The negative economic scenario in the country, with a severe reduction in households’ available income, brings a new movement to the packaging market in Brazil, according to the latest industry update by Euromonitor International.
The packaging market’s performance in the country remained stable between 2015 and 2016, reaching 164 billion units in the last year, considering sales of packaged foods, beverages, beauty and personal care and home care products. The most affected packaging types were metal and glass, which recorded retractions of 1.4% and 0.8%, respectively, affected in particular by the drop in sales of beer and carbonates. On the other side, carton packaging was the only type to present a positive performance, with a 2% increase in unit volume in 2016. Euromonitor International forecasts growth of 1.2% for total packaging unit volume in 2017.
A retraction in fast moving consumer goods, however, does not mean a negative impact in the packaging market. The economic recession and consequent changes in Brazilians’ purchasing and consumption patterns have been leveraging a polarisation movement when it comes to packaging sizes. With consumers’ restrained budgets, they had to reduce their consumption of those products perceived as non-essential, like chocolate and juice. As an alternative, they started to look for smaller packaging sizes, with an immediate lower disbursement. Although proportional unit prices for smaller packs might be higher, it is a way to retain consumers in a certain category, instead of letting them leave because they are unable to afford to purchase bigger sizes.
For other types of products which are consumed more frequently or in larger quantities, like home care items, for example, the solution relies on more economical versions, such as bigger packaging sizes.
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