Tissue World Magazine | Euromonitor International
BRAZIL’S LONGER TERM TISSUE RECOVERY ‘PROMISING,’ BUT UNCERTAINTY REMAINS OVER ECONOMIC AND CULTURAL CHANGES Lower birth rate and shift away from tradition families towards single or two-people households without children will affect future market. By Paula Ferolla, São Paulo-based Consumer Insights Consultant, Euromonitor International.
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n recent years, inflation was the top theme across many channels and categories in Brazil, including tissue. The recent post-pandemic supply chain disruptions, additionally affected by the Russian-Ukrainian war, have unbalanced the cellulose supply and demand relation. Consequently, manufacturers have increased average prices in Brazil or compensated cost pressure through shrinkflation, especially on toilet paper and paper towels. Packaging diversification has also been a retailing strategy across tissue brands, whereas a wider portfolio can account for different buying power fitting to a diverse set of consumer’s budgets between two ends of polarization – between value and premium. As such, the tissue industry in Brazil has seen negative volume performance in 2022, while inflation boosted a slow but positive retail value growth. As the controlled inflation ceiling has recently remained above that observed in many developed
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countries, Brazilian consumers continuously need to accommodate their household budget among grocery categories. Within social classes stratification, economically disadvantaged consumers from classes D and E account for more than 75% of the population, according to Euromonitor’s data based on national statistics. Overall, consumers struggle to maintain their purchasing behaviours in turbulent socio-economic scenarios, while the national minimum wage hasn’t increased accordingly to inflation, often choosing private label options or more affordable brands as an alternative, especially on napkins and toilet paper. Increasing price-sensitivity and inflation have led Brazilian consumers to spread out their grocery shopping throughout the month and explore different purchasing channels. This has had a direct effect on warehouse clubs’ growth since 2020, as low and medium-income consumers are eager to find affordable prices and buy in bulks, as a better cost-benefit decision. Some chains’ expansion
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