Brazil Retail Foods

Brazil Retail Foods

Report Highlights

The Brazilian economy increased by 4.3 percent after a domestic and global demand rebound in 2021. The gross domestic product reached US$1.6 trillion. However, rising inflation and the slow labor market recovery in 2022 have affected purchasing power and expectations of the post-pandemic future. The retail industry maintained steady growth in this scenario, amounting to US$112.3 billion. Nevertheless, Brazil's import of consumer-oriented products grew 4.3 percent in 2021, despite the 13.2 percent devaluation of the Real.

Executive Summary
After a sharp decline of 4.1 percent in 2020 due to the pandemic’s hit, the Brazilian economy expanded 4.6 percent in 2021, reaching US$1.6 trillion. With the phasing out of measures implemented to contain COVID-19, stronger economic activity, and higher contribution from global demand, Brazil achieved some economic relief. Nevertheless, tighter fiscal and monetary conditions weigh on Brazil’s performance in 2022. Brazil ended 2021 with double-digit inflation eroding households’ buying power, reinforcing the expectation for lower growth in 2022.

Imports of Consumer-Oriented Products
In 2021, imports of consumer-oriented products by Brazil reached US$4.3 billion, a four percent increase compared to the previous year. The United States maintained its position of 5th major supplier, with a five percent market share. On the other hand, European countries, direct competitors to the United States, gained two percentage points of market share, accounting for 32 percent of the market. Both are positioned at a higher price level and offer products with similar quality and standards; therefore, it is plausible that U.S. companies have considerable room to grow in the Brazilian market.

Food Processing Industry
In 2021, the food processing industry registered annual sales of US$171 billion. About 37,200 companies represent the sector, and food and beverage respond for 81 and 19 percent of total sales, respectively. The major segments of the industry are meats, beverages, dairy, tea, coffee, cereals, oils and fats, sugar, snacks, ice cream, condiments, yeast, wheat products, processed fruits and vegetables, dehydrated and frozen products, chocolate, candy, and fish.

Food Retail Industry
The Brazilian Supermarket Association (ABRAS) reported supermarket revenues at US$113.2 billion in 2021. Brazil’s retail sector includes 92,588 stores and serves 28 million consumers daily. The Southeastern region of Brazil has the lion’s share of the retail industry, with 51 percent of the market. In 2021, the cash-and-carry continued to be the predominant business model for the largest retail groups, as Brazilian consumers are still very price sensitive.