When the COVID-19 pandemic arrived in Brazil in March 2020, there was panic buying of baby food among consumers, mainly in relation to milk formula products, with volumes increasing a lot in this month due to stockpiling, but then returning to normal levels in the months that followed. Various types of milk formula will therefore be the most dynamic products in value terms in 2020, as milk formula is considered as an essential product, especially when prescribed by doctors.
With some products, such as milk products (eg powder milk, condensed milk, milk formula), seeing sales spikes when COVID-19 arrived in the country, Nestlé took on extra employees in the production operations at its factories to ensure continuity of supplies of its products to the large supermarket and hypermarket chains. This was particularly needed at the beginning of the pandemic, when consumers started to stockpile these products at home.
Prepared baby food is not perceived as an essential item by the vast majority of Brazilians, meaning that these products did not benefit from home seclusion during the social isolation in the COVID-19 pandemic. In addition, as parents were spending more time at home, more of them were able to prepare home-made baby food, seen as being not only cheaper, but also healthier.
The main players in baby food expect stability in volume sales for some categories, such as milk formula, as they are essential products in baby food, and are often prescribed by paediatric doctors and are therefore expected to record a better performance than other categories.
Prepared baby food should have its sales partly boosted over the forecast period due to its convenience for women working outside the home. Although already slightly accounted for in the share of economically active women, more women in the workforce are busier overall besides just having a job, especially because commute times in Brazil can be extremely long due to traffic and poor public transport.
Dried baby food, which has large consumption levels concentrated in the northeast region with its high penetration levels, is expected to see negative volume growth over the forecast period. ANVISA (Brazilian Health Regulatory Agency) is set to approve new legislation that emphasises the high content of ingredients that can potentially be harmful when consumed in great quantities such as sugar, fat and salt.
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This report originates from Passport, our Baby Food research and analysis database.
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