Sweets Market in Brazil
Sweets are one of the most popular types of food consumed around the world, making this a very promising sector. As this is true in Brazil, let us take a look at the sweet market in Brazil. In this article, we will cover information regarding candy, gum and peanut sweets, excluding chocolate.
Sweets Consumption
A report published by ABICAB, which is the Brazilian Association of Chocolate, Cocoa, Peanut, Candy and Derivatives and based on data by Nielsen, shows that sweet consumption in Brazil is ranked 14th worldwide, with every Brazilian consuming an average of 2,6 kg of sweets every year. When comparing Brazilian consumption to the world’s leading country - Sweden, with 7,6 kg per year per person - there is plenty of space for this market’s growth.
Market Size
The sweet market in Brazil amounted to around BRL 12 billion in 2013. It is quite an impressive performance, considering that this market amounted to only BRL 8 billion in 2007. A report by Mintel estimated a growth in this market of around 6% until 2017, when it is expected to amount to more than BRL 14 billion.
As to sweet production, more than 533.000 of tons were produced in 2013, a growth of 12% from the production in 2012.
Despite these promising estimates, a slowdown may be coming, since an increase in the cost of raw materials such as sugar, will surely impact prices, raising the overall cost. However, this may be useful to a market that has generally been non-innovative in the last few years, since this growth in raw material prices will push for product reformulation, involving the development of items with more taste appeal.
Prices of sweets are also increasing at an annual rate of around 5%. However, care is needed when addressing this data, as inflation is a major factor in the increase in value sales in Brazil, with data showing Brazil’s IPCA consumer price index - the most used inflation index for families earning from one to 40 minimum wages in Brazil - rising 6,4% in 2013.
Main Players
Among the main players in this market, it is necessary to mention:
- Mondelez International - dominating the gum market with Trident, Buballoo and Chiclets
- Dori Alimentos - the only Brazilian company to be prominent in the sweets market, in various areas
- Perfetti Van Melle - owning important brands such as Mentos and Fruittella
Exports and Imports of Sweets
Brazilian exports of sweets amounted to almost USD 170 million in 2013. Although Brazilian sweets are quite popular around the world, especially for their premium quality and unique flavours, a trend since 2004 has seen the stagnation of these exports. Although the revenue of these exports has oscillated at around USD 170 million since 2004, there has been a decrease in export revenues of 6% from 2012 to 2013.
The region that imports the most sweets from Brazil is Latin America, with it absorbing 52% of all Brazilian sweet exports. Inside Latin America, the countries that imported the largest amount of this product from Brazil are:
- Argentina - 31%
- Chile - 19%
- Uruguay - 15%
It is important to mention that Argentina is the world’s leading importer of Brazilian sweets, absorbing more than 16% of all Brazilian exports of these goods.
In terms of individual countries, the United States are the second largest importer of Brazilian sweets. The North American region absorbs 16% of all Brazilian sweet exports, and the United States are accountable for 94% of it, which leaves them with a little more than 15% of all Brazilian sweet exports.
Sweets Brazil, a partnership between ABICAB and Apex, the Brazilian Trade and Investment Promotion Agency which was created in 1998 in order to boost Brazilian exports of sweets. In its strategic planning for the Internationalization of the Confectionery Market 2014-2016, Sweets Brazil will give priority to trading with the following markets:
- United States of America
- Canada
- Saudi Arabia
- South Korea
- Russia
- Japan
- South Africa
On the other hand, the import of sweets in Brazil amounted to only USD 40 million in 2013. Opposed to exports, Brazilian imports of sweets have grown impressively since 2004, when they accounted for around USD 9 million. Once again, the most important business partners of these goods are Latin America, with Argentina accounting for 28% and Ecuador with 17% of all sweet imports in Brazil.
Peculiarities of the Brazilian sweet market
In Brazil, there is a peak in sweets sales between September and October, due to two public celebrations:
- Day of São Cosme e São Damião, on September 27, when Catholic tradition says that people of Catholic faith should hand out sweets
- Children’s day, on October 12, when children are given sweets and other gifts
According to the Mintel report, 50% of all Brazilian consumers would buy more sweets if there were more sugar-free options, while 66% of them prefer sweets made with natural fruits. Considering the diversity of fruits available in Brazil, the market for innovation in this area indicates good potential for growth.
In fact, new product releases in the sweets market in Brazil grew an astounding 30% between 2007 and 2013, while in the United States there was a decrease of around 35% in the same period. The increasing demand for healthier options, such as real fruit-flavoured sweets and the increase in raw material prices in this period might be the main contributor to these innovations.
While most innovations are made by smaller producers in order to earn their space in the overly concentrated Brazilian sweets market, some of the most successful ones end up being adopted by the main players. This is true especially when considering the release of products flavoured with fruits from the North and Northeastern region of the country.