Amid elevated prices and a stronger consumer focus on affordability, a more value favourable retail environment is driving the growth of private label packaged foods across Latin America. Retailers are expanding assortments, better understanding consumer needs, and partnering with quality suppliers. This report explores how private label manufacturers and retailers are competing in this evolving market, focusing on key categories, regional trends, and strategic marketing initiatives.
This report comes in PPT.
The challenging macroeconomic environment for consumers and the rise of discounters, convenience stores, and warehouse clubs, along with the decline of traditional channels and the growing professionalisation of private label management by retailers, are all contributing to the increasing value share of private label in packaged food categories across Latin America.
Private label products are experiencing strong growth and expansion in the region, both in value share and in product variety, value proposition, and functionality. However, significant differences exist in the value share across countries, closely linked to each country’s channel environment and consumer habits.
The private label portfolio varies considerably among retailers. For example, while discounters typically have a different private label for each category, mimicking the category leader, supermarkets, hypermarkets, warehouse clubs, and convenience stores often have either a single private label or one for each price segment or specific food groups.
Private label penetration varies significantly by category. It is strong in basic and essential categories, such as canned tuna, shelf stable vegetables, oil, milk, and rice, and weak in indulgence categories (such as confectionery) and categories in which trust matters most like baby food. In any case, private label products are increasingly expanding into more categories.
There is a growth opportunity in Brazil, the largest economy in Latin America. The long-standing perception of private label as low quality, combined with the limited presence of private label in key channels like warehouse clubs Atacadão and Assaí, along with the limited number of discounters, keeps private label’s value share much lower than in other Latin American countries.
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