Sugar Confectionery in Latin America

March 2020

Sugar confectionery is facing challenging times in Latin America, with a difficult economic situation in several countries, growing consumer health concerns, and new laws that affect sugar consumption. Companies must use innovative strategies to keep on growing in this environment, launching products that provide sensory experiences, products with portable packaging to consume anywhere and at any time, and products that offer permissible indulgence.

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This report comes in PPT.

Key Findings

Recession in Latin America depresses growth

Brazil and Argentina were both plagued by economic difficulties over the review period. Growth in confectionery depends on consumers having spare disposable income, and a recession that consumers feel in their wallets is therefore going to have a direct impact on sales.

Arcor SAIC maintains its leading position

Arcor is one of the world’s leading producers of sugar confectionery, and exports to most countries in Latin America. It benefits significantly from offering a range of brands in the low- and mid-priced segments. The company has wide distribution and invests heavily in new products, and in marketing and promotional activities.

Traditional retailers are key

Traditional grocery retailers will remain a dominant presence, although supermarkets, hypermarkets and convenience stores are likely to make gains as they expand. In some countries, the most important channel is street kiosks (included in “other grocery retailers”), which benefit from impulse sales.

Health a concern for both Latin American consumers and their governments

Warning labels on packaging and a general trend towards health and wellness mean that consumers are increasingly aware of the nutritional risks of sugar confectionery. Some governments have prohibited any marketing to children or the sale in schools of any product which is high in sugar, sodium, calories or saturated fat.

Producers adapt to new environment

Consumers are limiting the consumption of sugar in order to reduce weight, to improve their appearance or for health-related reasons. Producer strategies to face health concerns include offering sensory experiences and permissible indulgence products (eg reduced sugar and functional benefits).

Key findings
Putting Latin America into context
A return to growth expected in the region after a turbulent review period
Recession in Brazil led to across the board declines
Sugar confectionery categories perform similarly in each country
Heavy losses in Brazil skew otherwise positive regional performance
Health concerns affect growth in most countries
Regulatory efforts expand across Latin America
Traditional retailers still generate large part of confectionery sales
Distribution strategies need to focus on access to traditional retail
Multinational presence means high degree of consolidation
Arcor SAIC rapidly gaining market share
Leading players present throughout Latin America
Halls benefits from convenience and health trends
Mexico expected to generate most of the growth in Latin America
Opportunities and threats for future sugar confectionery growth
Population and GDP growth are the main drivers of future expansion
Regulatory environment and health concerns add uncertainty
Brazil: market context
Brazil: competitive and retail landscape
Mexico: market context
Mexico: competitive and retail landscape
Argentina: market context
Argentina: competitive and retail landscape
Colombia: market context
Colombia: competitive and retail landscape
Guatemala: market context
Guatemala: competitive and retail landscape
Chile: market context
Chile: competitive and retail landscape
Peru: market context
Peru: competitive and retail landscape
Bolivia: market context
Bolivia: competitive and retail landscape
Ecuador: market context
Ecuador: competitive and retail landscape
Uruguay: market context
Uruguay: competitive and retail landscape
Dominican Republic: market context
Dominican Republic: competitive and retail landscape
Costa Rica: market context
Costa Rica: competitive and retail landscape

Packaged Food

In packaged food we consider two aspects of food sales: 1) Retail sales. 2) Foodservice. Retail sales is defined as sales through establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. This excludes hotels, restaurant, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition EXCLUDES the purchase of food products from foodservice outlets for consumption off-premises, eg impulse confectionery bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. Foodservice sales is defined as sales to consumer foodservice outlets that serve the general public in a non-captive environment. Outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semicaptive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. 1) Retail refers to units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. 2) Leisure refers to units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. 3) Travel refers to units located in based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Beyond the scope of the foodservice research are captive foodservice units that serve captive populations around institutions such as hospitals, schools, and prisons. This is also known as institutional sales.

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