Consumer Insights Latam: Find the pockets of growth
The FMCG market in Latin America has seen a number of major changes in the past 18 months. The brand landscape, channel landscape and economic climate have all shifted, and this has had an impact on FMCG volumes.
The pace of volume growth in the region continues slow: during the year ending March 2018 consumption grew 0.8%, compared with 1.7% across 2017 as a whole. Take Q1 2018 on its own, however, and the picture is startling – volume has grown just 0.5%, the slowest rate for the region in the last ten years. This decline is a long-term trend. FMCG volume sales are rising at a fifth of the rate they were in 2016 (2.6%), and stand in stark contrast to the 8% increase we witnessed in 2009.
Most shoppers in Latin America are buying fewer items than they were this time last year. Consumption is growing in only three markets, Brazil (4%), Bolivia (2.3%) and Central America (0.7%), and shrinking in all the rest. FMCG volume sales in Venezuela are at their lowest level ever, dropping 24% in Q1 of 2018 alone.
We maintain our view that FMCG growth will not exceed 2% this year. However, retailers and brands are still finding opportunities. There are pockets of growth in private label, secondary cities, and certain retail formats, and the situation will not be bad news for those that can find and take advantage of them.
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