Following the outbreak of COVID-19 in Brazil, restriction measures to control circulation in crowded areas were quickly implemented by the government, with only some essential retail outlets such as supermarkets and drugstores permitted to remain open. Self-service restaurants and food courts in shopping centres, where the purchase of confectionery in checkout counters is very common, had to close for lengthy periods in 2020 and were only able to offer takeaway or home delivery service for a number of months.
Due to isolation measures and movement restrictions, which are expected to continue in 2021, remote learning became the new standard as schools remain closed and continue to operate mostly under this format even when allowed by the government to return to physical attendance. As a key consumer group for sugar confectionery, children staying at home and not travelling so much between home and school is having a negative impact on sales, mainly for categories such as boiled sweets and lollipops which are often positioned specifically for this target consumer group and dependent on impulse purchases.
Faced with the challenge of shifting their appeal from impulse purchases in on-trade locations to planned consumption through retail channels, major confectionery companies concentrated efforts in ensuring traditional brands remained present on retail shelves and encouraging consumers to maintain their consumption of sugar confectionery. Exploring new opportunities other than standard advertising aimed at children, major confectionery companies focused on expanding the appeal of their long-consolidated brands, targeting also young adults which has becoming an important consumer group during pandemic.
As the category witnesses a historic downwards trend in overall demand, sugar confectionery has had to also endure the closure of foodservice and non-essential retail outlets as well as a drop in impulse purchases since the outbreak of the COVID-19 pandemic. Despite the expectations for a positive recovery scenario as the pandemic is expected to be brought under control from 2022 onwards, it remains partly uncertain to which level non-essential categories, including sugar confectionery, will be able to regain their pre-pandemic form in the coming years.
As the vaccination programme continues to progress at a slow pace, the COVID-19 pandemic is expected to continue to affect consumer lifestyles in the short term, although isolation will gradually ease in the early years of the forecast period. This extended period of low footfall in non-essential and foodservice outlets will continue to impact volume sales of sugar confectionery as out-of-home routines and impulse purchase occasions are essential drivers for many categories.
A key factor for recovery over the forecast period will be the pace at which the vaccination programme progresses in Brazil, as this will determine when consumer foodservice outlets will be able to reopen to full capacity, and when consumers will feel more comfortable visiting outlets. The rate of infections will also continue to affect the supply of raw materials in sugar confectionery, with projected schedules remaining in flux as the pandemic continues to shape life in Brazil.
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This report originates from Passport, our Sugar Confectionery research and analysis database.
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