Virginia Garavaglia: “Growth needs realistic targets”
In this edition of Perspectives, Virginia Garavaglia, Marketing Director for Latin America, looks at what brands need to do for growth.
When considering how brands grow in the region, she cited a global study which looked at 18,000 brands and concluded that the ways brands grow in Latam are exactly the same as in other regions.
“In order to grow, a brand must win more shoppers.”
Across Latin America, FMCG is growing slowly with only 1% volume growth year on year. However, with an average penetration of only 33%, every brand has room for growth and can win more shoppers:
“We are in a zero sum game in most markets, growing brands are doing so at the expense of declining brands.”
When looking at how many shoppers were needed in order to be successful, Virginia Garavaglia takes Brazil as an example, where the market is growing at 3%. Of the brands that are growing, we are seeing a rate of 12% year on year. Among growing brands three quarters were able to win new shoppers.
“In Brazil if your brand increases penetration by 0.8% or more in a year, it means you are within the winning brands. There are 54 million households in Brazil so that means a brand has to win 430,000 households every year to remain successful.”
But it’s not possible to measure all brands in the same way, different growth targets need to be set for small and large brands to determine their success:
“Small successful brands win 270,000 households in a year, while big brands need to win 800,000 shoppers.”
And she adds that last year only 20 brands within Brazil won two million households or more and these are the ones that grew the most in sales. Oral-B, Frisco, Suave, Brilhante and 3 Corações are just some of them. Virginia Garavaglia concludes:
“Growth is possible if you set realistic targets and identify the hot spots of growth in your market.”
Watch the full interview by clicking on the video above.
If you are interested in knowing more or want to discover how we can help make your brand more successful, leave our expert a message through the button on the right.
If you prefer, click here to watch the video in Spanish.