Coffee in Brazil

PROSPECTS

The industry’s efficient response is key to maintaining a positive performance

Although Brazil is the leading coffee consumer in the world – surpassing the US in 2014 – and the economy is showing only timid signs of recovery, coffee retail volume sales remained positive in 2018 and will likely continue to do so over the forecast period. Drivers such as GDP growth, available income, product pricing and persistent habits are undeniably relevant for future demand, while soft drivers have proven to be determinant in the category.

Growth of fresh ground coffee pods declines and maintaining sales consistency is a challenge

One of the most promising coffee types in the review period, fresh ground coffee pods, witnessed declining growth in 2018 and this is expected to continue until 2023. Manufacturers face the challenge of maintaining sales consistency, leveraged by the widespread offer of receiving free fresh ground coffee pods when purchasing a machine, often to the same value as the equipment.

Instant coffee seeks reinvention through functionality

After a challenging review period performance, with weak retail volume growth for instant standard coffee and instant coffee mixes, the industry is confident about its reinvention over the forecast period. By taking advantage of Brazilians’ appreciation of coffee as a flavour, manufacturers aim to reposition the product either as an ingredient for emerging food and beverages categories, or by focusing on its functionality.

COMPETITIVE LANDSCAPE

3 Corações leads with locally-sourced coffee

3 Corações continued to lead coffee in 2018, with a broad portfolio of brands, ranging from national to regional and premium to economy. Most recently, the company has followed the movement towards premium products, with its Regiões do Mundo (Regions of the World) and Safra Especial (Special Crop) editions.

Melitta enters fresh ground coffee pods and attracts new consumers

Being a late adopter of the fresh ground coffee pod format in Brazil, Melitta do Brasil Indústria e Comércio finally entered the category in 2018. Although the player suffers some disadvantages, such as the consolidated positions of its competitors, the move is expected to bring new consumers to fresh ground coffee pods.

Nestlé Brasil invests in personalisation

Occupying second place in fresh ground coffee pods, Nescafé Dolce Gusto was presented as a personalisation case in 2018. New production technology enables consumers to customise the amount of coffee pods in their preferred flavours in a single box – something possible in a much more efficient way than if done manually.

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