Dairy in Latin America

March 2018

Dairy is the most important category within packaged food in value terms for Latin America, exceeding USD430 billion in 2017 and showing quite polarised growth between the countries in the region. Despite the fact that dairy consumption in Latin America is not as sophisticated in terms of product scope compared to more developed regions, there are also market opportunities that will be explored throughout this report.

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There is still space to sophisticate Latin American dairy consumption

Although in Latin America dairy is considered a widely consumed staple, it is important to understand its consumption formats. While local consumers spend less than half of what their North American and European counterparts in the category spend, much of the consumption still comes from unpackaged artisan-al goods.

Brazil continues to play a major role in Latin American sales and dictates the region’s performance

While relevant Latin American dairy markets such as Chile, Mexico and Argentina registered positive growth in constant USD terms over 2012-2017, Brazil, which makes up 37% of total dairy revenues in the region, registered currency exchange issues and underperformed on a foreign currency level. Despite the negative performance, Brazil still has potential for growth depending on its economic performance over the next five years.

Important mergers and acquisitions will continue to shape dairy in Latin America

Despite the fairly high fragmentation, dairy in Latin America has a few large players. The consolidation of Mastellone HnosSA and Grupo Lalain the region, following acquisitions in Brazil and Peru, may continue to shape a more homogeneous demand for milk, cheese, yoghurt and derivatives in the region.

Modern grocery retailers continue to gain presence and increase their relevance in the region

As Latin American consumers seek greater convenience of buying all their groceries in one place, popularity of hypermarkets and large supermarkets continues to grow. As inflationary movements and a lower purchasing power are generating a higher price sensitivity, consumers are tightening their belts and seek out promotions. This movement is likely to attract more foreign investment as dairy producers will ultimately benefit from a more simplified retail network where one listing in a hypermarket reaches more consumers.

Introduction

Key findings
Scope

Regional Overview

Putting Latin America into context
Dairy in Latin America to register steady growth over the next years
Cheese registers the best performance even with a higher unit price
Brazil’s negative performance offset by growth in other countries
Drinking milk products sees poorest performance in the region
Exchange rate results differs from local performance
Modern retailers continue to gain space in Latin America’s dairy sales
Modern retailers have a major share in dairy sales in Latin America

Leading Companies and Brands

Media exposure dictates brand participation in Latin America
Higher promotional activities drive brands’ consolidation
Companies focus their efforts on a handful of Latin American countries
Important ranking changes on Latin America’s dairy scenario

Forecast Projections

Overall positive prospects for dairy revenues in Latin America
Brazil’s dairy market expected to recover after negative review period
Product variety contributes positively despite the market maturity
Lifestyle trends and awareness are drivers for dairy growth in Latin America

Country Snapshots

Argentina: market context
Argentina: competitive and retail landscape
Bolivia: market context
Bolivia: competitive and retail landscape
Brazil: market context
Brazil: competitive and retail landscape
Chile: market context
Chile: competitive and retail landscape
Colombia: market context
Colombia: competitive and retail landscape
Ecuador: market context
Ecuador: competitive and retail landscape
Guatemala: market context
Guatemala: competitive and retail landscape
Mexico: market context
Mexico: competitive and retail landscape
Paraguay: market context
Peru: market context
Peru: competitive and retail landscape
Uruguay: market context
Uruguay: competitive and retail landscape
Venezuela: market context
Venezuela: competitive and retail landscape

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models
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