Food And Beverage Trends In Latin America

Food and Beverage Trends in Latin America

FI South America 2007

Euromonitor International

Executive Summary

According to market research firm Euromonitor International, growing consumer affluence and

sophistication, allied to stable economic performance, is expected to underpin Latin America’s

position as the 2nd fastest growing global region in packaged food between 2006 and 2011, with

forecast value growth of just over 22%. Demographic factors, such as the increasing proportion of

women in the labor force in Latin America and a growing middle-class in the region, are expected

to lead to rising incomes and increased demand for convenient packaged food formats.

Throughout Latin America, snack bars was the fasted growing category from 1998-2006,

presenting a constant value average growth rate (CAGR) of 25.3% in the period, followed by

Noodles, 12.8% (CAGR), Ready Meals 6.8% (CAGR), Meal Replacement Products, 5.4% (CAGR)

and Frozen Processed Food, 4.4%, (CAGR). In beverages, functional drinks and ready to drink

tea experienced tremendous growth over other soft drink categories with 96% and 190% volume

growth respectively since 2001.

As a whole, consumers throughout Latin America are demanding convenient, portable foods due

to demographic and lifestyle changes, health and nutrition’s increasing importance, increasing

disposable income, and greater availability of packaged foods and drinks. The trend towards

convenience beverages and food has also reflected an erosion of traditional eating habits, with

more formal mealtimes giving way to the habit of “snacking” or “grazing”, where food is consumed

“on-the-run” at convenient moments.

The Global Packaged Food Market by Region

0

100,000

200,000

300,000

400,000

500,000

600,000

Asia Pacific Australasia Eastern Europe Latin America Africa and

Middle East

North America Western

Europe

2006Value US$ millions

0

1

2

3

4

5

6

7

8

01-06 CAGR

Brazil

Brazil accounted for 35% of regional packaged food value sales in 2006, up from 33% in 2000.

Sales in 2006 were led by bakery products, savory snacks, and chocolate confectionary. In value

terms, the most dynamic packaged food sector over the review period was snack bars, as well as

gum, slimming products, instant soup and pasta. Fruit and vegetable juice led growth in drinks

with 94.1% volume growth since 2001. Snack food continues to attract Brazilian consumers by

offering value-added health and wellness characteristics. Similarly, dried processed food is being

boosted by the increased presence of premium dried ready meals, such as risottos and dried pasta

meals, targeting single-person households and households with working mothers. Additionally,

dessert mix sales were boosted by new flavours and increased promotional activities in the

summer. Pasta’s value growth is primarily being boosted by rising flour prices and increased

investments in higher value dried pasta, such as hard grain pasta.

Fortified/functional and high fiber products led sales of health and wellness packaged food in 2006.

Sales of fortified/functional products come from bakery snack bars and dairy products, together

representing 73.5% of total value sales. Dairy products’ sales, meanwhile, are being supported by

flavoured powdered milk products and probiotic yoghurt that improve intestinal functionality. Dairy

products and confectionery also account for the bulk of better-for-you sales, due to the strength of

reduced fat milk, cheese and yoghurt, and reduced calorie and sugar free types of gum.

Functional gum is also growing strongly and steadily in constant value since entering the market in

2001.

A number of demographic factors continue to affect packaged food consumption habits in Brazil.

The most significant of these are the prevalence of single-person households, a rise in female

participation in the workforce, lower birth rates and higher life expectancy rates. These trends are

anticipated to support future growth.

Mexico

The US$ 47.1 billion packaged food industry in Mexico reported modest growth in value over the

inflation rate due to the expansion of noodles, snack bars and ready meals. These areas showed

great dynamism due to their convenience in easy preparation and newer versions with added

flavours and ingredients.

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