Consumption in Argentina shrinks 3%
Consumption reduced by 4% in the second quarter of the 2017 vs. 2016 representing a 3% decrease in the year to date according to the quarterly Consumer Insights analysis conducted by Kantar Worldpanel.
“Mass consumption continues on a downward trend; however, we see some positive signs of recovery: most first brands are showing a slowdown in price and wholesaler increases, which could help to bring back some dynamism to retailers”, explained Federico Filipponi, Commercial Director at Kantar Worldpanel.
In 60% of the categories showing a reduction in purchase volume, the reason is a loss of customers. According to Filipponi, “FMCG companies must focus on winning customers. The key ways that brands can do this are: by being in more categories, having a greater presence, or targeting different demographics, more moments of consumption and new needs.”
The dairy sector is consistently the most affected, having now shrunk for five quarters. In most categories there has been a reduction in purchase volume: butter, infant milk, cheese by the pound, refrigerated puddings, yoghurts and fermented milk products in particular.
The beverages sector on the other hand has returned to growth after seven negative quarters due to the recovery of beers and because carbonated soft drinks have stabilized. In the case of second brands and white brands, both categories account for 60% of the total sector revenue.
Personal care is now stable as hair care, toilet soap and mouth care have stopped declining. It is the only sector where first brands manage to grow.
Hints at a potential recovery?
Most of the 10 brands that have gained more households this quarter compared to 2016 are first brands that have managed to do so based on a lower relative price within the category they are playing in. “This clearly shows a shopper that is super sensitive to prices. Brands that understand this trend are winning,” explained Filipponi.
The increase of the mean basket price for FMCG products has now slowed down. Following the collective bargaining negotiations this should mean groceries represent a better relative proportion of overall salary. This in turn could lead to a mass consumption pick-up in the future.
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