In 2018, negative volume growth rates were witnessed due to shrinking demand, whilst supply seemed to have stabilised after large losses for two consecutive years. The government continued to exert direct pressure upon companies to fix or lower prices as hyperinflation – declared in full force in November 2017 – has rendered price regulations ineffective for most products.
Facing hyper-inflation rates, Venezuelans are spending all their income on food. Price increases are second in the minds of consumers who evaluate the convenience and affordability of products by comparing absolute price levels against their available resources whilst giving preference to products that can be consumed by all family members.
The exit of Alimentos Kellogg’s (Breakfast Cereals) and the closing of Plumrose Latinoamericana CA (Processed Meat) during the first semester of 2018 are recent events which reinforce a trend of increased concentration within packaged food. Leading manufacturer, Alimentos Polar, doubled its value share in spite of a significant overall volume loss since 2013, a sign that there are business opportunities in the midst of a recessionary environment.
Modern grocery retailers continue to capture a larger portion of retail value, followed by traditional grocery retailers. Supermarkets is the single most important retail distribution channel, followed by independent small grocers.
Venezuela will not resume growth without important changes to the political and economic framework, a possibility that is uncertain. Under the existing scenario, it is improbable that domestic companies will restore pre-crisis production levels, and substantial volume increases will therefore not be expected in packaged food, with most products recording negative volume CAGRs.
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Discover the latest market trends and uncover sources of future market growth for the Packaged food industry in Venezuela with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Packaged Food market research database.