Naturally Healthy Packaged Food in Venezuela

PROSPECTS

Government-controlled prices and inputs continue to prevent volume sales growth

Expansion in NH packaged food remained adversely affected by the discretionary allocation of government-controlled imports of wheat in 2017, which hindered the production of NH high fibre food, the largest category within NH packaged food. A sustained fall in wheat imports has led to a reduction in the number of brands and products in categories such as NH high fibre sweet biscuits, NH high fibre bread, NH high fibre breakfast cereals and NH high fibre pasta.

An increase in NH olive oil imports brings relief to consumers in 2017

Large volume declines in the supply of NH olive oil during 2015 and 2016 resulted in a marked absence of brands, but the situation improved in 2017, as imports of the product increased significantly, allowing the category to be the only one yielding a volume sales growth rate within NH packaged food. In Venezuela, olive oil is perceived as beneficial for heart health; but consumption is still low, not only because it is an acquired taste, but also because high prices prevent the enlargement of the consumer base.

Continued input insufficiencies prevent volume sales growth in NH high fibre food

NH high fibre food is perceived as helpful for digestive health, with fibre being promoted as beneficial for bowel regularity. In this regard, the majority of consumers of NH high fibre food are adults.

COMPETITIVE LANDSCAPE

Peanuts and plantains sustain PepsiCo’s leadership in spite of supply chain difficulties

While NH high fibre food was the largest category in NH packaged food based on retail sales in 2017, PepsiCo led in overall terms 2017 due to a helpful combination of a comparatively large increase in the average unit price and a stronger product presence. PepsiCo´s strength is in NH fruit snacks.

International players lead NH packaged food but innovation is negligible

Bimbo de Venezuela SCA ranked second in NH packaged food in 2017, thanks to its strong dominance of the NH high fibre bread category with its flagship brands Bimbo, Holsum and Oroweat, after losing all presence in NH cereal bars in 2014. Kraft Foods Venezuela CA used to have the lead in NH high fibre sweet biscuits with the umbrella brand Belvita, which could be found in several formats but has lost a great deal of presence since 2015.

A split demand based on income levels is expected for NH packaged food

The adoption of healthier lifestyles will continue taking root among high-income consumers, while consumers in the low-income stratum will keep buying standard, cheaper food that can be eaten by all family members instead of opting for health and wellness varieties, which are more expensive. In this context, plantain chips and peanuts will continue to be affordable alternatives to consumers, given that manufacturers are starting to offer large-sized packs that increase the value of the purchase.

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