Latin American families want to continue enjoying the same products they are used to having at home, so they’re beginning to react to the incessant price increases seen across the region.
As in other areas of the globe, economic pressures are having a marked effect. Inflation has reached 9.6% – an all-time high – and this is significantly affecting the price of FMCG products. The cost of Food – the basket that is most representative of households’ expenditures, being essential to everyone – rose almost 12% in 2021. This has resulted in a change in consumer behavior in some countries, including Brazil, with a reduction in the volume of goods purchased.
Saving money is a necessity
Analysis of consumer data from April 2022 proves that people are concerned about their financial situation, and the only way out is to plan their shopping carefully. Buying larger packs is the favored strategy in Colombia, while shoppers in Brazil seek out promotions, and Mexicans visit more points of sale looking for cheaper options.
Among the levers that consumers in Latam are applying to save money is the maximizing of shopping trips. While 86% of FMCG categories are growing in terms of spend per trip, the total number of trips is reducing. This means that brands must take advantage of each visit shoppers make to stores in order to hook them in. Promotions is one tool that will help to generate both greater frequency and spend.
There’s also room for growth
Ensuring that a category or brand remains relevant by making it affordable is key. The premium brand Pringles has achieved success here in Latam, showing that it’s possible to reposition yourself by investing in a value-for-money perception.
Now, more than ever, brands and retailers need a better understanding of the needs of the changing Latam buyer. Our latest 10 slides to make you think… focuses on pricing, and how clients can position themselves to win over consumers as they endeavor to balance their income with high inflation. If you want to delve further into the impact of rising FMCG prices on your business, you can download the full report or talk to our expert team.
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