Market context

And how it’s shaping trends
in consumer behaviour

Latin America’s economy flew in 2024. It outperformed the IMF’s advanced economies average with GDP growth of 2.3% compared to 1.4% for competitors.

This success has been driven by a number of factors, notably higher commodity prices (13% of regional GDP), greater foreign investment and lower unemployment (6.7% in 2023 vs. 8% in 2019).

But it’s not all rosy, particularly when it comes to FMCG. Food price inflation is significant and at 14% is well ahead of market average inflation of 7%.

In Latam inflation has been an economic constant, and most recently a mix of external factors such as rising commodity prices and internal factors such as currency depreciation against the US dollar have accelerated its rise.

That’s played out especially for food and is having a serious impact on consumer purchase power. The outlook was much worse during the inflationary peaks of 2022, but in 2024 most countries still had inflation above their pre-pandemic average.

On the one hand, rising inflation drives up overall spend (there’s been a 14.1% boost to spending in the region compared to a global rise of 8%) and spend per trip is up 12.4%.

However, with GDP per capita growing by just 1.6% in 2024, many households have had to cut back and reduce basket size to adapt. Thus, while the headline number of $928 annual spend (up 12.8%) seems positive, the detail reveals the number of brand choices in decline.

The market-by-market picture

Latin America is not a uniform picture. The northern countries are still on the rise. Colombia, Central America, Peru, Ecuador, and Mexico show positive growth.

These countries have experienced a mix of higher minimum wage increases in the past years – in Mexico, for example, the government has increased it by 20% – and an expansion of more “affordable” retail channels, which allow consumers to bring home a higher volume of goods for fewer dollars when compared to other channels.

The picture for Argentina, Brazil, Chile, and Bolivia, however, is of year-on-year declines, although it’s worth remembering that Brazil had a strong growth peak in 2023.

Variation between markets also extends to the retail landscape. Discounters particularly thrive on private labels in countries such as Ecuador, Colombia, Mexico, and Central America. In all of these markets, private label has increased the number of units sold by more than 10% in the past year.

By contrast, in southern markets such as Brazil, Argentina, and Chile, wholesalers provide affordable access to commercial brands, due to their strong value-for-money proposition. In these markets, wholesalers have gained more share than any other channel.

Future economic outlook is also uncertain. Between January and April 2025, forecasts for Latin America’s GDP was cut due to sharper-than-expected downturns in Mexico and Brazil, driven by US tariffs, global trade and financial uncertainty, as well as weaker external demand.

In Mexico and Central America, a key element of GDP is linked not only to exports but also significantly influenced by remittances and the wider uncertainty in the global economy will also have an impact on consumer wallets.

When observing brand choices, it’s also worth noting that consumers do not always behave in a uniform or seemingly economically rational manner. Struggling households in Colombia, for example, still spend more than 20% of their FMCG budget on premium items, balanced out by the fact that 27% of their spend goes on private label.

Premium spend in these households is targeted at Personal Care (make-up, fragrances and skincare), while private label wins out in food and especially home care, nearly doubling its relevance compared to premium brands.

Such dynamics can be seen in all kinds of households as consumers try to manage their budgets at a time of rising prices and lead to the mid-tier brands being squeezed out.

The winning brands

This year we tracked 52 billion brand choices across 15 markets in Latam. That sounds like a big number but it’s actually a 3.4% decline year on year.

Collectively that’s 1.9 billion fewer brand choices. So while the average consumer still makes at least two brand choices a day and the average number of brands bought is increasing, each brand gets less loyalty and fewer repeat purchases.

The overall picture is of more fragmented purchases across a wider range of channels in 2024, with the number of channels up 5% and frequency down 1%.

Most brands can comfort themselves that inflation means they are growing value sales, but half are being chosen fewer times. Lower frequency means fewer opportunities to be bought and many are suffering on that metric.

Overall, more categories are being bought (90% of categories gained penetration) and more channels are being visited. Such experimentation reduces the loyalty consumers have towards each individual brand because purchase patterns shift much more and change between occasions – as a result just 39% of Brands in Latam manage to gain CRPs.

Smaller is better

The winners and losers are not evenly spaced out by brand size. Of the Latam brands that have grown this year, two-thirds (66%) are of medium and large size, with penetration ranging between 10% and 70%, driving an average CRP increase of 2.5%.

Medium-size brands – those with 10-30% penetration – did best with 41% of the 5,846 brands covered by Worldpanel growing and 59% in decline. Penetration was key for medium-sized brands with 48% of growth coming from wider availability alone.

Small brands – those with up to 10% penetration – were also a success with 39% growing. They did particularly well in Dairy and Beauty and Personal Care, accounting for more than a third of growing brands (34% and 35% respectively).

Naturally, it’s easier to grow from a small base and 37% of this growth came from penetration improvements alone but 24% was also due to frequency rises.

The scenario is more challenging for the region’s super brands – those with penetration above 70% – where only 34% have increased their CRPs this year. The No. 1 brand Coca-Cola, for example, saw a decline of 4.7% in overall CRPs and was chosen 100m fewer times than in 2023.

In fact, most of the top 5 most chosen brands saw CRP’s decline: In addition to Coca-Cola, Pepsi saw a 4.9% decline, with dairy brand Lala (down 5.2%) and food brand Bimbo (down 5.9%) also hit. In the Top 5 only Colgate saw an increase, with a 0.1% rise in CRPs for the region’s No. 2 Brand.

Type your content here…

Brand vs Channel

The first step on the consumption journey is deciding where to buy your FMCG needs but brand preferences also play a part in that decision.

Across Latam we see consistent omnichannel behaviour – with nine channels being used per household on average each year – but the appeal of value-for-money channels is rising. While there are fewer brand choices at a total market level, channels such as wholesalers and discounters provided brands with more than 400m new moments of truth in the past year.

Wherever consumers chose to shop, however, there is still some loyalty. In Mexico and Brazil, for example, the probability that a visit to a given channel will be followed by another is 65% and 69% respectively. The wider range of brand choices, particularly in modern retail,

At the same time however, when we compare purchase decisions from shop to shop, we see the same top brands and household names in most of them. Top brands are as relevant as channels when it comes to building repetition. In Brazil and Mexico, for example, top brand repeat rates are 85.6% and 94.0% respectively.

means it’s easy to adapt your basket to changing budgets without being forced to visit another channel.

Nevertheless, shoppers are visiting more channels than ever before as they actively search for better options to offset price increases.