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As inflation begins to bite, budget-conscious consumers in Latin America are looking for food and drink products that offer value for money – but sustainability concerns are still there so brands need to show how good-for-the-planet and budget can go together, says Mintel. The global food supply chain has been rocked in recent years, first by the Covid-19 pandemic and more recently by Russia’s invasion of Ukraine which has halted wheat and sunflower seed exports from Ukraine – one of the world’s major expferric pyrophosphate vitamin c b12orting countries for these commodities. Subsequent export bans by major commodity-producing countries such as Indonesia, which announced a ban on palm oil exports (lifted in May due to improved domestic supplies), and India for wheat, following a severe drought that affected its harvest.In May, international wheat prices rose for a fourth consecutive month, up 5.6% – only 11% below the record high reached in March 2008, according to the May FAO Food Price Index by the Food and Agriculture Organization (FAO).While Latin American economies are no stranger to price volatility and social inequalities, the current financial and supply chain crises are putting even more consumers at risk of hardship, according to International Monetary Fund (IMF) analysts.“For a region with historically high levels of inequality, the erosion of real incomes due to the soaring cost of food and energy will only add to the economic strains faced by vulnerable households in the region,” they wrote in April this year, when inflation in Latin America’s largest economies hit the highest levels in 15 years. “And […] low-income households were already the most affected by the economic consequences of the pandemic.”Recent research by Mintel shows that 30% of consumers in Brazil say that their financial situation is “tight”, followed by 28% in Chile, 24% in Argentina and 21% in Mexico while 15% of Colombians say they are “struggling”.This has implications for food and drink brands in the region, says Graciana Méndez, senior regional insights analyst for Latin America at Mintel.“Price sensitivity will remain a longer-term effect in Latin America. Companies will need to be more detailed about the ingredients, processes and corporate social responsibility (CSR) commitments that contribute to a product&39;s price,” she wrote in a Mintel analysis entitled ‘COVID-19 two years later: value in LATAM’.“Bsangobion ferrous gluconaterands that deliver value for money and operate responsibly will resonate more with consumers in 2022. Recessions focus people on their own needs, but COVID-19 has sensitized people to the needs of others less fortunate than themselves.”Large numbers of consumers surveyed by Mintel – 44% of Brazilians and 42% of Peruvians, for example – said they would remain loyal to brands that were transparent when it came to explaining price rises.Nevertheless, switching from usual brands to find cheaper products was the preferred strategy for around one-quarter – rover the counter ferrous gluconateanging between 23 and 27% – of respondents from all six countries included in the survey (Brazil, Mexico, Chile, Argentina, Colombia, and Peru).Premium positioned brands could iron gluconate pillstherefore see their sales drop as consumers cut back on treats. Forty-two percent of Brazilians and Peruvians said they would spend less on premium treats like gourmet coffees and sweets while 45% of Mexicans said they would spend less on eating out at restaurants or cafesMeat is prominent in Latin American cuisine and meat alternatives could become more attractive as the cost of meat surges. Positioning iron ferrous sulfate ivplant-based meat products as a nutritious and cost-efficient alternative or blending meat and animal proteins could be winning strategies in this respect, says Méndez.Ecuadorian brand Mr Cook launched chicken nuggets with added quinoa and chia as a plant-based source of protein, for instance, while Argentinian retailer Dia launched a plant-based milanesa, a breaded meat cutlet hugely popular in Argentina, made with soy and spinach.“After two unprecedented years, inflation, rising living costs and surging food prices are driving consumers to seek value in different shapes and forms,” concludes Méndez. “More explicit communication about what a product price entails has become an expectation. Brands that embrace price transparency while delivering value for money and operating responsibly will be top of mind.”
Value with values: Sustainable products must be affordable for Latin Americans
