Fortified/Functional Packaged Food in Brazil

PROSPECTS

FF packaged food sales set to increase with improving economic conditions

Brazil is slowly recovering from an economic recession that started in 2014. Positive signs such as stable inflation and interest rates began to show at the end of 2017; however, gradual recuperation is expected.

Categories targeted at children set to propel growth in the future

While historically most food categories benefited from fortified/functional claims, as the recession passes and adult consumers become more informed and influenced by fitness enthusiasts, they will likely begin to experiment with other alternatives as well, such as naturally healthy products. This increased competition among categories will drive sales of fortified/functional childrens’ products over the next five years at higher rates than more “adult” types such as gum and oil.

Sweet biscuits resumes growth, but butter and spreads call most attention

The development of fortified/functional sweet biscuits sales was predominantly due to the slight uptick in economic growth, is consumers traded back up to products they are considered better than conventional offerings for their children. However, FF butter and spreads registered noteworthy growth in 2018.

COMPETITIVE LANDSCAPE

JBS SA gains share with new Doriana margarine claim

Butter and spreads is known for being quite stagnant, primarily for two reasons. Firstly, consumers see little room for experimentation in a category that is so ubiquitous among households and consumed almost daily.

Dairy incumbents Nestlé SA, Danone Groupe and Yakult Honsha Co Ltd brands lose share to local ones

In the increasingly competitive dairy category, local brands gained significant share of sales during the economic crisis as consumers traded down to cheaper offerings due to more restricted budgets. This also applied to FF dairy, in which leaders Nestlé, Danone and Yakult lost share in their respective categories to other local players.

Nestlé SA maintains leadership, while responding to consumer trends with fortified products

Present across several FF packaged food categories, Dairy Partners Americas Brasil Ltda (Nestlé SA) maintained its leadership in terms of retail value share in 2018, mostly due to well-known brands Ninho and Chamyto. However, as the company loses shares to local players, it seeks to increase the distance to runners-up through innovation.

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