LATIN AMERICA QUARTER BY NUMBERS - nielsen.com · LATAM Chile CHILE SNAPSHOT In contrast to the...

Copyright © 2016 The Nielsen Company

LATIN AMERICA

QUARTER BY NUMBERS Q2 2016

1

IN THE INDUSTRY Nielsen Thought Leadership

BRAZIL CHILE

PERU

MEXICO

ARGENTINA

COUNTRY SNAPSHOT A local perspective of Latin American markets

LATAM AT A GLANCE Regional trends & consumer sentiment Looking through Latin America’s FMCG lens

COLOMBIA

COSTA RICA


ECONOMIC PULSE OF CONSUMERS AROUND LATAM

The Nielsen Consumer Confidence Index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

Tradingeconomics.com

LATAM AT A GLANCE

Peru and Colombia are the bright spots of consumer confidence fuelled by strong GDP growth. Important to highlight that after 6 quarters of a decreasing,

Consumer Confidence Index in Brazil, this is now stable this quarter and despite Mexican loss of confidence, GDP growth is still positive.

The Latin American growth challenge continues, in 2015 our economy slowed down due to oil prices, the reductions of exportations to China, high levels of corruption and devaluation rates in most countries, reducing consumer confidence throughout the region.

2

BRAZIL 74 0 -3.3 7.1

MEXICO 83 -3 2.4 3.2

CHILE 78 -2 1.8 3.6

ARGENTINA 71 -4 -1 38.4

GDP (annual %

growth)

Inflation

RateQ2'16

Q2'16 vs.

Q1'16

6 2.3 2 85 COLOMBIA

-0.88 3.9 1,4* 38,6* COSTA RICA

3.2 3.6 11 102 PERU

Q2'16Inflation

Rate

GDP (annual %

growth)

Q2'16 vs.

Q1'16

* Consumer Confidence Costa Rica, measured by “Universidad de Costa Rica”

CONSUMER CONFIDENCE INDEX

CONSUMER CONFIDENCE INDEX


CONSUMER SENTIMENTS IN LATAM

WHAT ARE THE TOP 3 CONCERNS IN THE NEXT SIX MONTHS?

ACTIONS TO SAVE ON HOUSEHOLD EXPENSES

TYPE OF CONCERN

TOP 3 ACTIONS HAVE THEY TAKEN TO SAVE MONEY

LATAM AT A GLANCE

Tradingeconomics.com

Latin Americans have registered the highest record of switching to cheaper grocery brands since 2014, pushed by Argentina (68%) and Colombia (54%)

which presented the highest percentage in the last two years.

3

0%

10%

20%

30%

40%

50%

60%

70%

LATAM BR MX AR CO CL PE

Crime

The economy

Job security

30%

40%

50%

60%

70%

LATAM BR MX AR CO CL PE

Switch to cheaper grocery brands Spend less on new clothes Cut down on out-of-home entertainment


LOOKING THROUGH LATIN AMERICA’S FMCG LENS

FAST MOVING CONSUMER GOODS MARKET DYNAMICS (Weighted Global Growth Reporter) – Latin America

WHERE ARE THE FMCG GROWTH OPPORTUNITIES?

% Volume Growth AMJ’16 vs. AMJ’15

Avg. volume growth below vs. last period

Avg. volume growth above vs. last period

4

5.1% 5.2% 5.2% 5.4% 5.7% 6.1%

1.4% 0.5% 1.8% 1.1% 1.1%

1.2% 6.6% 5.8%

7.0% 6.4% 6.7%

7.3%

MAM'15 MJJ'15 JAS'15 SON'15 NDJ'16 JFM'16

Unit Value Change Volume Change Nominal Value Growth

MEXICO: +3.5%

COLOMBIA: +3.3%

PERU: +6.3%

CHILE: +2.7%

BRAZIL: -3.4%

ARGENTINA: -7.1%

COSTA RICA: +2.0%

NICARAGUA: +6.5%

PANAMA: +4.5%

EL SALVADOR: -1.5%

GUATEMALA: +4.5%

HONDURAS: +4.2%

LATAM AT A GLANCE


BRAZIL SNAPSHOT

COUNTRY HIGHLIGHTS

NIELSEN CONSUMER CONFIDENCE INDEX ECONOMY WATCH

Brazil is facing one of the most severe recessions in its history; economic activity will continue to weaken while the political environment remains turbulent. We expect GDP to decrease around 3.0% in 2016 and then rebound 0.9% in 2017. Inflation slowdown and current account improvement will bring some relief, while fiscal concerns will continue. Brazil’s unemployment rate rose in June to its highest in nearly five years, eroding consumer confidence about job prospects over the next 12 months – 81% considered that job prospects to be bleak –. In addition, core inflation rate increased 7.7% in June of 2016 over the same month in the previous year according to Banco Central do Brazil and consumers took measures to maintain their basic needs – 63% of Brazilians saved on out of home entertainment and 60% tried to save on gas and electricity – . Meanwhile, 47% are seeking ways to save money in their grocery shopping, that’s why manufacturers must re-think their price point strategy (considering low price points – value for money) and be thoughtful about channel changes (Brazilian consumers are doing more of their grocery shopping in discount and Cash & Carry formats – fast growing channels), manufacturers must offer alternative packages, exclusive sku’s or cheaper brands.

LUIS ARJONA CLUSTER LEADER BRAZIL & CHILE

5.8 5.9 6.4

10.7

7.1

1.9 3.0

0.1

-3.8 -3.3

2012 2013 2014 2015Forecast

2016

Inflation, consumer prices (annual %)

GDP growth (annual %)

85 83

81 83

79 79

88

81 79

76 74 74

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM Brazil

5


0.6% -3.4% -3.2%

7.5%

5.1% 4.9%

6.9%

8.7% 9.6%

RY AMJ'15 RY AMJ'16 AMJ'16

% Variation in Volume Sales % Variation in Value Sales % Variation in Price

FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING JUN’16 VS. YEAR ENDING JUN’15

TOTAL BRAZIL – CHANNEL PERFORMANCE

FMCG volume sales have reduced its contraction rate in spite of price increases

According to our last Global Survey “Retail Growth Strategies”, Brazilians usually like to shop, 75% of them said that enjoy shopping for groceries (vs. 57% of LatAm). Freshness (68%) and lower

prices (64%) are the main reasons for them to shop at a particular retailer.

VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)

TOTAL BRAZIL

6

67%

33%

MODERN TRADE

OTHER CHANNELS

-2.3%

-4.7%

5.9%

3.1%

Vo

lum

e

Val

ue


47% of Brazilians, are switching to cheaper grocery brands in order to save money, however healthy segment (which is expensive) remains with superior growth (+8.2% in value sales)

Facing the current economic situation, 29% of Brazilians saved money via cutting down on or buy cheaper brands of alcohol

TOTAL BRAZIL – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)

TOTAL BRAZIL – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)

7

21%

47%

32%

Low Price

Medium Price

Premium Price

5.1%

7.7%

1.2%

7.6%

-3.2%

-2.3%

-1.2%

-1.2%

-7.1%

-4.7%

-1.8%

-3.0%

VAR (%) IN WEIGHTED VOLUME SALES

VAR (%) IN VALUE SALES

4.9%

3.9%

6.8%

5.9%

1.5%

1.8%

8.3%

6.0%

9.7%

6.3%

8.1%

7.2%

9.3%

6.8%

9.4%

VAR (%) IN PRICE

PERISHABLES

SWEET SNACKS

SALTY SNACKS

BEVERAGES

ALCOHOLIC BEV.

PERSONAL CARE

HOUSEHOLD CARE

TOTAL FMCG

TOTAL FMCG


85 83

81

83

79 79

87

84

79 79 80

78

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM Chile

CHILE SNAPSHOT

In contrast to the rest of Latin America, the Chilean economy has maintained a sustained growth in the last few years, however; in 2015 Chile has faced an economic deceleration because of the drop in copper prices. In addition, multiple scandals of political corruption and a slight increase in the unemployment rates (6.9% in June), generated a moderate GDP forecast for 2016 (1.6%), and recently economists have reduced the economic perspectives for 2017 – 2020 (Around 3.5%). Chileans are confident about future economy prospects for their country – 74% think that they are in an economic recession at this moment and 46% think that their country will be out of the recession in the next 12 months –. However, consumers are worried about their personal finances – 46% consider that their personal finances will not be positive in the next 12 months, 70% declared that is not a good moment to buy things that they want or need and 53% have decided to switch to cheaper grocery brands –. In addition, consumer debt has increased by 5% last year – 12% declared that debt is their biggest worry, compared to 7% in Latin America – and they are not confident about their job prospects over the next 12 months – 78% think that are bleak– .

8

1.5

3

4.6 4.4 3.6

5.5 5

1.9 2.1 1.8

2012 2013 2014 2015Forecast

2016



COUNTRY HIGHLIGHTS


BRUCE MARTIN MARKET LEADER CHILE


1.5%

5.5%

5.9%

11.4%

57%

43%

MODERN TRADE

OTHER CHANNELS

1.1% 2.7%

1.1% 1.2% 1.9% 2.5% 2.8% 2.7% 2.7%

8.4%

8.0%

8.5% 8.6% 9.1%

9.4% 10.0 8.5%

8.0 7.2%

5.1%

7.6% 5.3 7.4% 7.0% 6.5% 5.9% 5.4%

RY AMJ'15 RY AMJ'16 AMJ'15 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16


TOTAL CHILE – CHANNEL PERFORMANCE

FMCG volume has improved with the favourable exchange rate stabilising prices


9

Vo

lum

e

Val

ue

FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING JUN’16 VS. YEAR ENDING JUN’15

According to our last Global Survey, 35% (vs. 32% LatAm) of Chilean consider as a main reason for the shopping trip the stock up on food or household essentials


18%

53%

29%

Low Price

Medium Price

Premium Price

Food preparation categories and premium offerings in home care have driven growth

10

8.0%

9.7%

5.5%

11.7%

TOTAL FMCG

2.7%

2.9%

0.4%

5.0%

2.2%

5.4%

1.5%

-2.9%

8.0%

5.9%

3.6%

12.1%

7.3%

11.8%

8.1%

6.0%

5.4%

3.2%

3.2%

6.8%

5.7%

6.2%

6.7%

9.4%

TOTAL CHILE – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)


VAR (%) IN VALUE SALES VAR (%) IN PRICE

PERISHABLES

DAIRY

SNACKS & SWEETS

BEVERAGES

ALCOHOLIC BEV.

PERSONAL CARE

HOUSEHOLD CARE

TOTAL FMCG

TOTAL CHILE – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)

According to our last Global Survey, 43% of Chilean are willing to pay a premium price, if the product provides superior function or performance and 49% if contains organic or natural

ingredients


85 83

81 83

79 79

86 84

86

89

86

83

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM México

COUNTRY HIGHLIGHTS

11

Despite external factors such as oil price decrease, USD exchange rate increase and internal political corruption scandals have influenced in the modest expansion of Mexico's economy during the second quarter of 2016 (2.4%). Mexicans feel that their country is in a recession (82%) and 55% declared that the country most likely won’t be out of the recession within the next 12 months. Controlled levels of inflation rate (2.5% - July), employment generation and significant rise of remittances (8.58% 1st. Quarter) – influenced by exchange rate increase – have favored the internal consumption during the first semester, as a result and according to the National Association of Supermarkets (ANTAD), retail sales grew 8.6% in June. However and according to Armando Uriegas “Positive indicators start changing and we have recently begun to see some deceleration signals, particularly in household , beauty and personal care products which are the first categories to be affected by an adverse economic climate. Also increasing exchange rates have forced manufacturers to increase their prices; this situation can lead to a consumption contraction”. Manufacturers must be strategic in their implementation of price points to help small budgets and value for money proposals, for those who can pay more for bigger sizes and be thoughtful about innovation. “I think that this will be key for companies to make smart decisions in order to close a successful 2016 and set the basis to guarantee their success next year, it is likely the country will register further decrease in the economy of 2017, which undoubtedly will impact consumption” Armando Uriegas.

ARMANDO URIEGAS GENERAL DIRECTOR MEXICO

3.6 4 4.1

2.1

3.2 4

1.4 2.3 2.5 2.4

2012 2013 2014 2015Forecast

2016




MEXICO SNAPSHOT

Mexico


40%

60%

MODERN TRADE

OTHER CHANNELS

1.5% 3.5% 1.9% 2.7% 3.0% 3.1% 3.4% 3.6% 3.5%

5.5%

6.9%

5.3% 5.4% 5.5% 5.7% 6.1%

6.6% 6.9%

4.2% 3.6% 3.5%

5.3 2.6% 2.7% 2.9% 3.2% 3.6%



TOTAL MEXICO – CHANNEL PERFORMANCE



12

2.9%

4.0%

6.5%

7.1%

Vo

lum

e

Val

ue

FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING ON JUN’16 VS. YEAR ENDING ON JUN’15

According to our last Global Survey, 35% (vs. 34% LatAm) of Mexican consider as a main reason for the shopping trip to buy a few essential items


13

3.5%

1.3%

6.0%

4.2%

4.3%

1.0%

4.4%

2.2%

6.9%

4.6%

8.9%

6.7%

9.1%

4.6%

6.5%

6.2%

3.6%

3.4%

3.4%

2.6%

4.0%

3.7%

2.0%

4.0%

16%

60%

24%

Low Price

Medium Price

Premium Price

6.9%

5.2%

8.6%

3.9%

TOTAL FMCG

TOTAL MEXICO – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)



PERISHABLES

BEVERAGES

PHARMACIES

SNACKS & SWEETS

PERSONAL CARE

DAIRY

HOUSEHOLD CARE

TOTAL FMCG


TOTAL MEXICO – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)

46% of Mexican, are switching to cheaper grocery brands in order to save money, while generic brands are growing 10.4% because of diversify their product assortment


2.4 1.9

3.7

6.8 6

4 4.9 4.4

3.1 2.3

2012 2013 2014 2015Forecast

2016



85 83 81 83 79 79

94 93 90 94 83 85

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM Colombia

14

Recent price increases, potential tax reforms and political themes such as the possible peace agreement have provided Colombians with a perception of an internal crisis – 79% think that their country in an economic recession at this moment and 55% think that the crisis will not end within the next 12 months –. However, Colombians have shown better levels of consumer confidence than Latin America as a whole and they are more positive about their finances – 63% thinks that their personal finances will be good or excellent in the next 12 months – that’s why we can observe positive results in FMCG measured by Nielsen . According to Juan Felipe Saavedra “Despite price increases, most categories were stable, driven by beverages which represent 60% of total growth in the last period; in part the El Niño phenomena and partly because they were less affected by inflation. In the next quarter we expect a slowdown of beverage consumption due to the rainy season and a discreet positive trend will continue in food, personal care and household products. We anticipate that the final balance of 2016 is slightly higher than 2015.”

JUAN FELIPE SAAVEDRA GENERAL DIRECTOR COLOMBIA

COUNTRY HIGHLIGHTS


COLOMBIA SNAPSHOT


According to our last Global Survey, 36% (vs. 34% LatAm) of Colombian consider as a main reason for the shopping trip to buy a few essential items

25%

75%

MODERN TRADE

OTHER CHANNELS

3.3% 2.7% 2.4% 2.5% 2.8% 3.3% 3.3%

8.7% 5.2% 5.3% 6.0%

7.1% 8.2% 8.7%

5.9%

2.8% 3.3% 5.3

4.7% 5.4% 5.9%

RY AMJ'16 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16



Source: Nielsen Retail Index – Value in Local Currency - Variation in volume pondered by value share – 130 categories

15

TOTAL BASKET

1.3%

4.0%

8.3%

8.8%

Vo

lum

e

Val

ue


TOTAL COLOMBIA – CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)


15%

59%

26%

Low Price

Medium Price

Premium Price

16

8.7%

10.9%

7.1%

11.3%

TOTAL FMCG

3.3%

-0.5%

6.8%

2.2%

1.2%

0.6%

8.7%

8.6%

10.8%

8.8%

7.3%

6.0%

2.3%

5.9%

9.4%

4.5%

6.5%

6.2%

5.7%

6.0%

TOTAL COLOMBIA – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)




PERISHABLES

BEVERAGES

SALTY SNACKS

PERSONAL CARE

HOUSEHOLD CARE

MISCELANEOUS

TOTAL FMCG

TOTAL COLOMBIA – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)

According to our last Global Survey, 56% of Colombian are willing to pay a premium price, if the product provides superior function or performance and 53% if contains organic or natural

ingredients


Emerging Markets represent 23% of Latin American GDP growing at an average of 0.6% (1.5% w/o Venezuela). With more than 190 Million consumers, these countries are a mixture of realities, challenges and opportunities. Last year we observed wide contrasts between countries, while Venezuela and Argentina are facing severe recessions with high inflation rates, volatile political and economic situations, which where reflected in their FMCG evolution, countries such as Peru have plenty of opportunities – FMCG are growing 6.4% in volume sales vs. last rolling year –. Central America and The Caribbean have shown higher than average volume rates compared to the rest of Latin America, because this area has been less affected by falling oil prices and other raw materials. This average is the result of various countries with positive views, while we see some negative trends, in many cases related to the socioeconomic context and issues of violence. According to Alvaro Navarro, Market Leader of Central America and Caribbean, “On the positive side, we have found growing behaviors in Dominican Republic, Panama and Nicaragua, in these countries there is macroeconomic growth and political stability. In addition, these countries are the least affected by the phenomena of violence which other Central American countries have faced. Costa Rica and Honduras have shown a recovery in their basket after previous periods of decline”. “On the negative spectrum we have two countries which are: El Salvador, where consumers are worried mainly by issues of violence and extortion caused by gangs (Maras) and also Puerto Rico, whose long economic crisis has been exacerbated by issues of migration and default on its public debt” . “Finally, Guatemala, which has also had issues of violence showed a growth in the basket but this is now beginning to decelerate”.

17

EMERGING MARKETS

MARTHA GIRALDO CLUSTER LEADER EMERGING MARKETS


85 83 81 83 79 79

99 95 95 96 91 102

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM Perú

18

2.7 2.9 3.2 4.4

3.2

6 5.9

2.4 3.3 3.6

2012 2013 2014 2015Forecast

2016

Inflation, consumer prices (annual %)GDP growth (annual %)

Peru is a bright spot in the region, with more than 30 million people and one of the highest forecasts of GDP Growth (3.6%). Peruvians are positive about their future and are more optimistic than ever after the election period, the new government is committed to generate new ways of long term economic growth, and therefore the uncertainty has been reduced. In addition, inflation levels (0,14% the 2nd lowest inflation rate in 2016) have reduced product’s price perception and favoring the positive performance of FMCG sales – Increasing 6.4% in volume sales in the last rolling year –. “We are still positive about the growth expectations, lead by Traditional Trade sales increasing in more moderate rates”. André Frenk (Market Leader of Peru and Ecuador).

PERU SNAPSHOT

COUNTRY HIGHLIGHTS


ANDRÉFRENK MARKET LEADER PERU

Peru


30%

70%

MODERN TRADE

OTHER CHANNELS

3.6%

6.3%

3.9% 5.2% 5.6% 4.5%

5.3%

5.1%

4.9%

5.3% 5.4% 5.1%

1.6%

-1.1%

2.3% 0.2% 2.4% 2.7%

RY AMJ'15 RY AMJ'16 OND'15 DEF'16 FMA'16 AMJ'16



19

1.0%

6.4%

3.4%

5.9%

Vo

lum

e

Val

ue


TOTAL PERU – CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)

According to our last Global Survey, 54% of Peruvian, are switching to cheaper grocery brands in order to save money, while generic brands are growing 7.1%


20

4.5%

2.7%

14.1%

-3.7%

0.9%

3.9%

5.1%

3.3%

11.6%

0.0%

2.7%

10.2%

2.7%

0.8%

3.4%

3.9%

2.2%

6.3%

17%

59%

24%

Low Price

Medium Price

Premium Price

5.1%

8.3%

0.8%

15.1%

TOTAL FMCG


TOTAL PERU – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)



PERISHABLES

BEVERAGES

SWEET SNACKS

PERSONAL CARE

HOUSEHOLD CARE

TOTAL FMCG

TOTAL PERU – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)

According to our last Global Survey, 43% of Peruvian are willing to pay a premium price if the product provides superior function or performance and 49% if contains organic or natural

ingredients


The current economic model continues to affect the decreasing purchasing power of Argentineans, consumers are therefore trying to rebalance their budgets taking into account high rate hikes in public services which have exceed 500%, increases in fuel prices (over 30% in four months) and with other hikes such as prepayments, private schools, building maintenance and other services. 17% of Argentinians stated that a primary concern for the following 6 months was an increase in food prices and 13% increasing utility prices – Highest results in the region –. With Insufficient wages of workers, together with the expulsion of vast sectors of formal employment, the product of layoffs has led to a considerable reduction in consumption of both durable goods and basic food products, which is why consumer confidence index reflects a decrease of 4 points vs. last quarter (71 points) which is the lowest in the Region. Consumers are also holding off making purchases for the moment – 84% considers that this is not the right time to buy what they would like –. With all of this economic uncertainty consumers are making dramatic changes in order to save money, these changes include: 68% have switched to cheaper brands, 59% try to save on gas and electricity and 50% have cut down on out of home entertainment and take away meals, according to Rafael Gouiran (Market Leader of South Emerging – Argentina, Uruguay, Bolivia y Paraguay) “The second quarter has had the greatest shrinkage in consumption. With a general feeling of anxiety regarding job permanence and also timely in GBA, with an adjustment of utility tariff has caused consumers to rethink their spending”.

21

10.8

26.6

38

26.9

38.4

-1.1

2.3

-2.6

2.4

-1

2012 2013 2014 2015Forecast

2016



85 83 81 83 79 79 75

81 78 88

75 71

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

LATAM Argentina

ARGENTINA SNAPSHOT

COUNTRY HIGHLIGHTS


RAFAEL GOUIRAN MARKET LEADER ARGENTINA



22

Vo

lum

e

Val

ue

FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR TO DATE ENDING ON JUN’16 VS. YEAR TO DATE ENDING ON JUN’15

TOTAL ARGENTINA – CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (YTD AS’16 VS. YTD AS’15)

According to our last Global Survey, 34% (vs. 32% LatAm) of Argentine consider as a main reason for the shopping trip the stock up on food or household essentials

-2.3 3.0 2.4 2.0 1.3

-2.5

31.8

34.0

26.0 29.7

5.3 34.7 35.0

YTD'16 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16


35%

65%

MODERN TRADE

OTHER CHANNELS

-3.6

-2.3

33.0

34.0


21%

47%

32%

Low Price

Medium Price

Premium Price

33.9%

32.1%

31.7%

38.5%

23

TOTAL FMCG


TOTAL ARGENTINA – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (YTD’16 VS YTD’15)

TOTAL ARGENTINA – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)



VAR (%) IN PRICE

PERISHABLES

BEVERAGES

PERSONAL CARE

HOUSEHOLD CARE

TOTAL FMCG

If raw material costs rose substantially for a manufacturer of food or personal care products 23% of Argentine prefer that manufacturers introduce new, smaller pack sizes at lower prices and

26% Offer larger economy sizes with lower price per usage/serving

-2.3

0.1

-3.5

-5

-5.4

30

29

29

31

30

34

29

34

38

38


Although in the last six months the consumer confidence had been improving, according to the latest survey by the Costa Rica University, which reported a slight decrease to 38.6%, compared with the previous quarter it had reached 40%, these results may have been influenced by recent labor figures, during the first quarter, the unemployment rate stood at 9.5%, slightly lower than the 10.1% recorded for the same period of 2015. The landscape is encouraging due to an improving economy, with a growth of 4.4% of GDP, 0.7 percentage points higher than a year ago; driven by internal consumption (4.7%), and the recovery of exports of goods and services (10.2%), also inflation rates are controlled - in June 2016 reached 0.9%, and recorded 12 consecutive months of negative variation rates.

24

4.6 3.7

5.1

-0.8

2

5.2

1.8

3 3.7 3.7

2012 2013 2014 2015Forecast

2016



41 40

32 37

40 39

Feb'15 May'15 Aug'15 Nov'15 Feb'16 May'16

Costa Rica

COUNTRY HIGHLIGHTS


COSTA RICA SNAPSHOT

ROBERTO DARSIE MARKET LEADER COSTA RICA


60%

40%

MODERN TRADE

OTHER CHANNELS

-1.5%

2.0%

-1.7%

-2.9% -3.1%

-2.2% -0.5% 0.9%

2.0%

-3.3%

0.5%

-3.5% -3.2

-2.8%

-1.3%

0.5%

0.7% 0.5%

-1.5% -0.8%

-1.4%

0.1 0.6%

1.3% 1.5%

0.5%

-0.8%




25

3.2%

-2.3%

1.7%

-4.2%

Vo

lum

e

Val

ue


TOTAL COSTA RICA – CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)

Small Formats in modern trade are gaining relevance in Costa Rica


0.5%

4.9%

-6.4%

10.0%

20%

49%

31%

Low Price

Medium Price

Premium Price

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TOTAL FMCG

2.0%

3.1%

-3.5%

5.8%

0.3%

4.3%

0.5%

-0.3%

-0.5%

2.7%

0.8%

1.6%

-0.8%

-2.4%

3.4%

-2.2%

0.8%

-2.2%


TOTAL COSTA RICA – BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN’16 VS. JUN’15)

TOTAL COSTA RICA – PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN’16 VS. JUN’15)



PERISHABLES

SNACKS & SWEETS

BEVERAGES

PERSONAL CARE

HOUSEHOLD CARE

TOTAL FMCG

VAR (%) IN PRICE


GLOBALLY 30% SALES,

COME FROM

TRADITIONAL STORES

TOP 250 RETAILERS TOTALED

AMOST US$ 4.5 TRILLION ~40%

IN THE INDUSTRY

27

Click on the images below for the latest industry insights from Nielsen.

NIELSEN THOUGHT LEADERSHIP

For more information, visit www.nielsen.com/latam

JULY, 2016 AUGUST, 2016

36% Growth Markets

55% Emerging Growth

7% Lead Markets

40% Greater China

HOW TO WIN IN

SMALL FORMATS?

“Convenience is not a store

format it’s a consumer need”

FOOD ON THE GO & RTE

EXTENDED SERVICES & HOURS

FRESH PRODUCTS


28

Economy Watch Economic Growth (GDP annual var. in %) and Inflation (CPI, annual var. in % EOP) sourced from Latin Focus Economics July 2016. Data included in Snapshot by country are the most recent available by local Banks. Consumer Confidence Index Nielsen global survey Q2’16 based on respondents with Internet access. Index levels above and below 100 indicate degrees of optimism/pessimism. Costa Rica is not included in Global Survey, for this report Consumer Confidence was sourced by “Universidad de Costa Rica” for May 2016. FMCG Market Dynamics Compares overall market dynamics (value in local currency and unit growth versus a year ago) in the Fast Moving Consumer Goods sector based on the sales tracking Nielsen performs in the mentioned Latin American markets. The FMCG definition is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. Total Basket Latin America has been calculated in the Global Growth Reporter. Super Category Performance definition of Super Categories are based on local market definitions, Price tiers are calculated in base of average category price (Low Price < - 20% vs. Category Price, Medium Price between -19.9 %to 19.9%, Premium Price > 20%).

DEFINITIONS & SOURCES

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