Ice Cream and Frozen Desserts in Brazil

2021 DEVELOPMENTS

Closure of foodservice for months continues to impact ice cream sales

After suffering over a year of the negative impact of the COVID-19 pandemic, ice cream players have been hit hard by the restriction measures implemented by the government on consumer foodservice and some retail outlets which remained closed for months. Even at periods when restrictions were more flexible as through the end of 2020, average footfall remained at low levels as many consumers did not feel safe to visit crowded retail outlets.

Global brands invest in “hometainment” to offset drop in impulse consumption

Following health recommendations to prevent the spread of COVID-19 virus, and responding to the rising contamination rates at the beginning of 2021, a part of the population will continue to work and study from home in 2021, avoiding large gatherings and making fewer visits to retail outlets and foodservice establishments. As a result of home seclusion, a key trend impacting food categories is the shift towards traditional grocery retailers as the main channels for food as consumers concentrate their eating occasions at home.

Ice cream players compete for shelf space and consumers’ preference

As grocery retailers have become the new main channel since the outbreak of COVID-19, both retailers and manufactures have had to adapt their operations by prioritizing categories that are more popular for at-home consumption. Regarding the economic situation in the country, in 2020, government emergency aid had a considerable positive effect in driving and even increasing the consumption of products considered as non-essential, including ice cream.

PROSPECTS AND OPPORTUNITIES

Recovery of the sector highly dependent on the control of pandemic spread

Unlike many countries reaching solid economic recovery from the first semester in 2021, the scenario for Brazil remains relatively difficult, with rising inflation for basic grocery products and high unemployment rates plummeting the population’s purchase power and consumer confidence levels at the beginning of the forecast period. Considering the slow pace of vaccinations in the country, away-from-home routines and the rate of footfall in retail outlets are not expected to normalise immediately at the beginning of the forecast period.

Indulgence as the front-line claim for industry growth in the next years

For most snack categories, home seclusion led to strong growth potential for products positioned as healthier alternatives or with functional health benefits such as immunity boosters or digestive health support. This pattern among major food companies of launching new healthy lines has so far been more frequently observed for categories whose daily consumption was perceived as more impactful over consumers’ diets.

Premiumisation of ice cream parlours as new players emerge

Ice cream franchises have represented one of the fastest growing channels for sales in recent years, including brands with distinct price ranges varying from more economic value for money to more top-tier portfolios. Increasing presence in shopping mall food courts has allowed franchises to reach more middle income consumers, with stores both in order-in-counter and self-service formats, the latter being a classic design for ice cream shops in Brazil.