While in early 2017 manufacturers suffered from operating at lower capacities and high stocks due to low demand, the mild reheating of the economy seen in the second half of the year helped compensate for the earlier losses. Subsequently, food prices deflated in 2018, especially for shelf stable products like jams and preserves.
The improved distribution of the major player has helped chocolate spreads post significant growth. This continued in 2018, but with a few additional factors that helped sustain the success of chocolate spreads.
The global trend towards healthy eating has increasingly shaped Brazilian consumption habits. One of the new favourites of fitness bloggers and nutritionists is nut butter, due to its high protein and good fats content.
The owner of popular, ubiquitous Queensberry jams and preserves is achieving further share growth due to an improved distribution strategy, but mostly due to rebranding and a stronger portfolio with more flavours. To differentiate itself from generic competitors, which have developed similar-looking products with lower price points due to containing less fruit, its original packaging has been substituted by a colourful and creative package design that shows the raw fruit.
The dominant player in chocolate spreads, Ferrero do Brasil Indústria Doceira e Alimentar Ltda, has established growth through improving its distribution, which is usually a challenge for foreign players when entering Brazil due to the size of the country as well as the strength of the retail chains in bargaining for price. While this is projected to continue improving in 2018, other factors also contribute to Ferrero’s growth of Nutella.
While seeing growth overall, nut and seed based spreads remains highly fragmented when looking at specific companies. This is the case because most consumers of nut and seed based spreads are already predisposed to avoid highly industrialised products and prefer minimalistic, wholesome foods that support local producers.
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This industry report originates from Passport, our Packaged Food market research database.