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Brazilian Lifestyles 2016: Adapting to the New Normal - Brazil - June 2016

Published By :

Mintel

Published Date : Jun 2016

Category :

Lifestyle

No. of Pages : N/A

As Brazil continues to dive deep into a recession and political upheaval, consumers have had to tighten their budgets, making significant changes to their lifestyles and purchasing habits during the last year. While consumer interest in thrift is high, it also holds opportunities for companies to innovate and adjust to consumers’ new demands.

Table of Content

Overview

What you need to know
Definition

Executive Summary

After the basic, there is not a lot left to half of Brazilians
Figure 1: Financial situation, February 2016
Brazilians are planning purchases more
Figure 2: Lifestyle changes, February 2016
Eating out, technology, and alcoholic drinks: the first to be cut, when times are tough
Figure 3: Spending cuts, February 2016
Internet rises as a tool to search for deals
Figure 4: Interest in thrift, February 2016
What we think

Brazil Today – What You Need to Know

Economic
Inflation skyrocketed in 2015
Jobs continue to suffer major cuts
Brazilians are aging…
and having fewer babies
The rise of alternative families

The Economy

Brazilian economy dives deeper into recession
Figure 5: Change in GDP, Brazil, 2010-15
After reaching a peak, inflation is slowing down
Figure 6: Consumer price index (IPCA), annual change, 2001-15
Figure 7: Consumer price index (IPCA), monthly change, April15-April 2016
Layoffs intensify as the recession progresses
Figure 8: Unemployment rate in moving quarters, Brazil, December 2014-March 2016
Figure 9: Creation of job positions in thousands by month, Brazil, March 2015-March 2016
Personal savings declining
High interest rates continue to limit consumption and credit
Figure 10: Selic prime interest rate, annual %, 2012-16
Consumer’s confidence reaches its lowest level

The People

Age structure
Brazilians are living longer lives
Figure 11: Life expectancy at birth, by gender, brazil, 2000-14
Fertility rate
Figure 12: Fertility rate, Brazil, 2000-15
Figure 13: Birth rate (number of births per thousand habitants), Brazil, 2000-15
Marital status
More marriages and more diversity in marriages
Figure 14: Number of marriage records, Brazil, 2013-14
Graduate degree is a privilege of only 13% of the population

Consumer Expenditure – What You Need to Know

High inflation drives consumer expenditure
OTC and pharmaceuticals: Among the fastest growing markets in the next years
Entertainment and vacations continue to suffer during recession
Opportunities for healthy food in the in-home category
Mixed non-alcoholic drinks could help revamp sales during the recession
The need for convenience drive the household care market
Income drop and tax rise affect the BPC market
Higher US dollar can boost local production of clothes and accessories

Expenditure Overview

Sector breakout
Figure 15: Consumer expenditure, by sector (R$ billion), 2015
Outlook for the next five years
Figure 16: Best- and worst-case forecast total value sales, 2010-20
Winners in the next five years
Figure 17: Fastest-growing market sectors, at current prices, by % growth, 2015-20
Slower-growing sectors in the next five years
Figure 18: Consumer sectors with weaker growth, at current prices, by % growth, 2015-20

In-home Food

What we think
High inflation impacts home food consumption
Figure 19: In-home food market size, by value, Brazil, 2010-15
Brazilians believe that cooking at home helps to save money
Figure 20: Best- and worst-case forecast for in-home food market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Search for health benefits can sustain the consumption of premium foods at home
Economic crisis presents opportunity for companies to offer more in-home food solutions

Eating Out

What we think
Economic scenario may be affecting new investments in the sector
Figure 21: Food service market size, by value, Brazil, 2010-15
Those exploring convenience can benefit even during the crisis
Figure 22: Best- and worst-case forecast for food service market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Although it is decreasing, Brazilians keep eating out habit
Convenience is still a strong motivator to eat out

Non-alcoholic Drinks

What we think
Inflation and new taxation impact the category
Figure 23: Non-alcoholic drinks market size, by value, Brazil, 2010-15
Mixed drinks offer opportunity for the growth of the category
Figure 24: Best- and worst-case forecast for non-alcoholic drinks market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Consumption barriers need to be addressed by the category

Leisure and Entertainment

World Cup 2014 helped to organize cities to host more events
Figure 25: Leisure and entertainment market size, by value, Brazil, 2010-15
Brazilians looking for low-cost leisure options
Figure 26: Best- and worst-case forecast for leisure and entertainment market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Brazilians are spending more on leisure activities out-of-home
Cooking at home can become a leisure activity between friends

Household Care

Domestic workers law can be changing the cleaning habits
Figure 27: Household care products market size, by value, Brazil, 2010-15
Accumulating tasks, Brazilians can buy more efficient products
Figure 28: Best- and worst-case forecast for household care products market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Consumers are spending more with cleaning products

Alcoholic Drinks at Home and On-premise

What we think
Alcoholic drinks at home
Beer is the main cause of value growth
Figure 29: Brazilian alcoholic drinks at home expenditure, 2010-15
Increased taxes on all alcoholic beverages will push value sales up
Figure 30: Best- and worst-case forecast for alcoholic drinks at home expenditure, at current prices, 2010-20

Alcoholic Drinks On-premise

High temperatures, Carnival, and the World Cup helped push sales in the on-premise sector
Figure 31: Brazilian alcoholic drinks on-premise expenditure, 2010-15
Restaurants and bars should promote beverages’ qualities to push sales
Figure 32: Best- and worst-case forecast for alcoholic drinks on-premise expenditure, at current prices, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Consumers cut spending on alcoholic beverages in tough times
Beer presents the highest consumption among alcoholic drinks
Perceptions of premium products

Transport

What we think
The transport market has seen robust growth
Figure 33: Brazilian transport expenditure, 2010-15
Uncertainties in the economy are highly affecting the sales of new cars
Figure 34: Best- and worst-case forecast for transport expenditure, at current prices, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Price and worries about the environment are key for the electric car sector
Companies should help consumers alleviate traffic issues

Technology and Communications

What we think
The technology and communications market has benefited from a tax break
Figure 35: Brazilian technology and communications expenditure, 2010-15
Consumers are likely to take longer to exchange old products, slowing growth
Figure 36: Best- and worst-case forecast for technology and communications expenditure, at current prices, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Consumers have deprioritized spending on technology
Use of instant messaging apps is popular among Brazilians
E-commerce still needs improvement

Personal Finance and Housing

What we think
Increased taxes and utility bills boosted growth
Figure 37: Brazilian personal finance and housing expenditure, 2010-15
Higher interest rates will drive future growth
Figure 38: Best- and worst-case forecast for personal finance and housing expenditure, at current prices, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Consumers are getting savvier
Rise in utility bills is one of the main reasons leading to changes in purchasing habits
Consumers are relying more on credit cards

Beauty and Personal Care

What we think
Strong market slowdown marks 2015
Figure 39: Retail sales of beauty and personal care products in Brazil, by value, 2010-15
The market will keep growing in a moderate path
Figure 40: Best- and worst-case forecast for beauty and personal care, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Brazilians have been spending less with cosmetics since 2015
‘Do It Yourself’ can be a way out for consumers in times of crisis

OTC and Pharmaceuticals

What we think
Increased pollution levels and aging population contribute to the retail sales of pharmaceutical products
Figure 41: Retail sales of OTC and prescription medicines in Brazil, by value, 2010-15
Pharmaceutical industry can benefit from diseases such as swine flu
Figure 42: Best- and worst-case forecast for OTC and prescription medicines, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Elderly people contribute to the sales of prescription medicines
Internet can be an option to buy cheaper medicines

Home and Garden

What we think
Home appliances sector was one of the most affected by the recession
Figure 43: Retail sales of home and garden products in Brazil, by value, 2010-15
Rising prices of steel can complicate sales of home and garden items
Figure 44: Best- and worst-case forecast for home and garden items, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Brands can do online promotions to avoid stagnation
Sharing home appliances can be an opportunity for singles

Clothing and Accessories

What we think
Clothing and accessories sector suffers with the crisis
Figure 45: Retail sales of clothing and accessories in Brazil, by value, 2010-15
Brands must take advantage from a higher US dollar and the imports fall
Figure 46: Best- and worst-case forecast for clothing and accessories, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Brazilians are buying less clothing, accessories, and footwear
Brands could target single consumers and do promotions

Vacations

What we think
Economic instability makes consumers postpone travels
Figure 47: Retail sales of the vacations market in Brazil, by value, 2010-15
Higher US dollar will keep affecting airlines in 2016
Figure 48: Best- and worst-case forecast for the vacations market, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Brazilians are trying to spend less with travels
Family travel packages could boost tourism in Brazil

Miscellaneous Expenditure

What we think
Spending on education and private health are reduced
Figure 49: Retail sales of the miscellaneous expenditure sector in Brazil, by value, 2010-15
Unemployment will keep affecting the health sector
Figure 50: Best- and worst-case forecast for miscellaneous expenditure, at current prices, Brazil, 2010-20
Winners for 2016
Losers for 2016
Key consumer findings
Lower income leads consumers to do more services by their own
Distance learning encourages the Brazilian population

The Consumer – What You Need to Know

The recession is making the gender gap more evident
Consumers over 55 are more likely to have a tight financial situation
Cooking at home: an alternative for many to save
Health and house cleaning products the least likely to be cut
Reusable packaging is more appealing to young consumers
The recession creates opportunities for private labels

Current Financial Situation

After the basics, there is not a lot left for half of Brazilians
Figure 51: Financial situation, February 2016
North-East the least likely to be healthy, most likely to be tight
Figure 52: Financial situation, by region, February 2016
Men have a better financial situation than women
Figure 53: Financial situation, by gender, February 2016
Consumers over 55: the most likely to have a tight financial situation
Figure 54: Healthy and tight financial situation, by age group, February 2016

Lifestyle Changes

Brazilians are planning more of their purchases
Figure 55: Lifestyle changes, February 2016
DIY: More common in the South and South-East
Figure 56: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber)” by region, February 2016
Figure 57: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber),” by gender, February 2016
Consumers aged 25-34: cooking more at home to save
Figure 58: Agreement with the statement “I try to cook more at home instead of eating out,” by age group, February 2016
Free activities are attracting more ABC1
Figure 59: Agreement with the statement “I choose to do more free activities rather than paid for ones (eg exercise in park versus gym),” by socioeconomic group, February 2016
Installment payments are becoming less popular

Spending Cuts

Eating out, technology, and alcoholic drinks: the first to be cut, when times are though
Figure 60: Spending cuts, February 2016
Cleaning and health products the least likely to be cut
Southern consumers: The most likely to cut premium food
Figure 61: Spending cuts, premium food, by region, February 2016

Interest in Thrift

Internet rises as a tool to search for deals
Figure 62: Interest in thrift, February 2016
Reusable packaging is more appealing to young consumers
Figure 63: Agreement with the statement “Buying products with reusable packaging,” by age group, February 2016
Young males also more likely to buy used appliances
Figure 64: Agreement with the statement “Buying used appliances rather than brand new ones,” by gender and age group, February 2016
The need to save provides opportunities for private label products
Sharing services more likely to be seen as an alternative for ABs to save
Figure 65: Agreement with the statement “Sharing services such as carpooling,” by socioeconomic group, February 2016

Appendix – Methodology, Abbreviations, and Supporting Information

Methodology
Fan chart forecast
Abbreviations

Appendix – Expenditure Overview

Figure 66: Best- and worst-case forecast for total consumer expenditure, 2015-20

Appendix – In-home Food

Figure 67: Best- and worst-case forecast for in-home food, 2015-20

Appendix – Foodservice

Figure 68: Best- and worst-case forecast for foodservice, 2015-20

Appendix – Non-alcoholic Drinks

Figure 69: Best- and worst-case forecast for non-alcoholic drinks, 2015-20

Appendix – Alcoholic Drinks

Figure 70: Best- and worst-case forecast for alcoholic drinks at home, 2015-20
Figure 71: Best- and worst-case forecast for alcoholic drinks on-premise, 2015-20

Appendix – Beauty and Personal Care

Figure 72: Best- and worst-case forecast for beauty and personal care, 2015-20

Appendix – OTC and Pharmaceuticals

Figure 73: Best- and worst-case forecast for OTC and pharmaceuticals, 2015-20

Appendix – Clothing and Accessories

Figure 74: Best- and worst-case forecast for clothing and accessories, 2015-20

Appendix – Household Care

Figure 75: Best- and worst-case forecast for household care, 2015-20

Appendix – Technology and Communications

Figure 76: Best- and worst-case forecast for technology and communications, 2015-20

Appendix – Leisure and Entertainment

Figure 77: Best- and worst-case forecast for leisure and entertainment, 2015-20

Appendix – Home and Garden

Figure 78: Best- and worst-case forecast for home and garden, 2015-20

Appendix – Transport

Figure 79: Best- and worst-case forecast for transport, 2015-20

Appendix – Holidays

Figure 80: Best- and worst-case forecast for holidays, 2015-20

Appendix – Personal Finance and Housing

Figure 81: Best- and worst-case forecast for personal finance, 2015-20

Appendix – Miscellaneous Expenditure

Figure 82: Best- and worst-case forecast for miscellaneous expenditure, 2015-20

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