Tissue World Magazine | Euromonitor International
CONSUMERS WANT SUSTAINABILITY – BUT THE COST-OFLIVING CRISIS MEANS IT MUST BE AT THE RIGHT PRICE Understanding the complex drivers behind consumer choices has become indispensable. Report by Jorge Araya, Santiago-based Consultant Tissue & Hygiene, Euromonitor International.
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n recent years, countries across Latin America have been immersed in a complex economic scenario that has proven challenging to navigate. The low economic growth in the region’s key markets has led to a contraction in the consumption of various categories, directly impacting several industries in the fast-moving consumer goods sector, including consumer tissue. Without intending to see the glass as half empty, the projections for 2024 are modest to moderate, posing a challenge to overcome in the new consumer reality.
THE INFLATIONARY FACTOR – AND THE ROLLERCOASTER OF RISING PRICES
Undoubtedly, inflation, as eflected in the prices of consumer goods, has had a significant impact on the performance of the industry. In 2022, it reached 15% in Latin America, with Argentina, Chile, and Colombia being the markets with the highest recorded rates during that period. Currently, although inflation tends to dec ease, it persists above pre-pandemic levels and central banks’ targets. Additionally, the sluggish growth of major economies and interest rates, directly impacting companies’ investment capacity and available working capital crucial for job creation, further compounds concerns. The current cost-of-living crisis has brought about a change in purchasing priorities, forcing increasing
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numbers of consumers to prioritise quality and value over attributes such as sustainability. This scenario amplifies consumers’ sensitivity to any price changes and encourages them to contemplate switching to private label brands in pursuit of more cost-effective alternatives. The Euromonitor Consumer Lifestyles Survey 2023 reveals a significant shift in the behaviour of young Latin American individuals aged 18 to 29. This demographic shows a notable inclination towards prioritising private labels over established brands in the next 12 months. Surprisingly, this preference is not directly linked to income levels, as individuals with medium to high incomes within this age group display a greater openness to considering private label alternatives. This trend reflects a nuanced change in consumer values, indicating that factors beyond financial constraints influence eferences toward quality and value rather than solely relying on well-known brands. As consumer choices evolve, the connection between age, mindset, and purchasing decisions becomes increasingly apparent, reshaping market dynamics.
THE LATIN AMERICAN CONSUMERS
Understanding the intricate characteristics and consumption patterns of Latin American consumers is indispensable for formulating effective strategies to enhance the penetration and sales of tissue products. The significant p evalence of small
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12/01/2024 20:18
