Growth or gloom for your brands?
What it takes to win today:
the power of presence
Before the pandemic, the most effective way for an FMCG brand to grow was with a combination of increased penetration and frequency. Today, boosting penetration – the number of shoppers who buy the brand – has become practically the only growth driver that matters, particularly as loyalty dwindles.
Globally, of the brands that grew their CRPs in 2022, 88% grew through penetration; in Latam, the figure was 93%.
The proportion of brands that grew through higher penetration alone has risen from 35% in 2020-2021 to 52% the previous year. Penetration and frequency are a growth catalyst for 41% of brands, compared with 52%, while the proportion that grew by increasing frequency stands at just 7%, down from 14%.
The average penetration growth of brands in the Latam region is higher than in 2021, with the biggest rises achieved by medium sized brands. Of the region’s Super Brands- those with more than 70% penetration -, 23% grew their buyer base, along with 53% of large brands, 59% of medium sized brands, and 49% of small brands. This trend is reflected across all categories.
The star performers in Latam this year are a mix of global and regional/ local brands. The crown for fastest growth in penetration belongs to Downy, which attracted the most new shoppers, 12 million, followed by Pepsi, which added more than 9.5 million buyers in 2022.
Small is beautiful
Small brands – which make up 50% of the brands in the region – achieved the strongest penetration growth in all baskets except for health and beauty.
This year, smaller brands prevail over the ‘big hitters’ – with 71% of the ranking’s growing brands small and medium-sized, growing their importance in 0.6 pp versus 2021.
Of the smaller brands in the ranking, 50% have grown their CRPs, and 50% declined. For larger brands, the proportion sits at 40% and 60% respectively. Small and medium brands make up 71% of the brands in the Latam market, while only 8% are Super Brands.
Regional/ local brands - those that are in at least two countries of one continent, or in one country; respectively – contribute 62% of the total CRPs in the ranking. They benefit from their proximity to their shoppers, which gives them the ability to be agile, and remain highly responsive to needs and behaviours.
If we consider penetration gains in the region, looking beyond the Top 50 brands enables us to identify the smaller ‘up-and-coming’ players that are on the rise.
It is well worth investing in a strategy to increase penetration – a gain of just 1% can be worth millions of dollars.
