It’s Time to Look For Growth Outside of Brazil
In the recent past, Brazil has been referred to as a growth economy alongside other fast growing economies in the world like China and India. This was an understandable perception formed by the fact that consumption in Brazil was growing at such high rate that would create entire new economies within a year. Take for example the industry of beauty and personal care products where consumption grew by an average of 13% a year between 2004 and 2014 in Brazil. In a market that currently moves USD 30 billion/year in the country, this level of annual growth added USD 2 billion a year to the global beauty industry. This is the equivalent of adding one country the size of Belgium in consumption of beauty products a year, for every year between 2004 and 2014. Packaged food consumption is another example: food consumption in Brazil added USD 4 billion a year for every year. This was the equivalent of adding one Ecuador a year to the global packaged food market. Hence, no wonder Brazil was perceived by the world as a growth market.
This scenario has changed due to the currently recession which has been dragging for the last two and half years. Looking at numbers in dollar terms, taking into account both the economic slowdown and currency depreciation, levels of consumption in most industries Euromonitor International follows are expected to return to levels of consumption of 2014 only after 2020, including both the beauty and food industries. For companies operating in Brazil this has translated in layoffs and smaller output as companies adjusted to this new economic reality.
For Brazilian companies selling exclusively into the domestic market, this is an opportunity to start looking for growth outside of the country. For most industries Euromonitor International follows, Brazil represents only 3-4% of the global market place. Selling only into Brazil is ignoring the other 95% of the market. Moreover, products that sell to specific consumer groups might find larger and fast growth specific consumer groups in other countries in Latin America or in the rest of the world. For Brazil, which has always been a slave to the lure of the fast-growing domestic market, the
current scenario makes for perfect opportunity to start looking for growth outside of the