The outbreak of COVID-19 caused retail volume sales of fresh milk in Peru to decline sharply in 2020. With consumers spending most of their time at home and reducing the frequency of grocery shopping trips due to lockdown measures and concerns about community transmission of the virus, many became more inclined to choose shelf stable milk, which has a much longer storage life.
After recording a steep double-digit decline in 2020, flavoured milk drinks is expected to see retail volume sales return to positive territory in 2021. The reopening of schools should provide a major boost to demand in the category, as these products are commonly purchased for children’s lunchboxes.
Following a USD30 million investment in packaging technology over 2019-2020, in March 2021 Grupo Gloria introduced a new recyclable plastic bottle for its Gloria Leche UHT shelf stable milk range, which offers full fat, semi skimmed and lactose-free varieties. In the short term, this packaging innovation should ensure the company remains well positioned to capitalise on the increase in demand for longer-lasting milk products that has resulted from the COVID-19 pandemic.
Retail volume sales of shelf stable milk are expected to decline over 2022-2023 as consumers resume their normal routines and the longevity of milk in general becomes less of a concern. Demand for this product type should then start to increase again from 2024, with volume growth projected to accelerate gradually towards 2026.
As of early 2021, the only private label present in shelf stable milk was Cencosud’s Cuisine & Co. However, this category is expected to see the launch of new private label products from other retailers during the early years of the forecast period.
Heightened budget-consciousness arising from the negative economic effects of COVID-19 is likely to encourage more aggressive discount campaigns and other types of price-based promotions within drinking milk products during the early part of the forecast period. In particular, categories such as flavoured milk drinks are expected to witness an increase in such promotional activities as children return to school.
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This report originates from Passport, our Drinking Milk Products research and analysis database.
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