Fast Moving
Consumer Goods

For more than a decade, InfoAmericas has advised its clients in all areas of the Fast Moving Consumer Goods sector including:

• Food production
• Packaged food and beverages
• Cosmetics, beauty & health care products
• Household supplies (cleaning, hardware)
• Consumer electronics & accessories

Challenges

In today’s market, the exports of FMCG products into Latin America still face protective barriers in approximately half of the region.

• The lack of regional integration denies large FMCG producers the necessary economy of scale in all but four or five of the region’s economies.

• Consolidated retail environments in some markets empower the largest retailers with enormous negotiating power, pushing down vendor margins.

• In spite of consolidating retail channels, distribution systems remain very fragmented and costly, particularly when distributing product to 2nd and 3rd tier cities. Furthermore, temperature controlled distribution infrastructure is limited.

• Local B brands that compete on price and store level promotion are stealing share from established multinational brands and forcing them to rethink pricing, distribution and promotional strategies.

• The volatility of currencies makes it difficult to sustain exports of consumer goods to most of the region, forcing suppliers to invest in local production facilities.

• The relatively small middle class segment (8-20% of the market) limits what value added FMCG products can realistically be imported by Latin American markets.

• In spite of the commonality of language and history, food preferences vary from country to country, limiting the scale of processed food sales at regional level.

Opportunities

• The foreign takeover of the retailing industry in Latin America’s largest cities has opened the door for many global consumer goods suppliers. The growth of Wal-Mart and other foreign retailer chains into 2nd tier cities will continue to simplify the export process for global FMCG companies who might otherwise shy away from these markets.

• Maturing demographics, rising urbanization, dual income households help explain why Latin Americans continue to abandon the tradition of home cooked meals in exchange for fast food and convenient prepared foods. The trend is expected to accelerate over the next decade.

• The recent appreciation of most regional currencies on the wave of rising commodity exports, bodes well for the consumption of non-essential consumer products such as beauty products, premium food and liquors, & consumer electronics.

• The growth of B brands offers cash laden multinationals the opportunity to purchase market share through the take over of these companies, establishing a dual brand approach to service both the mass market and middle class market.

• The Southern Cone’s efficient food producers are expanding rapidly thanks to record global pricing, offering opportunities for food technology suppliers.

• Central America (incl. Mexico) and the Caribbean import a relatively high percentage of their FMCG needs and their impressive per Capita wealth growth in recent years bodes well for further increases in coming years.

• As several Latin American economies struggle for recovery, the impressive growth of US Hispanic population and its purchasing power in the last decade represents real opportunity for Hispanic food manufacturers either US or Latin American based.