High inflation led to significant unit price rises in dairy products and alternatives during 2023 putting pressure on household incomes. This in turn forced consumers to adopt a more conservative approach to their spending.
According to the industry sources, forecasts for maritime transport in 2023 point to "weaker" earnings in the container segment due to the stabilisation of freight rates. The industry is also being subjected to a tougher-than-expected recession, pandemic-related lockdowns in China, and pressures from the war in Ukraine.
During 2023, the resumption of society in the wake of the pandemic including the return of children to the classroom and parents to their places of work led to growth in disposable incomes which thereby boosted sales of dairy products and alternatives. It is common for children to be given drinking milk and other dairy products before leaving for school.
According to the IMF, in 2022, Panama’s GDP grew by 11% with 4.4% growth expected for 2023, making Panama the fastest growing economy in LATAM.
Panama’s infrastructure is among the best in Latin America, with a good network of roads, railroads and several international airports, although roads in rural areas remain poor. In 2013, the President introduced a five-year investment plan worth USD13.
Over the forecast period, sustained growth in consumption of dairy products and alternatives is expected. However, as economic uncertainty continues, brands are predicted to experiment with packaging formats, offering value or family-size packaging to encourage spending among middle to higher income consumers, while lower income consumers will look for smaller package options that they can still afford (shrinkflation found in the region may be an option).
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Dairy Products and Alternatives
This report originates from Passport, our Dairy Products and Alternatives research and analysis database.
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