At first, when the state authorities in the main Brazilian cities introduced social isolation after the arrival of COVID-19 in March 2020, many families started to stock up on shelf stable milk in their homes due to its longer shelf life, which is much longer than for fresh milk, which has to be consumed on average within 48 hours. With the length of the quarantine periods, retail sales then returned to more regular levels.
Another major impact on drinking milk products due to COVID-19 was an increase in powder milk sales, in both retail volume and value terms. Powder milk is a relatively inexpensive product, especially for the low-income population living in large cities and particularly in the states of the north and northeast regions of the country.
With school closures during the pandemic, the consumption of on-the-go packs of flavoured milk drinks saw a marked decline in 2020. As smaller packaging makes up a great deal of such sales, the category suffered a negative impact from the social isolation with the arrival of COVID-19 in the country.
Even with the shortage of milk, which saw prices rise and these increases being passed on from producers to end consumers, with price growth of around 10% to 20% above the annual average in this period, shelf stable milk is considered as an essential product on consumers' shopping lists, maintaining its demand. The predicted volume growth for the 2021-2025 period will be driven by sales of shelf stable milk, given its convenience and extended shelf life, helped by increasing sales in some regions of the country where its per capita consumption is still low.
Despite generating significant value sales, cow’s milk only offers small profit margins. Nestlé Brasil therefore decided to leave shelf stable milk in 2019, selling its brands Ninho and Molico under licence for 10 years and factories to Laticinios Bela Vista, a domestic company that has been growing a lot in the category in recent years.
A pioneering new launch was seen in May 2020, a time that coincided with the outbreak of COVID-19 in the country, with the first dairy product boasting immune benefits. This came in the shape of Laticinios Bela Vista’s launch of ImunoDay, a new flavoured milk drink with yeast beta-glucan, which is effective in strengthening immunity, attracting the same potential consumers that purchase vitamins and dietary supplements in drugstores.
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This report originates from Passport, our Drinking Milk Products research and analysis database.
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