Executive Summary

Aug 2018
Prospects
Consumers look for cheap prices

Given the complicated economic situation, consumers are very rational when making purchases and look for cheap offers and options. Faced with this situation, private label products, which are concentrated exclusively in the low price segment, registered strong growth in the last years of the review period.

SanCor’s weakness has negative impact on the offer

During 2017 and the first half of 2018, the company SanCor registered cheese production levels well below normal. This was a consequence of the financial crisis and the paralysis of most of its cheese factories throughout the country.

Spreadable cheese avoids the crisis

Spreadable cheese is the category posting the best performance in 2018 and is expected to maintain retail volumes similar to the previous year. Much of this performance is explained by the large number of promotions such as buy two for the price of one in the main supermarket and hypermarket chains of brands such as Casancrem by Danone Argentina SA.

Competitive Landscape
Companies attempt to boost consumption of processed cheese as a snack

Given the growing awareness among Argentinians about the benefits of consuming healthy products, companies are keen to position cheese as a possible alternative. The company Milkaut SA was very active in this trend with a large number of advertisements in the mass media.

SanCor sells cheese factories to small and medium-sized companies

The company SanCor suffered a deep crisis and was finally sold to Adecoagro SA in mid-2018. However, during 2017, the company divested a large number of factories that produced cheese.

Very atomised and competitive category

“Others” records a significant retail value share in Argentina, as a result of the large number of cheese-producing companies that exist in the country. According to industry sources, there are more than 600 companies that produce cheese in Argentina, most of them with a long tradition.

Prospects
Consumption of drinking milk products fails to recover despite being a staple food

In 2018, consumption of drinking milk products recorded a strong fall in retail volume terms for the third consecutive year. Currently, per capita consumption of drinking milk products is at one of the lowest levels in Argentinian history.

Consumers lose interest in fresh milk and seek practicality in shelf stable milk

Fresh milk registered very poor performance over the review period and was cannibalised by shelf stable milk. This trend is explained by several reasons.

Poor performance of powder milk due to shelf stable milk and the international market

Sales of powder milk were stagnant in volume terms in 2018 after having registered six consecutive years of decline. The main reason that explains the poor performance of powder milk is the constant promotions and discounts for shelf stable milk.

Competitive Landscape
Adecoagro SA acquires SanCor Cooperativas Unidas Ltda

After a year of many rumours, SanCor Cooperativas Unidas Ltda was finally acquired by local company Adecoagro SA after battling several international companies including Fonterra and Lactalis. The company agreed with SanCor to buy 90% of the shares.

Small companies gain presence in country’s interior

The complicated situation involving SanCor Cooperativas Unidas Ltda generated important changes in retail value shares. Although the leading company Mastellone Hnos was the best performer by winning much of the space left by SanCor, many small companies also grasped the opportunity.

Offer of free from lactose milk continues to grow

Free from lactose milk is the category posting best performance registering double-digit growth in 2018. This excellent performance is due to the fact that many lactose-intolerant Argentinians currently have a greater variety of brands and at attractive prices.

Prospects
Fall in consumption before strong price increases

During 2017, the prices of yoghurt and sour milk products increased well above general inflation as companies focused primarily on improving profitability, mainly leading companies such as Danone Argentina SA. Given this scenario, consumption decreased sharply in retail volume terms in 2017, and although at a lower rate, it also decreased in 2018.

Consumption sensitive to economic situation

Yoghurt and sour milk products is one of the most volatile and sensitive categories to price variations within dairy products in Argentina. Despite the efforts of leading companies over the review period to position it as an alternative to milk at breakfast, Argentinians continue to consider yoghurt as a dessert.

Sales of FF probiotic yoghurt plummet

Consumption of FF probiotic yoghurt continues to contract strongly in retail volume terms at double-digit rates in both 2017 and 2018. The level of consumption of FF probiotic yoghurt is at very low levels and far from the volumes recorded in the first years of the review period.

Competitive Landscape
SanCor crisis impacts Alimentos Refrigerados SA

In 2016, SanCor Cooperativas Unidas Ltda sold its yoghurt business to Alimentos Refrigerados SA. Despite the sale, production and distribution was still in the hands of SanCor.

Small companies take advantage of the SanCor crisis

The crisis facing SanCor Cooperativas Unidas Ltda had an important impact not only on sales but also on changes in the composition of the market. In the absence of brands such as Yogs and Yogs Light by SanCor, consumers chose brands from small companies with a much lower price than brands such as Ser and Yogurisimo from Danone Argentina SA.

Important launches aimed at H&W to boost sales

Despite the sharp fall in sales in retail volume terms, companies continue to make important launches to try to soften the fall in sales. In the first months of 2018, SanCor Cooperativas Unidas Ltda launched SanCor Vida without sugar and reduced in lactose in drinking yoghurt and flavoured yoghurt.

Prospects
Fall in other dairy sales before strong price increases

In 2018, sales of other dairy registered for the second consecutive year decline in retail volume terms. One of the main reasons for the fall in consumption were higher prices than general inflation.

Cream supply restricted by production problems

The supply of cream continues to be limited in 2018 although the availability on supermarket shelves is better than that seen in 2017. Supply problems are due to the lack of fat, the main input for the production of cream.

Plain condensed milk dodges the crisis

Plain condensed milk recorded the best performance in retail volume terms in 2018. This product is mainly used to prepare desserts at home.

Competitive Landscape
Alimentos Refrigerados SA’s sales fall because of SanCor

In 2016, SanCor Cooperativas Unidas Ltda sold its chilled dairy desserts business to Alimentos Refrigerados SA. Despite the sale, it was agreed that production and logistics would continue to be carried out by SanCor.

Danone looks to new flavours and advertising to boost sales

One of the main strategies employed by Danone Argentina to try to boost or, if necessary, soften the fall in sales in chilled dairy desserts is through launches of limited edition flavours and advertising on TV. In 2018, the company presented a wide variety of flavours, notably Danette Vainilla de Madagascar (Danette Vanilla from Madagascar) and Danette Chocolate de Bélgica (Danette Chocolate from Belgium).

Three companies dominate other dairy

Danone, Alimentos Refrigerados and Mastellone clearly dominate sales of other dairy products in Argentina. During 2017, Danone capitalised most successfully from the lack of products from Alimentos Refrigerados SA due to the aforementioned complications with SanCor.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Argentina with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Argentina, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Argentina market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in Argentina?
  • What are the major brands in Argentina?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Butter and Spreads

Cheese

Drinking Milk Products

Other Dairy

Yoghurt and Sour Milk Products

Packaged Food in Argentina - Industry Overview

EXECUTIVE SUMMARY

Packaged food sales fall for third consecutive year
Promotions and discounts to maintain sales
Small companies take advantage of SanCor crisis
Other grocery retailers continue to gain ground
Recovery of packaged food sales expected

FOODSERVICE

Sales to Foodservice
Small companies supply large customers
Unpackaged food wins sales share
Sales of packaged food to foodservice fall again
Consumer Foodservice
Fast food wins customers
Value sales grow below rate of inflation
Encouraging horizon for consumer foodservice

CATEGORY DATA

Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 5 Sales of Packaged Food by Category: Volume 2013-2018
Table 6 Sales of Packaged Food by Category: Value 2013-2018
Table 7 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 8 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 9 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 10 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 11 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 12 Penetration of Private Label by Category: % Value 2013-2018
Table 13 Distribution of Packaged Food by Format: % Value 2013-2018
Table 14 Distribution of Packaged Food by Format and Category: % Value 2018
Table 15 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 16 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources