Food, Beverages and Tobacco in Latin America

Key Findings

The industry is forecast to witness stable future growth

As Latin America’s economies gradually recover from the COVID-19 crisis, the industry is poised for stable future development. Soaring food price inflation in 2021 and foodservice reopening will contribute to a spike in revenues over the short term. Long-term growth will be largely driven by robust domestic demand from the region’s expanding population and rising disposable incomes in the post-pandemic environment.

Meat production to remain pivotal for the industry’s future development

Given the region’s strong stance in livestock production, the meat sector will remain the key growth driver in the food industry, with Brazil, Mexico and Argentina being among the world’s top beef producers. Expanding global demand for animal protein, especially from China, will contribute to the sector’s future growth.

Changing lifestyles and preferences to shape future demand

While lower-income population continues to opt for more affordable products and brands, higher-income consumers remained largely resilient to COVID-19 and are set to drive premiumisation in the food and drinks industry. Over the long term, rising demand for convenience and increasing health-awareness will continue to support demand for ready-to-consume, healthier and functional foods, as well as plant-based protein alternatives.

Overall industry concentration remains relatively low

The food, beverages and tobacco industry in Latin America is dominated by small companies, yet large enterprises generate the most revenue. While the food industry remains highly fragmented, the beverage and tobacco industries are highly concentrated across many countries.

Latin America remains a net exporter of food and beverages

Despite temporary beef trade restrictions from China, Brazil is expected to remain one of the largest meat exporters globally. Latin America is anticipated to remain a net food and drinks exporter, yet the heavy reliance among Central American countries on the food supply from the US poses a threat to food security in that part of the region.