The story of 2020 is really a tale of three separate phases of consumer behaviour
Between March and April, shoppers started stockpiling, with bigger purchases and fewer visits.
For the next few months, until July, social distancing was the priority and consumer shopping focused on the most urgent items, with purchase frequency rising as basket size fell.
For the rest of the year, consumers started to adapt to the new situation and restrictions started to ease. Spending remained stable at high levels, but the frequency of visits remained low, albeit with a recovery for Christmas.
As lockdowns ease and OOH consumption returns, knowing the full 360° view will be the only way to understand how your brand is truly performing. This ranking presents only in-home consumption, but our full capability to analyse the in-and-out view paints a much more accurate image for snack and beverages brands. Reach us to know the Top 10 Most Chosen Out-Of-Home Non-Alcoholic Beverages Brands 2020.
Rankings available for Brazil, Chinese Mainland, France, GB, Indonesia, Mexico, Portugal, Spain, Thailand.
Online doubled its growth rate in 2020, attracting an additional 67 million households to the channel. Curious about The Brands Most Chosen Online in 2020 in Latam? For the first time, food and beverages were impacted by online purchases.
Explore online rankings talking to us.
Rankings available for Argentina, Brazil, Chinese Mainland, France, GB, Ireland, Malaysia, Portugal, South Korea, Spain, Taiwan, Thailand, Vietnam.
COVID-19 impacted each and every industry differently
The pandemic reversed a decline in in-home consumption. Its success was the result of the transfer of out-of-home consumption occasions to in-home moments. Categories that were most relevant for daily life did best.
Overall, food and dairy brands did well but beverage struggled. Personal Care brands did not have their best year if we consider the "vanity" categories. Thinking about health and the need to keep one’s hands clean against COVID-19, the Top Risers include some hand soap brands developing in 2020.
New habits were established, including a preference for making large purchases under one roof in channels such as wholesalers and the modern trade, the adoption of proximity channels and a major boom in ecommerce. Even when restrictions were lifted at the end of the year, these habits were retained.
Across the region, the average number of FMCG trips made by households fell in seven of nine countries, with a median drop of 8%. That is 1.6 billion fewer shopping trips, although the spending per trip increased 11.9%.
Big brands did best
The pandemic boost was biggest for larger brands; those with penetration greater than 30% grew CRPs by 40%, compared to a growth of just 21% for small brands (those with 1-10% penetration). However, this improvement may be temporary. More than half of the value growth seen by brands came from attracting new shoppers, often those with additional economic power thanks to governmental aid, remittances and other economic support. This helped low-income consumers to buy essentials to their families in difficult moments, but it is likely the economic aid will reduce in 2021 so the impact may not be permanent.
This is the opposite of the overall global pattern, where small brands did best, growing CRPs by 46% compared to 20% for big brands.
The record growth in consumer goods in 2020 will not repeat
In 2021, the rising unemployment, inflation and a drop in economic aid will reduce the overall growth rate. At the end of 2020, growth was still high in most countries, although it was falling in countries with high levels of unemployment, such as Argentina, Chile and Brazil. The risk in these countries is that spending will drop among lower socioeconomic groups as the large-scale government intervention drops to the lowest levels seen in the likes of Colombia, Bolivia, Peru, and Ecuador.
Growth remains strong in Mexico and Central America thanks to remittances from citizens working abroad, while Bolivia, Ecuador and Peru are currently benefitting from an economic bounce-back after harsh lockdowns.
Global or regional brands?
When we looked at global numbers, we see how relevant global brands became during the pandemic. Yet, when we look by region, we see that there are very different stories. In Latin America, local brands are still the ones consumers spend the most on (59.6%)– a trait that has remained stable for the past two years. Is the second region in global brands’ shares, following the US. This demonstrates the great opportunity the region represents for global FMCG brands.
Also, two thirds of the region's CRPs were generated by two countries, Brazil and Mexico, and last year Mexico added more to the brands in the ranking than ever.
Outlook for 2021: Lower growth and higher rationalisation
For the 75% of FMCG brands listed in the Top 50, 50% or more of the growth contributions came from lower-income consumers with government-boosted purchasing power. We are now seeing a slowdown in the growth of this demographic group as they move to cheaper brands. The degree to which any given brand or category will be affected depends on how essential it is, as measured by its purchase frequency, and on how dependent it was on purchases from lower-income consumers in 2020.
Categories that have lower purchase frequency are at high risk as they have become a less essential part of consumer routines. Categories that are at medium risk are part of consumer’s daily lives, but could see economic pressure forcing lower-income groups to rationalise spending by trading down, switching to smaller packages, focusing on promotions, etc.
