Hot Drinks in Uruguay

COVID-19 impact on hot drinks

In 2020, in response to the pandemic, consumption of hot drinks has been somewhat impacted as the Uruguayan economy has continued to suffer as a result of COVID-19. The Uruguayan GDP is projected to downfall -3.

COVID-19 country impact

Although the country declared a health state of emergency, it did not introduce a mandatory quarantine. The government called on its citizens to restrict social activities and avoid crowds, as well as recommending employees work remotely where possible.

Company response

As a result of the general decrease in purchasing powers, many consumers turned to more essential food and beverage options and therefore reduced their spending on hot drinks. In order to combat this challenge, many manufactures begun offering aggressive promotional offers and discounts, in alliance with some of the major supermarkets and hypermarkets in order to maintain volume and current value sales.

Retailing shift

In response to the pandemic, modern grocery retailers have become more popular as hypermarket and supermarket chains such as Ta-Ta, Tienda Inglesa and Disco and Devoto have benefited from offering a wide array of brands and price offerings. Likewise, hypermarkets and supermarkets have also been applying strong discounts and promotions as they are in a strong alliance with leading players and can therefore implement these types of strategies to maintain sales.

Foodservice vs retail split

In response to the outbreak of COVID-19, the government ordered all foodservice establishments to close, with some staying open to offer home-delivery servicers only. However, the majority of consumers are unlikely to purchase hot drinks for home-delivery, meaning most establishments have been unable to compensate for losses with this method.

What next for hot drinks?

While the number of COVID-19 infections and deaths has been growing drastically in Latin America, Uruguay has been able to control the spread of the pandemic which has allowed the country to gradually reopen the economy from May 2020. As a result, hot drinks total volume consumption is projected to decrease notably in 2020 but will have a quick rebound at the beginning of the forecast period.

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