Consumer Behavior in Brazil: Coffee consumption falls for the 1st time in 10 years
Coffee consumption in Brazil fell 1.23% in 2013, totaling 20.08 million bags of 60 kg compared to 20.33 million bags in 2012, according to a report released recently by the Brazilian Association Coffee Industry (ABIC).
This is the first decline since 2003 and the second indent of the time series of the association, which began in 1990.
In terms of per capita consumption, trends is also downward. The per capita consumption was estimated by the association in 4.87 kilograms (kg) of roasted coffee in all of last year, against 4.98 kg in 2012.
ABIC attributes the decline to the fact that the breakfast table gained numerous new options ready for consumption beverages such as juices, chocolate and soy-based beverages. Although still not consumed these drinks have shown very high growth and compete with the coffee, according to the association.
Brazil remains the world’s second largest coffee consumer after the United States. But in terms of per capita consumption, the country ranks among the 7th and 8th place, according to the ABIC, the same level as countries like Italy and France.
Present in 95% of households
Domestic coffee consumption reaches about 95% of households, but remains stable while other products or new categories grow above 20% per year, as is the case of juice ready (25%) and soy-based beverages (29%), according to research from Kantar Worldpanel.
“These categories of higher value-added defy the coffee industry for innovation and for the resumption of higher growth rates, which may occur with the offer of coffee of better quality, differentiated and certificates,” said ABIC, in a statement.
The large consumption is still concentrated in classes C and D. The association points out, however, that these consumers are looking for products with better quality, even with higher price. “Gourmet Cafés and certificates seem to be the new trend of consumers for years to come,” says the report.
ABIC estimates that the volume of sales of roasted and ground coffee sector in 2013 was R$ 7.3 billion (over 3 billion US dollars).
For 2014, the ABIC estimates the resumption of growth in domestic consumption, “at 3% to 4%”, with greater demand for higher quality coffees.
Sales of coffee capsules grows 33%
According to the association, 81% of purchases in the category coffee happen in supermarkets. Outside the home, the main sales channel are the bakeries. The report shows, however, that coffee consumption outside the home continues to grow, representing 36% of the total.
The coffee powder represented 87.4% of sales by value. New products such as capsules, latte and cappuccinos, accounted for about 3.5% in value, but increased to 33% due to strong demand, the association reports.
Shelf Prices fell
The retail prices of coffee decreased throughout 2013. According to the report, the average value of the pound fell from R $ 14.82 (almost 6 US dollars) in January 2013 to R $ 12.55 (nearly 5 US dollars) in December, down 15% for the cafes ‘traditional’ type.
Coffee remains a cheap product for consumers, especially considering the cost per cup after preparation, the ABIC says. In six years, the accumulated high was 24.6%, says the association. “On the shelves, the increase in output ranged from $ 10.15 USD / kg (about o4 US dollars/kilo) in cafes ‘traditional’ type, in January 2008, to R $ 12.65 / kg (a little over 5 US dollars/kilo) in January.
The report also highlights that decreased the number of small businesses in the coffee market. In late 2013, the entity accounted for 1,428 industries in the country, of all sizes, compared to 1,490 in the previous year.
The reduction in the volume of domestic consumption has led to Abic to strengthen his argument that it is necessary to stimulate the consumption of coffee, investing more in marketing, advertising, product differentiation and innovation