Read on to explore how COVID-19 has transformed the FMCG and retail landscape in Latin America.
The extraordinary events caused by the COVID-19 pandemic have had a profound impact on our daily lives – not least in the way we shop – and there’s likely to be continued disruption in buying behaviour for some time to come.
From stockpiling at the start of lockdown, to adapting eating and drinking habits for our new routines of working and socialising at home, there have been several ways in which COVID-19 has disrupted the FMCG industry.
In this unique Winning Omnichannel: Latam Focus report, as well as providing a global overview of how the COVID-19 crisis is transforming FMCG and retail dynamics, we drill down into the data for Latin America, to examine how it is affecting the retail and shopper landscape at a regional level, and help you navigate its complexities.
The data we originally collected and analysed for 2019 was suddenly irrelevant within the context of COVID-19. It quickly became apparent that we needed to prioritise what was happening in the moment for our clients. We will briefly touch on the pre-COVID-19 FMCG retail picture across the world and in the Latam region, before taking an in-depth view of the impact the pandemic has had on individual countries, channels and categories.
We call this new environment Liquid Retail—a fluid space where the lines are blurred between home delivery, ecommerce, in-home and out-of-home.
Through these insights, you will be able to adapt your strategies and find new growth opportunities in these unprecedented times — whatever the future holds.
In 2019, the Global FMCG spending grew from 2.1% to 2.4%, thanks to the recovery in the US. In this market, the rise of discounters and proliferation of ecommerce through Amazon and Walmart led to a 0.8% increase, to +2.4% annual growth. In nearly every other region we analysed, FMCG growth was slower in 2019 than the previous year. The picture in Western Europe was similar—slowing from +2.2% growth in 2017 to +1.2% in 2019. France and Italy experienced just +0.8% growth each, Germany +0.7%, and the UK +1.4%. In Asia, growth was fragmented. Indonesia (+6.3%), India (+5.3%) and China (+5%) all performed well. However, the likes of South Korea (+1.2%) and Japan (-0.9%) fell behind.
For the first time, growth in Latin America was flat—largely due to the financial crisis in Argentina, as well as poor growth in Colombia, Bolivia and Central America. The two biggest economies in the region – Brazil and Mexico – still performed well with +6.5% and +4.1% growth, respectively.
Without the impact of Argentina and Chile, consumption in the region would have risen by 1%.
E-Commerce (+204%), Wholesalers (13%) and Drugstores (12%) with 2-digit growth over 2018. (CI LATAM Q4 2019).
Slowing global population growth is the one trend that will impact every region, with FMCG growth likely to follow suite. By 2050, the global population growth will slow to just 0.5% per year, compared to 2.1% in 1969.
Where are Latam consumers shopping? Ecommerce enjoyed triple-digit growth between 2018 and 2019, with value sales soaring by 204%. This huge rise was due to the channel’s low penetration in the region.
Cash & Carry offers a value-for-money proposal that meets Latam consumers’ needs. This channel’s 13% growth in value sales was mainly driven by Brazil, where it reached more buyers, and also increased their loyalty – the percentage spent in the channel versus their total spend across the entire market.
