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Key Factors Shaping Food Consumption in Latin America

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Latin America is expected to finish 2023 with GDP growth of 1.7% and an inflation rate of 15.1%. The packaged food industry in the region is expected to finish with double-digit sales growth in value terms, but close to flat volume growth. In this context, Euromonitor International has examined the main drivers for food consumers in the region, identifying the following seven factors:

1)     Cost of Living

75% of consumers in Latin America are worried about the increasing cost of daily purchases

Source: Euromonitor International’s Voice of the Consumer: Lifestyles Survey

A growing number of people are migrating to private label and discounters for their food purchases and downtrading to lower price categories. Furthermore, with consumers looking for savings, private label is entering categories previously reserved for premium or traditional brands, offering good- quality products at affordable prices to compete.

2)     More Time at Home

After the pandemic, consumers in Latin America continue to spend more time at home. The shift has been driven by several factors. First, they generally have lower purchasing power. Second, several companies maintain hybrid working policies. Third, homes tend to now offer higher comfort and usability due to investments made during the pandemic. Many activities are now conducted at home, not only in terms of working but also entertaining, exercising, studying, and shopping. These trends have led to more frequent meal occasions at home.

3)     Digitalisation

Increasing connectivity influences the way consumers buy food in Latin America, in both the retail and foodservice channels. Digitalisation contributes to the growth of home delivery in foodservice; in recent years, higher numbers of consumers have paid with their smartphone and fewer have ordered in store/in person. Digitalisation also contributes to the growth of e-commerce. Convenient prices, free shipping, the variety of brands available, and the possibility of ordering at any time and from anywhere are the main reasons consumers choose the online option.Food consumption in latin america

4)     Convenience

As consumers in Latin America are spending greater time at home than before the pandemic, they need to accommodate more frequent meal occasions at home - many workers used to have lunch in the office from Monday to Friday. As a solution, foodservice delivery apps have grown in usage. On the other hand, packaged food categories that provide convenience have benefited as well, including frozen products such as hamburgers, pizza, potatoes, processed vegetables, and ready meals. Following investments made during the pandemic, better-equipped kitchens support this trend, with consumers owning a higher number of appliances such as air fryers, mixers, food processors, and freezers.Frozen Food Survey

5)     Experience

An increasing number of consumers want to enjoy life and not worry about the future, according to Euromonitor International’s Voice of the Consumer: Lifestyles Survey. Although the foodservice industry should benefit from this trend, visiting a restaurant at least once a week is still less likely than prior to the pandemic, according to the same survey. Instead, many consumers are trying to replicate a restaurant-like experience at home. Doing so is less expensive than eating out in foodservice outlets, better-equipped kitchens allow consumers to cook restaurant-quality meals more easily, and consumers are visiting friends and family homes more frequently.LAM Survey

6)     Health

Latin American consumers are increasingly treating food as medicine.

60% of Latin American consumers in 2023 stated that they look for healthy ingredients in foods and beverages and 41% stated that they carefully read nutrition labels on foods and beverages

Source: Euromonitor International’s Lifestyles Survey

Having health and nutritional properties is the attribute most sought after by consumers when buying food. For example, they are increasing their consumption of dietary supplements and vitamins, products with high protein content, and plant-based products. They are also reducing sugar consumption. Another factor that is having an influence on the packaged food industry is the expansion of labelling laws, regulations, and taxes. By utilising these strategies, governments are trying to influence the health of the population through warnings about the high content of fat, sodium, sugar, and calories in packaged food. Some companies have reformulated their products to avoid these labels.

7)     Sustainability

According to Euromonitor International’s Voice of the Consumer: Sustainability Survey, 66% of Latin American consumers declare that they are trying to have a positive impact on the environment through their everyday actions. However, only 46% of consumers feel that they are personally contributing to reducing climate change. High prices remain the main barrier consumers face when buying more sustainably. In addition, according to the same survey, Latin American consumers complain of unclear labelling and limited variety and accessibility of sustainable options. In relation to the topic of sustainability, fair trade, and support for local communities, are also attributes sought after by consumers when buying food.

The search for market opportunities

This is the context in which Latin American companies must operate; by analysing the seven key factors in a connected way to find market opportunities. For example, products that are sustainable must also consider affordability. On the other hand, products that are healthy might consider offering an enjoyable experience as well, and position themselves as permissible indulgence. Perhaps most importantly, the occasion of consumption, or when and with whom the consumer is going to eat, will determine the priorities in each case.

Learn more about the changing scenario of the global food industry in our report, Eating at Home: Opportunities in the New Consumer Landscape.


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