Hot Drinks in Chile

Euromonitor International's Hot Drinks in Chile market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

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• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Coffee; Other hot drinks; Tea

Executive summary

Premiumisation drives coffee and tea sales up

The emergence of a coffee culture has influenced the introduction of an ever wider range of premium products in response to increasingly sophisticated consumers. In demanding better quality products, Chileans have expanded their coffee consumption occasions, making coffee drinking a social event. A similar phenomenon has started to emerge in tea; a product that has further benefitted from the global health and wellness trend to which Chile is not immune.

Inflation erodes Chileans’ budgets and slows down sales growth rhythm

The inflation rate rocketed in 2008, reaching levels that exceed by far the rates observed over the last decade, which translated in a dramatic decline of families’ disposable income. The effects of inflation have slowly increased the prices of utilities, credit instalments and many services which prices are indexed to inflation, which has reinforced the negative impact on Chileans’ budgets. Thus families have started to be more cautious about their expenditure and reassign their budgets to more essential items. Inflation has most affected consumers from low and lower-middle income groups who had been quick to upgrade the quality of the products they bought when they were in a financial position to do so. In lieu of the slowdown of the growth rate at the end of 2008, manufacturers increased their offer of smaller packages to help consumers maintain their per purchase expenditure.

Juan Valdez arrival increases the influence of international players

International brands lead the competition across the hot drinks sectors. Nestlé and Unilever control off-trade hot drinks sales, and also lead product developments. Additionally, international specialist coffee shops (e.g. Starbucks, CupandCino, and The Coffee Factory) have influenced the emergence of a tea and coffee culture, which is the main reason behind premiumisation. The aforementioned companies heralded what is evidently a first wave of this trend, because towards the end of the review period, other international players arrived on the market. Juan Valdez entered Chile in alliance with Falabella department stores, not only providing the latter’s cafeteria service, but also selling a wide range of its packaged coffee products, and Carozzi introduced its Bonafide chain and may well introduce its own coffee brands further down the line. International tea players have also launched their products (e.g. Akbar) targeting the upper end of the market. Overall, international firms should continue to influence the evolution of hot drinks towards being better quality products.

Consumers reveal preferences for retailers that help them to save

Because of tighter budgets, consumers have started to shop in outlets that they can afford. This environment has favoured the fast expansion of hard discounter chains, namely D&S’s Ekono and Bodega ACuenta that sell a higher share of private label products, creating a highly attractive offer that satisfies every day purchase needs. Hard discounters have expanded faster in lower and lower-middle income areas. Manufacturers have introduced smaller packages and have supported independent retailers with training and merchandising elements that allow them to increase turnover and take on the competition of large retailers. Additionally, because of the greater presence of private label products, manufacturers and importers will need to counter competition from D&S which was acquired by Wal Mart in 2008 and will be adopting some of the global giant’s strategies over the next few years.

Café boom creates more social occasions and boosts demand

Hot drinks sales should record a better performance than during the review period, despite the economic slowdown. Some hot drinks products will substitute others, such as breakfast cereals, but will mainly benefit from consumers’ interest in premium products, further adoption of healthy eating habits and the increased opportunities for consumption. Moreover, the sharp rise in the number of cafeterias should take the coffee and tea culture nationwide, and the social component of its offering should stimulate demand because it is a cheaper alternative to eating in a full-service restaurant. The ambience at the newer specialty coffee shops like Starbucks and The Coffee Factory makes them pleasant places in which to socialise, or have informal business meetings.

Table of contents

HOT DRINKS IN CHILE : MARKET INSIGHT

EXECUTIVE SUMMARY

Premiumisation drives coffee and tea sales up

Inflation erodes Chileans’ budgets and slows down sales growth rhythm

Juan Valdez arrival increases the influence of international players

Consumers reveal preferences for retailers that help them to save

Café boom creates more social occasions and boosts demand

KEY TRENDS AND DEVELOPMENTS

Economic slowdown has started to affect hot drinks sales

Young adults are quick to adopt health trend

Big retailers provide the base for further introductions of gourmet products

Starbucks-style drinks incentivise on-the-go consumption

Novelties in distribution channels

MARKET DATA

Table 1 Retail Vs Foodservice Sales of Hot Drinks: % Volume Breakdown 2003-2008

Table 2 Retail Vs Foodservice Sales of Hot Drinks: % Volume Growth 2003-2008

Table 3 Retail Sales of Hot Drinks by Sector: Volume 2003-2008

Table 4 Retail Sales of Hot Drinks by Sector: Value 2003-2008

Table 5 Retail Sales of Hot Drinks by Sector: % Volume Growth 2003-2008

Table 6 Retail Sales of Hot Drinks by Sector: % Value Growth 2003-2008

Table 7 Foodservice Sales of Hot Drinks by Sector: Volume 2003-2008

Table 8 Foodservice Sales of Hot Drinks by Sector: % Volume Growth 2003-2008

Table 9 Total Sales of Hot Drinks by Sector: Total Volume 2003-2008

Table 10 Total Sales of Hot Drinks by Sector: % Total Volume Growth 2003-2008

Table 11 Hot Drinks Company Shares by Value 2004-2008

Table 12 Hot Drinks Brand Shares by Value 2005-2008

Table 13 Sales of Hot Drinks by Distribution Format: % Analysis 2003-2008

Table 14 Sales of Hot Drinks by Sector and Distribution Format: % Analysis 2008

Table 15 Forecast Retail Vs Foodservice Sales of Hot Drinks: % Volume Breakdown 2008-2013

Table 16 Forecast Retail Vs Foodservice Sales of Hot Drinks: % Volume Growth 2008-2013

Table 17 Forecast Retail Sales of Hot Drinks by Sector: Volume 2008-2013

Table 18 Forecast Retail Sales of Hot Drinks by Sector: Value 2008-2013

Table 19 Forecast Retail Sales of Hot Drinks by Sector: % Volume Growth 2008-2013

Table 20 Forecast Retail Sales of Hot Drinks by Sector: % Value Growth 2008-2013

Table 21 Forecast Foodservice Sales of Hot Drinks by Sector: Volume 2008-2013

Table 22 Forecast Foodservice Sales of Hot Drinks by Sector: % Volume Growth 2008-2013

Table 23 Forecast Total Sales of Hot Drinks by Sector: Total Volume 2008-2013

Table 24 Forecast Total Sales of Hot Drinks by Sector: % Total Volume Growth 2008-2013

APPENDIX

Published Data Comparisons

Production/Import/Export Data

Table 25 Imports / Exports of Hot Drinks by Sector 2001-2007

DEFINITIONS

Summary 1 Research Sources

LOCAL COMPANY PROFILES - CHILE

CAMBIASO HERMANOS SAC - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 2 Cambiaso Hermanos SAC: Key Facts

Summary 3 Cambiaso Hermanos SAC: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

Summary 4 Cambiaso Hermanos SAC: Production Statistics 2007

COMPETITIVE POSITIONING

Summary 5 Cambiaso Hermanos SAC: Competitive Position 2008

COMERCIAL FH ENGEL SA - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 6 Comercial FH Engel: Key Facts

Summary 7 Comercial FH Engel: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

Summary 8 Comercial FH Engel SA: Production Statistics 2007

COMPETITIVE POSITIONING

Summary 9 Comercial FH Engel SA: Competitive Position 2008

COMERCIAL SOUTH COFFEE SA - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 10 CSC SA: Key Facts

Summary 11 CSC SA: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

Summary 12 CSC SA: Competitive Position 2008

CORPORA TRESMONTES SA - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 13 Córpora TresMontes SA: Key Facts

COMPANY BACKGROUND

PRODUCTION

Summary 14 Córpora TresMontes SA: Production Statistics 2007

COMPETITIVE POSITIONING

Summary 15 Córpora TresMontes SA: Competitive Position 2008

ICB SA - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 16 ICB SA: Key Facts

Summary 17 ICB SA: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

Summary 18 ICB SA: Competitive Position 2008

PROMOTORA CHILENA DE CAFÉ DE COLOMBIA SA - HOT DRINKS - CHILE

STRATEGIC DIRECTION

KEY FACTS

Summary 19 Procafecol Chile SA: Key Facts

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

Summary 20 Procafecol Chile SA: Competitive Position 2008

COFFEE IN CHILE

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 26 Coffee Machine Sales: 2004-2008

Table 27 Instant Coffee by Speciality Type 2004-2008

Table 28 Retail Sales of Coffee by Type: Volume 2003-2008

Table 29 Retail Sales of Coffee by Type: Value 2003-2008

Table 30 Retail Sales of Coffee by Type: % Volume Growth 2003-2008

Table 31 Retail Sales of Coffee by Type: % Value Growth 2003-2008

Table 32 Coffee Company Shares 2004-2008

Table 33 Coffee Brand Shares 2005-2008

Table 34 Forecast Retail Sales of Coffee by Type: Volume 2008-2013

Table 35 Forecast Retail Sales of Coffee by Type: Value 2008-2013

Table 36 Forecast Retail Sales of Coffee by Type: % Volume Growth 2008-2013

Table 37 Forecast Retail Sales of Coffee by Type: % Value Growth 2008-2013

TEA IN CHILE

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 38 Fruit/Herbal Tea by Type: % Off-trade Volume 2005-2008

Table 39 Other Tea by Type: % Off-trade Volume 2005-2008

Table 40 Retail Sales of Tea by Subsector: Volume 2003-2008

Table 41 Retail Sales of Tea by Subsector: Value 2003-2008

Table 42 Retail Sales of Tea by Subsector: % Volume Growth 2003-2008

Table 43 Retail Sales of Tea by Subsector: % Value Growth 2003-2008

Table 44 Tea Company Shares 2004-2008

Table 45 Tea Brand Shares 2005-2008

Table 46 Forecast Retail Sales of Tea by Subsector: Volume 2008-2013

Table 47 Forecast Retail Sales of Tea by Subsector: Value 2008-2013

Table 48 Forecast Retail Sales of Tea by Subsector: % Volume Growth 2008-2013

Table 49 Forecast Retail Sales of Tea by Subsector: % Value Growth 2008-2013

OTHER HOT DRINKS IN CHILE

HEADLINES

TRENDS

COMPETITIVE LANDSCAPE

PROSPECTS

SECTOR DATA

Table 50 Retail Sales of Other Hot Drinks by Subsector: Volume 2003-2008

Table 51 Retail Sales of Other Hot Drinks by Subsector: Value 2003-2008

Table 52 Retail Sales of Other Hot Drinks by Subsector: % Volume Growth 2003-2008

Table 53 Retail Sales of Other Hot Drinks by Subsector: % Value Growth 2003-2008

Table 54 Other Hot Drinks Company Shares 2004-2008

Table 55 Other Hot Drinks Brand Shares 2005-2008

Table 56 Forecast Retail Sales of Other Hot Drinks by Subsector: Volume 2008-2013

Table 57 Forecast Retail Sales of Other Hot Drinks by Subsector: Value 2008-2013

Table 58 Forecast Retail Sales of Other Hot Drinks by Subsector: % Volume Growth 2008-2013

Table 59 Forecast Retail Sales of Other Hot Drinks by Subsector: % Value Growth 2008-2013