Homewares in Brazil

PROSPECTS

Improving economic conditions result in a positive performance

After more than two years of pessimistic indicators, the Brazilian economy finally showed signs of gradual and persistent recovery in 2017. Although moderate, GDP growth and increasing consumer confidence – solidified by growth of retail sales – were factors that also penetrated homewares, which is undoubtedly linked strongly with economic performance.

Food storage continues to outperform other categories

One of the underlying reasons behind the strongly positive performance of food storage in 2017 was related to the increasing cost-consciousness of consumers, which was exacerbated during the economic crisis. Brazilian consumers do not seek to simply avoid wastage during times of lower disposable income, but also to optimise food consumption and make the most of their food through using various types of dishes.

Value-added cookware lacks development compared with other product areas

More added-value cookware became available in Brazil towards the end of the review period, and sales were supported by a variety of options and different positioning; however, the levels of novelty, design and performance lagged behind other product areas. The first factor behind this was the worst economic crisis in decades, hampering launches of more added-value products unaffordable for middle- and lower/middle-income households.

COMPETITIVE LANDSCAPE

Tupperware continues to rank second within homewares

Tupperware Dart do Brasil Industria e Comercio continued to record strong growth within homewares in 2017, and is perceived as a manufacturer that offers high-quality and more-expensive products in comparison to other manufacturers. With its robust direct channel model, Tupperware was favoured by two driving forces.

Fierce competition in cookware is challenging for traditional manufacturers

The giant Grupo SEB do Brasil Produtos Domésticos is a clear example of a traditional player with important brands, such as Clock, Rochedo and Panex, having to pull through a recent period of declining sales. There were remaining elements of the economic crisis in 2017, such as cost-consciousness and careful shoppers.

Private label far from taking off in Brazil

Different from other categories within home improvement, private label was very underdeveloped within homewares in 2017. Retailers are generally more prone to displaying products from tier-one manufacturers, such as Tramontina, Nadir Figueiredo and Grupo SEB do Brasil Produtos Domésticos, followed by those from tier-two and entry-level manufacturers, which are typically locally-based manufacturers with either strong brand awareness or very competitive prices to appeal to cost-conscious consumers.

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