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With around 13.3 million unemployed Brazilians in August 2017, according to IBGE (the National Statistics Institute), more than ever consumers are acting with caution, cutting out expenses perceived to be non-essential. Even those that are currently employed act as if they were not, fearing the economic instability in the country. As a consequence of this scenario, in which Brazilians start to rethink their purchasing habits, one of the most affected markets is consumer foodservice, registering a retraction of around 4% in the number of transactions between 2011 and 2016, with cafés/bars being the most adversely impacted.
However, this does not mean consumers are willing to give up socialising with friends and family. According to the Global Consumer Survey 2017, conducted by Euromonitor International with final consumers, 47% of Brazilians consider spending more time with friends and family to be an important factor contributing to their happiness. The solution they found was to bring these social moments into their homes, benefiting retail value sales, which registered growth of 39% between 2011 and 2016.
A good indicator of this “at home consumption” trend is the packaging volume sales through retail versus foodservice. Considering the most affected foodservice channel was cafés/bars, let us take as an example beverage packaging. While in consumer foodservice there was an absolute retraction of 600 million units (approximately 2%) between 2011 and 2016, in retail channels there has been an absolute increase of 5.7 billion units (around 14%), over the same period.
It is a mistake, however, to consider that, while at home, consumers are only looking for simpler and cheaper products. Whilst they may be willing to swap bars for their homes, they expect to be “rewarded” with a similar experience – in terms of convenience and product quality – to what they would have at a restaurant. So, brands with clear positioning and that use innovative packaging are ahead of this trend. For example, it is very common for Brazilians to have snacks alongside beers at bars. However, to reproduce this experience at home, certain household items would be required, like plates or cutlery. A solution from Grupo Benassi was to launch a single package containing five different peanut types, already separated by flavour, in a plastic tray which is ready to serve, eliminating the need for plates or bowls.
Another example of the strengthening home consumption trend is found in premium beverage sales. It was common for Brazilians to consume beverages in cafeterias during pre-crisis times (the volume of transactions in this channel increased at a CAGR of 3% between 2004 and 2014), and this is one activity that consumers have cut back on to save money. In order not to give up this social activity completely, Brazilians attempt to recreate the café experience at home. With this in mind, in 2017, the company Leão Júnior SA added a premium hot tea line called Leão Senses, to its portfolio. It not only has unique flavour blends, but also comes in a silk tea bag, with an average unit price that is up to four times higher than its traditional line. Even though it has higher price positioning than the traditional version, each tea bag costs around BRL2, it is still much cheaper than an ordinary cup of tea in a bar or café.
Other than coming up with an innovative product, it is possible to create new consumption experiences, even for products which already enjoy high penetration rates, as is the case for standard fresh ground coffee. Traditionally the preferred option among Brazilians, “homemade coffee” can be re-thought in terms of packaging and offer high-added value and a differentiated experience. The specialty coffee producer Comércio de Café Santa Monica recently launched a product line which offers its standard fresh ground coffee in an individual filter, targeting those consumers that do not want to give up homemade coffee, and who also want a superior and practical version for a single serving preparation – attributes generally associated with coffee pods.
These examples show that it is not necessary to reinvent a product, and that we can take advantage of new packaging designs to guarantee consumers affected by the economic crisis a superior and/or similar experience to that which they would have at a foodservice establishment.
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