The Latin American Drinks Market: Raising a Glass to the Post-Pandemic World

December 2020

The Coronavirus (COVID-19) pandemic has radically transformed the economic and consumer landscape of Latin America. For the drinks industry, the closure of the on-trade and measures encouraging more at-home consumption have resulted in the collapse of high-margin categories such as draft beer and fountain soda as well as impulse and small format items. This report will explore the lasting effects of the channel disruption in the region, the new routes to consumers and strategies for growth in im

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Delivery

This report comes in PPT.

Key findings

Neither soft drinks nor alcohol have fully benefited from the boom in meal delivery apps

Foodservice delivery apps are still a new phenomenon in Latin America, and the average ticket price increased in 2020 in large part due to family orders. If takeaway and delivery are permanently larger post-crisis, beverages need to find ways to get their products into these orders. This might include hyperlocal RTD cocktails, meal bundles or discounted food and beverage combo items.

Returnability as a price- sensitive (and sustainable) approach

Latin America’s traditional retailing outpaced various channels within modern grocery in 2020. Neighbourhood small grocery retailers such as almacenes and bodegas saw increased sales due to reduced mobility and high local presence, as well as social factors encouraging consumption aimed at small business owners. Returnable glass bottles of carbonates (eg Coca-Cola) are popular via these channels and growth surged as a result.

Various aspects of consumer behaviour will be permanently altered as consumers spend more time at home

Less time in the office and on the street will permanently impact impulse and on-the-go formats, with stores reliant on heavy foot traffic set to be hit hardest. Producers should focus on new, higher-margin pack types and multipack options, and explore how e-commerce and last-mile players can help them reach consumers at home.

Immune support after COVID-19

Increasingly price-sensitive consumers are an opportunity for innovations in popular value- seeking formats, with powder concentrates being one of them. The category is highly prevalent in Latin America, and the immune support trend means that fortifications with vitamins C and D would be popular.

The e-commerce boom and digital reliance will impact marketing and sales

More precise digital marketing via social media and gaming will become increasingly key to a brand’s strategy. A brand’s ethical behaviours will also be increasingly part of the strategy. The whole world is online now - are you?

Scope
Key findings
The region’s economies are expected to shrink more than 8% on average
Extensive lockdowns and curfews in Latin America shutter the on-trade
Less time in the office and on the street impacts high-margin formats
#Stayathome and the future of e-commerce
“Are you sure you don’t want to add a drink to your order?”
What delivery apps get wrong
Alcohol delivery: playing catch-up with hyperlocal RTDs
Once highly-trafficked stores (and bars) go dark
Video games can be a virtual marketing platform for drinks
A hangover from social media?
From high-energy discotecas to afternoon spritz
Who needs ABV anyway? At-home an opportunity for non/low-alcohol
Returnability as a price-sensitive approach
“ Top of mind”: what works for the whole family?
An opportunity for innovations in popular value-seeking formats
Revenge shopping and indulgence as a means of premiumisation

Soft Drinks

This is the aggregation of the following categories; Carbonates, Fruit/vegetable juice, Bottled water, Functional drinks, Concentrates, RTD tea, RTD coffee and Asian speciality drinks.

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