Food and Drink E-Commerce in Brazil

2020 IMPACT

Food and drink e-commerce booms despite grocery stores being allowed to open

Although most store-based retail channels in Brazil were required to remain closed for an extended period during 2020 as part of the COVID-19 quarantine lockdown, these restrictions did not apply to grocery retailers. This is because grocery retailers is considered to be an essential retail channel, exempting grocery retailers from the requirement that all retail stores needed to remain closed, a key plank of official measures aimed at curbing the spread of the COVID-19 virus.

Indulgence food and products with long shelf life among popular online purchases

While food and drink e-commerce reported very strong growth generally over the course of 2020, some categories of packaged food and beverages fared better than others in the online arena. Moreover, trends tended to shift as the COVID-19 situation unfolded.

High prices limit the consumer base for food and drink e-commerce

One of the factors that has traditionally held the development of food and drink e-commerce in Brazil is that the prices charged online tend to be higher than the prices charged in stores. This is linked to the fact that there is still low penetration for food and drink e-commerce in comparison with the overall sales generated grocery retailers, which means that growth in this category is still being driven largely by a relatively limited group of digitally savvy affluent customers.

RECOVERY AND OPPORTUNITIES

Food and drink e-commerce slated for a strong performance over the forecast period

The forecast period is expected to see food and drink e-commerce build on the very strong performance it registered during 2020. Although food and drink e-commerce has traditionally been a small category of e-commerce in Brazil and while e-commerce generally has been a fairly limited retail channel in the country, the experiences of 2020 have led many consumers to come to appreciate the benefits of shopping for their groceries online.

Challenges to be overcome before food and drink e-commerce can realise potential

While there is strong potential for food and drink e-commerce to register strong growth in Brazil over the forecast period, significant barriers to the further development of the category will need to be overcome if online grocery shopping is to become a regular habit for significant numbers of consumers. In particular, the category’s leading players will have to play their part in terms of providing customers with a more reliable shopping experience.

Improvements to logistics essential for strong growth in food and drink e-commerce

Another of the major challenges that will need to be overcome if food and drink e-commerce is to realise its full potential during the forecast period is the difficulties that customers often face receiving their deliveries. Indeed, recent years have seen the underdeveloped state of logistics and delivery systems create bottlenecks in the development of drink e-commerce.