A number of Latin American countries have been grappling with economic problems in recent years, with inflation still raging in Argentina in 2024, for example, negatively impacting the hot drinks performance in this country. Overall, this meant that the regional hot drinks market was stagnating in retail volume terms in 2024, despite positive growth being seen in Brazil. As inflation eases across Latin America, positive volume and value growth is expected from 2025.
This report comes in PPT.
After a very difficult time for the local economy in 2024, which negatively impacted hot drinks sales in this year, Argentina is expected to be seeing better prospects in the coming years as President Milei’s efforts to reduce inflation come to fruition. However, many consumers are still expected to remain relatively price-sensitive, which could benefit retailers’ private label lines.
Distribution is generally split between modern grocery retailers, like supermarkets and hypermarkets, and small local grocers, with the former leading in Brazil, the biggest country market in the region, and the latter in Mexico, the next biggest. However, both of these countries have only 1-2% shares for e-commerce, with the regional high in Colombia only reaching 8%.
Yerba mate remains a popular product in some countries in the region: notably Uruguay, Paraguay and Argentina, which have the three highest per capita consumption rates for this product globally. However, they also tend to be mature markets, so that players will need to increasingly highlight the potentially healthy and functional properties of yerba mate.
Tea consumption in Brazil is predominantly fuelled by consumers seeking health and wellness benefits, rather than it being a traditional hot beverage choice, which is expected to help drive strong growth for fruit/herbal tea in this country over 2024-2029. The stress and anxiety of the pandemic also saw products such as chamomile tea benefit for their calming properties.
A number of countries in Latin America have introduced some kind of labelling law for food and beverage products containing high levels of fat, salt or sugar. However, as they have mostly been in place for a few years now, reformulations have generally been seen in other hot drinks to cut products’ sugar content.
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