Recession-hit Brazilians shift to own label products

Brazil’s recession, Brazil’s fall from grace…the international press surely has not been kind when reporting about Brazil. The Economist labelled the Brazilian crisis as “irredeemable, which is not surprising to me, as the American magazine seems to have anti-Dilma attitude from day one! Other more optimistic publication, say that president Dilma Roussef has promised to kick-start the country’s economy by appointing a new finance minister.

Surely, Brazilians are very adaptable, coming from a rather economically unstable few decades (hyperinflation, economic stagnation). However, how does the recent crisis is affecting how Brazilians do their grocery shopping?

A research from dumnhumby mapped the shopping habits of 22 million Brazilians since 2013, analysing how much and how frequent they shop: their conclusion was that Brazilians have adopted a ‘save & splurge’ attitude, meaning that they would try to save in staple products without giving up little luxuries / treats.

Interestingly, Brazilians are also turning to supermarket own label brands (aka private labels) which are between 5% and 30% cheaper than the equivalent branded – and unlike Europe, own label products have not been popular in Latin America and neither in Brazil.

Companhia Brasileira de Distribuição (CBD), formerly known as Grupo Pão de Açúcar, the biggest Brazilian company engaged in business retailing of food, stated in a recent article that 11% of their total sales are coming from their own label products, five years ago this percentage would stay between 5% and 6%. In some categories like milk, coffee, savoury snacks and personal hygiene products the percentage of own label sales can reach 20%.

There is not only a clear shift to own label but Brazilian consumers are constantly seeking value for money in other ways. The supermarket comparison site Tiendeo Brasil, conducted a study in 2014 that came to confirm this trend among the Brazilian consumers: 50% said they started buying own label products, 67% have opted for smaller sized packs or packs on special offer and 67% decided to buy products on special offer in bulk to stock it up.

supermarket

Source: Tiendeo Brasil

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