The organic packaged food category is still in development in Peru in 2020 with the only two subcategories that have any relatively substantial retail value sales being organic prepared baby food and organic pasta of which the latter has the largest value share. Organic prepared baby food saw a steep increase in retail value sales growth, albeit from a very low base, whereas organic pasta saw a substantial decrease in retail value sales.
In Peru, both organic prepared baby food and organic pasta had very low participation in 2020, with only hypermarkets offering organic packaged food at the end of the review period. There is no opportunity for penetration of many other product types in the short term, as demand is so low due to a lack of understanding amongst most Peruvians.
KMC International SAC launched its organic prepared baby food brand Ama in 2019 and proved to be highly successful as the company took the leading place in organic packaged food from RAM Industries SAC in 2020. However, although baby food and pasta are the two most significant areas of organic packaged food in Peru there are other Peruvian manufactured organic food products, but these are mainly chocolate, coffee, and tea which are primarily produced for export to countries where consumers are willing to pay extra for organic attributes.
Studies conducted by universities show that local consumers associate organic with vegetables such as lettuce or tomatoes, but not with bread or meat. Therefore, the concept that Peruvians have of what organic represents is contradictory to what organic packaged food can actually offer.
Despite lack of knowledge, the main threat to greater penetration of organic packaged food in Peru is the high unit price. Most brands are imported as the small category size does not make local production profitable, creating limited availability of organic products.
A successful strategy would be to focus on young professionals as well as single to two-person households where there are lower budget constraints. In addition, young consumers with access to the internet and those with greater knowledge of the concept of organic packaged food and its benefits to health are willing to pay a premium price for these products.
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This report originates from Passport, our Organic Packaged Food research and analysis database.
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