Concentrates in Brazil

2021 DEVELOPMENTS

Concentrates performs well during times of economic instability

Concentrates is a category known for being an affordable substitute for juice and strongly appeals to lower- income families who want to consume juice-like products but lack the necessary incomes to make them part of their regular purchases, as they focus on more essential items.

Innovation needed to offer consumers excitement

Early in 2021, Tang, owned by Mondelez, collaborated with reality show Shark Tank in an attempt to identify innovation potential and investment ideas to appeal to children aged 6-13 years old. A huge part of the brand’s consumer base is comprised of children.

Proximity shopping remains the focus for many brands

Proximity shopping has gained in importance in terms of demand for concentrates through independent small grocers, as brands responded by developing new logistics strategies. While supermarket and hypermarkets remain the leading distribution channels for the category, the pandemic has meant that many consumers have preferred to shop close to home, with smaller local stores which are easily accessible proving to be attractive alternatives.

PROSPECTS AND OPPORTUNITIES

Further innovation needed in terms of diversification for a mature category

While demand for concentrates is predicted to remain stable heading into 2022, in line with further financial struggles by lower-income consumers as the impact of the pandemic on the local economy remains relevant, off-trade volume sales are likely to gradually return to decline from 2023 onwards, a trend already noted prior to the pandemic. This is because, despite appealing to more price-sensitive consumers, the category is mature, and lacks flavour innovation, with fruit flavours dominating both liquid and powder formats, although the latter also offers ice tea variants.

Expanding the consumer base: How to appeal to adults?

Concentrates, especially powder variants, are not particularly appealing to adults, especially since they lack a natural positioning, and are not aligned with health and wellness trends, and therefore mainly target lower-income consumers. This poses a challenge in how concentrates can innovate to appeal to an older audience.

Health and wellness trend to influence new product development

Some producers of concentrates have previously attempted to create a healthier image for their brands to broaden their appeal and keep pace with the changing preferences of Brazilian consumers. Mondelez, the leading player in powder concentrates, has been particularly active in this regard.