Coffee in Brazil

PROSPECTS

Coffee sales in Brazil continue to grow despite economic instability

While many fast-moving consumer goods faced deceleration or declines during the worst years of economic crisis, the Brazilian coffee market remains resilient and is growing faster year after year. This is particularly important for a country that occupies the position of global coffee leader, having surpassed the US in 2014, and accounting for a household penetration of 98%.

Foodservice channel resumes pre-crisis growth rhythm

Out-of-home consumption was severely impacted during the crisis, with most consumers having to reduce their eating-out expenses and prioritising at-home consumption to save more money. Even with timid signs of economic recovery, the foodservice channel resumes the pre-crisis volume growth pace and outperforms the retail rhythm.

Convenience stores: a potential threat to cafeterias?

Over the forecast period one of the fastest-growing retail channel types in Brazil in terms of number of outlets, will be convenience stores. Leveraged by flags like Carrefour Express, Pão de Açúcar Minuto and Extra Mini, these stores usually mimic modern retailers’ mix of brands and products, but on a small scale.

COMPETITIVE LANDSCAPE

3 Corações reinforces portfolio with premium offerings

Despite leading the market through more accessible product lines, the company remains the market leader and aims to explore premium market niches over the forecast period. Such strategy is reinforced by the company’s new product launchings either focusing on different regions of the world (like Tanzania and Sumatra) or the family brand Rituais (making a clear reference to creating a ritual of preparing and drinking coffee, aligned with Euromonitor International’s trend for 2019 of JOMO – Joy of Missing Out, through mindful consumerism).

Nestlé expands company presence in coffee in Brazil

Although ranking seventh in coffee retail volume in 2019, the company has a significant volume share in coffee pods, through the brands Nescafé Dolce Gusto and Nespresso. In 2019, however, Nestlé expanded its portfolio to include other coffee types in the country, including new versions of Nescafé instant coffee and brand expansion with standard fresh ground editions as well – both in two different lines: Origens do Brasil (highlighting coffees from different areas of the country) as well as Gold (claimed to be produced with higher quality coffee beans and superior roasting processes).

Starbucks consolidates by reproducing the coffee shop experience at home

Although far from more mature markets like the US, for example, where consumers can purchase Starbucks products in retail channels in RTD versions, an initial movement can be expected in the Brazilian market over the forecast period. In 2019, Nestlé Brasil established a partnership with Starbucks to sell products in retail.

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