A long national lockdown and strict preventative measures enacted by the government to prevent the spread of COVID-19 in the country are expected negatively affect the performance of baby food in 2020. At the onset of lockdown, parents initially stockpiled some products such as milk formula and prepared baby food as they panicked about access when stores closed during lockdown, and as many retailers’ shelves were empty pre-lockdown.
Nestlé Guatemala SA is expected to maintain leadership of baby food in 2020, due to increasing penetration across categories, good brand awareness, and a variety of options for mid-to-low income consumers. Furthermore, the company’s long-standing presence and traditions, supported by strong distribution, are also expected to aid the company’s performance in 2020, meaning the company is expected to gain importance and continue increasing value share over the forecast period.
Established companies, particularly those with dominant value shares such as Nestlé Guatemala SA, Bristol-Myers Squibb de Guatemala SRL and Abbott Laboratories Inc, are expected to be able to better face the crisis caused by COVID-19 in Guatemala in 2020. This is largely because these companies have strong distribution networks, that enable better performance compared to smaller brands.
During the pandemic, a wide variety of prepared baby food offerings stimulated performance as consumers had many options to choose from. The Gerber brand dominates prepared baby food in Guatemala, but over the last years of the review period, competition has been enriched with the presence of new entrants.
With limited opportunity for advertisement over the forecast period, certain brands, especially those selling baby milk formula, have opted to look to other options for promotion. This is a result of the introduction of the law on the Commercialization of Breast Milk Substitutes, promoted by the Guatemalan government and the Ministry of Public Health and backed by the World Health Organization (WHO).
Premiumisation is likely to aid value growth over the forecast period; however, the economic fallout of the pandemic may moderate this growth as customers grapple with lowered disposable incomes. With more options becoming available across baby food, there is an increasing presence of organic alternatives, imported brands and natural ingredients which are likely to become more important over the forecast period.
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This report originates from Passport, our Baby Food research and analysis database.
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