business Chronicle; additional content by WARC staff