According to Euromonitor, retail sales in the packaged food market in Brazil had been estimated to reach US$82.1 billion in 2020. That makes it the largest in Latin America and the 8th largest in the world. That also represents
a growth rate of 23.9% or US$15.8 billion since 2016. The forecast for growth in this market is also quite promising. By the year 2025, the retail sales in the packaged food market in Brazil is expected to reach US$117.5 billion, a growth
rate of 32.5%, or US$28.8 billion. High growth rates in the forecast included:
- Pet Food
- Ready Meals
- Sauces Dressings & Condiments
- Processed Fruit & Vegetables
- Baked Goods
- Rice, Noodles & Pasta
- Processed Meat & Seafood
- Cheese
Euromonitor reports that Brazilian supermarkets registered positive sales growth during 2020 despite the pressure that came on consumer spending over the course of the year due to the COVID-19 pandemic. Supporting positive growth in the channel
was the essential status of supermarkets, which ensured that all outlets in the channel were allowed to remain open throughout the year, even during the quarantine lockdown period. The lockdown performed a key aspect of the official response to the
COVID-19 situation and saw severe limitations placed on the ability of retailers in channel designated as non-essential to operate. Furthermore, with on-trade service banned across Brazil’s entire hospitality industry during the quarantine
lockdown, consumption of food and drink shifted to the off-trade, further benefiting supermarkets and other grocery retailer’s channels that were allowed to remain open.
However, some pressure did come on supermarkets during the year as the dramatic shift towards food and drink e-commerce that flowed from the COVID-19 situation robbed the channel of significant sales. The increased preference for e-commerce as a
source of groceries was tied to the efforts of consumers to comply with social distancing measures, with some of the leading players in supermarkets resorting to deep price discounts in an effort to attract consumers and maintain levels of consumer
foot traffic in their stores.
As the COVID-19 situation unfolded in Brazil during the second quarter of the year, many of the country’s supermarkets adopted special measures in their stores to protect their staff and customers by reducing the risk of exposure to the COVID-19
virus. Furthermore, some of the leading supermarket chains in certain parts of the country also designated specific hours of the day for serving only customers from at-risk groups, specifically elderly people. This was often first thing in the
morning, offering the elderly the opportunity to go shopping without fear that they could contract a potentially serious dose of COVID-19.
One of the main factors spurring strong sales in supermarkets over the course of 2020 was the surge seen in sales in the channel during the initial phase of the quarantine lockdown. This was due to the widespread stockpiling that was seen among
consumers living in major urban areas. Among the products most commonly sought out by consumers interested in stocking up were products that were generally regarded as fairly essential, including notably hand sanitizers, toilet paper, nappies/diapers,
home disinfectants and soft drinks, specifically carbonates and juice.
With some consumers hoarding huge volumes of such products, the shelves of many supermarkets were left empty for much of the time during the days following the announcement of the quarantine lockdown. However, this stockpiling was a merely ephemeral
phenomenon and thus did not cause any major disruptions to the operations of retail chains or their suppliers for an extended period of time.
Post advised U.S. suppliers and other stakeholders that when launching new-to-market products, Brazilian buyers are hesitant to purchase full containers of single products while, on the other hand, U.S. suppliers are often unwilling to deal with small
volumes. Oftentimes exporters are cautious to do business with a single supermarket chain as their perception of reaching consumers through a single source does not seem attractive. Post advises this perception does not always correspond
to the reality. It is a matter of strategy, as retailers may achieve significant market penetration.
Best Product Prospects:
Post reports that Brazilian importers are generally looking for well-known brands and high-end products. They usually prefer products with one year shelf-life or more. In addition to the product itself, packaging, status and level of innovation
are important attributes. Products that combine these characteristics are more likely to successfully enter the market. The food categories that are most frequently exported to Brazil from the United States are: dairy products, fresh fruit,
processed fruit, processed vegetables, fruit and vegetable juices, tree nuts, chocolate and cocoa products, snack foods, breakfast cereals, condiments and sauces, prepared food, wine, beer, distilled spirits, non-alcoholic beverages (ex. juices) and
fish products. Other food categories that are getting more supermarket shelf space are products for special diets, such as lactose and gluten free products.
