Health concerns resulting from the pandemic, aggravated by the lockdown and movement restrictions, with Chileans doing less physical exercise, made consumers continue to pay attention to the ingredients of the beverages and the warning labels on packaging, guidance that was imposed by the Chilean labelling law from 2017. Nevertheless, given the more austere economic situation, consumer migration between categories increased, and segments such as reduced sugar beverages saw their consumers migrating to other cheaper options such as tap water and powder concentrates, underpinning the decrease of BFY beverages.
As a concentrated market between local manufacturer/distributer CCU and Coca-Cola de Chile, the reduced sugar beverages portfolio benefited during the peak of the supply and distribution issues caused by the COVID-19 pandemic, at the beginning of the health crisis. As the traditional and modern channels struggled to maintain their stocks of many products across their portfolios, the wide distribution networks of CCU and Coca-Cola Chile guaranteed a steady supply of products during most of the time.
The increase in importance of the traditional channel, typically associated with convenience in contrast to the long queues at supermarkets, and the former’s limited capacity due to health safety guidelines, is one of the challenges for producers of BFY beverages to overcome. With limited shelf space, the portfolio mix that companies from the traditional channel have available is likewise very limited, especially when it comes to products that have a lower consumption incidence among the general population, compared with regular counterparts, as those within the reduced caffeine, fat and sugar subcategories.
With the expectation of economic recovery in 2021 and an increase in employment levels, it is also expected that consumer income will see a slight increase, bringing back to BFY beverages the consumption that migrated towards other categories during the pandemic. Along with the reopening of foodservice venues for local consumption and the increase of out-of-home consumption occasions, it is expected that volumes will return to their pre-pandemic levels, growing more than regular non-healthy options, what is specially perceived in the reduced sugar beverages subcategory.
Despite being the channel that registered the highest growth among all, e-commerce is still incipient for BFY beverages. Companies such as CCU, with Labarra.
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