Favorable Scenario

In 2007, industry invoicing reached US$ 118,4 bi, 10,6% nominal growth as compared to 2006

 

Year 2007 came to an end with a positive scenario: controlled inflation, credit facilities, industrial production, average income increase and lesser unemployment rate. All these factors allowed consumers to have greater access to durable consumer goods and services and, in mass consumption, tried up categories as soy and yoghurt-based drinks.

“Income increase, however, was compromised with installments of durable consumer goods, pressing food sale by replacement of brands and products and freezing of expenses”, explained Denis Ribeiro, director of Abia economic department. In the major metropolitan regions, monthly average income grew 4.6%, unemployment rate fell 7,4% and registered workers share increased 6,5%.

Positive economic scenario was followed by 27,3% increase of credit volume as compared to 2006. The effects of such conjuncture were reflected in the retail, which presented the best result of last three years with 9,2% increment.

Retail growth above industrial production may be understood in part by imports which helped to meet the internal demand. Real favorable exchange rate ($ 1,79) contributed to imported increase. Trade balance fell 13%, however exports exceeded the imports.

The current picture of income increase shows that low price brands were kept strong, but intermediate and high price brands gained space. In accordance with Nielsen survey, high price brands of Non Alcoholic Beverages category reached 40% share in basic consumer products sales. Salty Groceries and Perishable prominence was for intermediate price products, which represented 44.8% and 36.7% in total of basic consumer products.

Breaking down per region indicates that Greater São Paulo and Greater Rio were in evidence, growing 6% and 5.4% respectively. Mid-west region was also in evidence, region which achieved positive performance for all basic consumer products.

After growth sequence in the past years, small food retail seemed steady. Small and medium supermarkets achieved positive performance in almost all basic consumer products and hypermarkets showed retraction, drops in all categories, except for Non Alcoholic Drinks.

Alcoholic beverages achieved the highest growth in 2007 (+7,1%), which also increased its share in basic consumer products invoicing from 19,5% to 20,3%, audited by Nielsen. Despite price increase, it is evidenced Beers growth (+7,4%), Brandy (+5,2%) and Whiskey (+7,5%). Alcoholic Sodas category dropped 6,1%, contributing to 31,2% increment in volume and 23.2% in value.

Ice cream category stood out, achieving 17,4% variation in volume and 13% in value. Cold cuts of meat category also had good performance with 8,9% increase. Frozen Meat, Leavened Milk and Frozen Pizza grew 9.3%, 8.8% and 7,9%. Yoghurts, increased 3,5%, confirming the trend of consumer greater access to categories considered superfluous. Almost a million of households which did not buy the category in 2006, started buying in 2007. Low price brands stood out, representing 40% of category volume.

Non Alcoholic Drink also registered significant growth (5,6%), mainly encouraged by good Soft Drinks sales (5,2%) and great sales increment of Energetic Drinks (29,5%) and Soy-based Drinks (24,3%). Soft Drinks and Soy-based Drinks presented increase in average amount bought, during the year, at high and medium income level households in 10 and 1 liter respectively. Soft Drinks, more than 600 thousand households did not buy in 2006 and started buying in 2007. The hit was Diet/Light items, which already represent 10% of category volume. Soy-based Drinks category increased 19% among purchasing households.

Sweet Groceries kept the same 2006 volume levels (-0.3%). Dairy products category were under the impact of production price increase (Aseptic Milk +17,2%, Skimmed Milk +10,7% and Condensed Milk +5%), affecting sales performance. Chocolates category stood out, increasing 4,1% in volume and 6,5% in value.

Salty Groceries products also achieved stability (+0,6%), due to retraction in commodities: Wheat flour (-10,4%), 12,3% increase in prices; Oil/Olive oil (-2,1%), 9,4% increase in prices; and Rice (-1,2%) 5,3% increase in prices. Rising categories are: Tomato Sauce (10,2%) – being 3,7% fall in prices; Industrialized bread (+6,8%) and Solid Salt Savors (+5,9%).