Yoghurt and Sour Milk Products in Brazil

PROSPECTS

Effects of the economic recession are still being felt

Yoghurt (as sour milk products are negligible in Brazil) is one of the categories that has suffered most due to the economic crisis that has affected Brazil since 2014. High unemployment rates, lower disposable incomes and a political crisis all contributed to limited consumer spending.

A few yoghurt categories gain modest traction due to promotions and innovation

Whilst the crisis years reduced consumption of yoghurt across all categories, the modest signs of economic recovery were seen in the second half of 2017 as well as intensifying health and wellness trends allowed yoghurt categories to post slight growth rates in 2018. Very frequent promotions, such as buy-1-get-1-free and price discounts, were strategies that worked for the category.

Strategy of changing consumption moments proves to be successful yet challenging

Yoghurt players in Brazil currently face the challenge that yoghurt is almost exclusively consumed as a snack, usually in the afternoon. This exclusive consumption occasion limits purchase frequency as well as places yoghurt in direct competition with other prominent snacks like fresh fruits and juices, Polenguinho cheese squares, and even fruit and nut bars.

COMPETITIVE LANDSCAPE

Competitors follow Coca-Cola Co’s Verde Campo Natural Whey in protein frenzy

Innovations in yoghurt are expected to drive category growth higher over the forecast period, particularly because manufacturers are capitalising on another increasingly popular yoghurt consumption occasion – by fitness enthusiasts as a nutritious, on-the-go post-workout snacking option for this specific consumer segment. The pioneer product is Verde Campo (owned by Coca-Cola Co) Natural Whey; it is a drinking yoghurt with at least 14g of protein per pack (from whey protein) in either portable plastic bottles or single-serve cartons, made with lactose-free milk and sweetened with stevia.

Groupe Danone continues to lead

For years, Danone brands have been the most widely consumed across several income levels. Brands like Paulista and Activia are staple household names, and the leader maintains a comfortable position across categories.

Smaller players enter skyr yoghurt and increase share of “others”

In 2017 yoghurt brand Moo launched the first skyr-type yoghurt in the country. The tiny, independent start-up-like manufacturer was able to enter major retail chains like Pão de Açúcar in the same year, proving that a very premium product with high added value can find its way to niche consumers, even during uncertain economic times.

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