The Brazilian Hot Drinks Market: What Consumers Drink and Why?




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Product Synopsis

This report provides the results for the Hot Drinks market in Brazil from Canadean's unique, highly detailed study of consumers' Consumer Packaged Goods (CPG) consumption habits, and forms part of an overall series covering all CPG product markets. Its coverage includes, but is not limited to, consumption behaviors, the extent to which consumer trends influence their consumption, the value of the market these trends influence, and brand and private label choices as well as organized retailer choices. Much of this information can also be analyzed by specific consumer groups, providing hard and fast data on consumers and markets at the product category level.

Introduction and Landscape

Why was the report written?

Marketers in the Hot Drinks market face a major challenge. Understanding market size and segmentation is valuable, but the key to effective targeting is knowing just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends. This data report solves these problems by providing survey-based data on consumer trends and consumer groups, and market data that shows the exact size of consumer groups, how much of the Hot Drinks market they account for, and which consumer trends drive their behavior.

What is the current market landscape and what is changing?

As consumer confidence increases proportionally to economic recovery, consumer trends will be directly affected. Since the global financial crisis of 2008-2009 the organized retail market has been characterized by an increase in the amount of discounted and own-brand products. Coffee, Tea, and Other Hot Drinks are not considered essential items and therefore consumption patterns have been negatively affected. As economic and market recovery continues over 2012, consumption patterns will record a positive trend in both the Medium and Heavy frequency bands and the amount of Non-users should decrease.

What are the key drivers behind recent market changes?

Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. The survey-based data provided in this report examines over 20 consumer trends that affect the market and examines the share of consumption across 26 consumer groups. This data provides a detailed insight into exactly who the consumer is and just how much impact the latest consumer trends are having.

What makes this report unique and essential to read?

The data provided is unique in the market as it tracks consumer behavior through to its actual value impact on a product market. This provides readers with a unique data analysis of the market, allowing marketing tactics and strategy to be updated in line with the very latest consumer behaviors.

Key Features and Benefits

  • Consumer data, based upon proprietary surveys and then consumer group tracking and modeling for the following specific categories: Coffee, Tea, and Other Hot Drinks.
  • Detailed consumer segmentation covering over 26 consumer groups, 20 consumer trends, and consumption frequency for each product category.
  • Consumer penetration for brands and private labels, based upon the original survey and then subsequent consumer tracking and modeling.
  • Unique retailer choice data at the product category level in organized sector, based upon the original survey and then subsequent consumer tracking and modeling.

Key Market Issues

  • Consumption frequency analysis reveals that tea is yet to emerge as a popular drink among the majority of Brazilians. This is evident from the low incidence of Heavy-frequency users, less than 20%in the Brazilian tea market. This suggests that marketing planners will be more inclined towards the coffee market in Brazil.
  • Consumer segmentation analysis reveals that urban dwellers account for more than 98% of the hot drinks market in value terms in Brazil. As such, Hot Drinks producers should pay special attention to the specific trends and factors affecting Brazil's urban population.
  • Organized retailer sales analysis reveals that Brazil's Hot Drinks market is dominated by the country's top three organized retailers, which together account for 49% of the country's total sales in volume terms. Notably, only one-third of the sales are through small stores, making the barrier to entry in the market high.

Key Highlights

  • Economic prosperity in Brazil has resulted in the upward mobility of a sizeable section of lower middle class population and has also contributed to growth in the levels of coffee consumption. As a result, the share of middle class consumers has increased.
  • Brand analysis reveals that private labels have less than 15% penetration in the overall Hot Drinks market in Brazil. This indicates that consumers have a strong preference for branded beverages products.
  • Consumer survey results indicate that the increased pace of modern life and the rise of the new middle class in Brazil have contributed to a steep increase in the demand for instant hot drinks, especially Coffee. Moreover, consumers often look to Hot Drinks consumption as a self-reflective expression of their personality.