The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In Brazil

Published by: Datamonitor

Published: Sep. 10, 2009 - 15 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

THE FUTURE DECODED

INTRODUCTION: Understanding how 'recessionary mindsets' influence Brazilians' attitudes towards and actual consumption is vital

The 'recessionary mindset' of Brazilian consumers is reflected by the widespread belief that they're in a recession

The economic downturn has had an impact on the lifestyles of more than half of Brazilian consumers

Key takeouts and implications: a recessionary impact on Brazilians' lifestyles has not yet been fully matched by a desire to accept the presence of a recession

TREND: Brazilians remain optimistic despite recognition of downturn affecting Brazil

Brazilians are generally content with their quality of life despite being divided about the country's overall direction

Key takeouts and implications: Brazilians' mood towards the direction of the country has dampened slightly but they remain relatively upbeat of their quality of life

TREND: Brazilian consumers have tempered optimism in their financial security and are optimistic about the future economic prospects

Satisfaction with one's financial situation is low among Brazilian consumers despite the wider confidence in the economic situation

Perceptions about the economy, job security, financial status and the housing market in Brazil are all pessimistic to varying degrees, but there is considerable optimism for the six months ahead

Brazilians are managing their finances more closely with some even struggling to pay the bills

Brazilians are making greater efforts to save and still aspire to be less reluctant on credit

Key takeouts and implications: Brazilians recognize that recession has occurred but remain upbeat about the situation and future recovery

INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Brazilians with levels of stress up and personal happiness down

Stress levels have all been negatively impacted during the financial downturn

Work-life balance has also worsened in combination with the deepening downturn

The happiness levels of Brazilian citizens have declined in line with the global economic crisis

Key takeouts and implications: Brazilians report increased stress and fatigue amid the downturn, but are confident that this will not coming towards the end of 2009

INSIGHT: Brazilian consumers have become increasingly price and value conscious following the global economic downturn

Brazilian consumers are becoming more value conscious and therefore looking to save money when buying groceries

Price and value consciousness heavily influences where Brazilian consumers do their grocery shopping and how they shop but quality still matters too

Key takeouts and implications: the general value consciousness of Brazilians has intensified and is reflected by how they determine where to shop

INSIGHT: Brand loyalties are under increasing threat as Brazilian shoppers give up brands and increasingly embrace private label

Brazilian consumers are beginning to give up some of their favorite brands, as they make more 'considered' choices

Private labels are becoming more attractive to Brazilian shoppers, especially in the downturn

Key takeouts and implications: the general value consciousness of Brazilians, combined with their current reflective consumption patterns has the potential to create an optimal platform for private label growth. But consumer brand preferences and perceived quality differentials acts as barriers to private label growth

INSIGHT: Brazilian consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation

Brazilian consumers are adopting various responses to cut back on food and beverage expenditures, particularly preparing more meals at home

Few Brazilian shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents

Key takeouts and implications: a resurging desire to cook more often at home has occurred yet increased competition in food and non-alcoholic beverages between private label and market leading brand has yet to materialize

INSIGHT: The significant majority of Brazilians' personal care regimes and related product choices have been 'recession resistant'

More than three quarters of Brazilian consumers are committed to looking their best in day-to-day life

Price and value conscious personal care/beauty shoppers in Brazil have not made notable changes to their personal care shopping and usage in order to save money

Brazilians are largely unaware or indifferent towards private label personal care products

Key takeouts and implications: Brazilians' health and beauty regimes are influenced by a strong desire to look one's best

INSIGHT: Brazilians' alcohol consumption patterns and preferences have not changed significantly during the downturn

Brazilian drinkers are careful about how much they spend on alcohol, but do not perceive that they have been making significant cut backs in the amount they consume

Brazilian drinkers have become more value conscious in both their at-home and out-of-home alcoholic beverage choices in 2008-09

Private label alcohol is not as prevalent in Brazil as in other countries which results in uncertainty about comparative quality against branded equivalents

Brazilian drinkers are more concerned about the quality credentials of alcoholic beverage brands and are less concerned about brand image

Key takeouts and implications: there has been little to no change for around six in ten Brazilian drinkers suggesting that alcohol is largely 'recession resistant'

INSIGHT: Brazilians' household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn

Price led value is still the most influential factor for Brazilians' household and laundry care purchases but preferences do reflect other important influences

The private label household care market in Brazil is small but potentially lucrative given shoppers' desire for value

Key takeouts and implications: Brazilians' associate hygiene and cleanliness with wellbeing and this, combined with their inherent dislike of household chores, makes them somewhat quality conscious

ACTION POINTS

ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition without just focusing on lower prices

Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans

Appeal to Brazilian consumers' desire to be 'better shoppers'

Ensure that the value gains are instantaneous

Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions

Focus on quality to maintain differentiation and prove to consumers that quality really matters

Start planning for the longer-term by continually tracking Brazilian consumers as an economic recovery begins to become a reality

APPENDIX

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Consumer survey: level of satisfaction with the general direction of how things are going and quality of life, in Brazil (compared with the global average), 2009

Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in Brazil (compared with the global average), 2009

Table 3: Consumer survey: perceptions of whether broader economic conditions, household's financial situation, job security/confidence and housing market confidence had improved or worsened in the six month previous and how each might change in the proceeding six months, in Brazil, 2009

Table 4: Consumer survey: propensity to feel tense and the extent to which perceived levels of stress have changed in the last six months and are expected to change in the next six months, in Brazil, 2008-09

Table 5: Consumer survey: propensity to feel very tired and the extent to which perceived work-life balance has changed in the last six months and are expected to change in the next six months, in Brazil

Table 6: Consumer survey: happiness levels and the extent to which perceived happiness has changed in the last six months and are expected to change in the next six months, in Brazil, 2008-09

Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Brazilian shoppers, 2009

Table 8: Consumer survey: changing efforts being made to use coupons, change grocery store choice to save money, embrace more disciplined shopping and gather and utilize store price information, among Brazilian shoppers, 2008-2009

Table 9: Consumer survey: the relative cost/value and quality consciousness of Australians and global consumers overall when purchasing food and beverage products in 2008

Table 10: Consumer survey: the extent to which Brazilian consumers are making effort to save money by adopting various food and drinks consumption and preparation approaches, 2008-09

Table 11: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands in food, soft drinks and hot drinks, in Brazil, 2009

Table 12: Consumer survey: the importance attached to looking one's best in day-to-day life, the pressure to look good, and satisfaction with physical attractiveness/ appearance, among Brazilian consumers, 2008 and 2009

Table 13: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in Brazil, 2008-09

Table 14: Consumer survey: attempts made by Brazilians to change their personal care/beauty habits in order to save money, by product category, 2008-09

Table 15: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands for grooming/ beauty products, and agreement that such products are good alternatives to well known or market leading famous brands, in Brazil, 2009

Table 16: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in Brazil have cut down on the overall amount of alcohol bought/consumed in 2008-09

Table 17: Consumer survey: the degree to which household and laundry care consumers in Brazil have cut down on the overall amount of alcohol bought/consumed in 2008-09

Table 18: Consumer survey: Brazilian attitudes towards doing housework, 2008

Table 19: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands for household cleaning/laundry products, and how often such products are purchased to save money, in Brazil, 2009

List of Figures

Figure 1: Datamonitor's Recession and Recovery portal will allow industry players to continually identify emerging opportunities and track what is happening in the Brazilian economy as it develops

Figure 2: More than one-third of Brazilian consumers believe the country is in recession but a relatively small proportion of these 'strongly agree'

Figure 3: One-in-four Brazilian consumers feels that their lifestyle has not changed in light of the downturn

Figure 4: Brazilian consumers are divided about the direction their country is taking but this has not significantly impacted their perceptions on quality of life

Figure 5: Brazilians' positive views about the general direction of the country have improved in the last decade but societal skepticism is still pronounced

Figure 6: Over the course of 2008 and 2009, Brazilians have expressed considerably higher positivity about the economic situation in the country compared to US citizens

Figure 7: Brazilians, having become more prosperous, increasingly welcome a free market economy

Figure 8: Nearly half of Brazilian consumers are currently dissatisfied with their financial situation

Figure 9: Brazilians' negativity about the economy at large is greater than that shown towards their personal situation

Figure 10: More than half of Brazilians expect economic conditions and their own household's finances to improve in the period April 2009 through to October 2009 and many feel good about their job security too

Figure 11: The future focused economic confidence of Brazilians looking forward to 2010 is very strong

Figure 12: Brazilian consumers are managing their finances more closely while two-in-five individuals report difficulties in paying all the bills

Figure 13: Brazilians have become more accepting of credit and express a decreasing desire to save money

Figure 14: The economic downturn has also been accompanied by additional stress levels among Brazilians

Figure 15: Brazilians are prone to fatigue while almost one-quarter has experienced a worsening work-life balance in the period October 2008 to April 2009

Figure 16: Nearly one in four Brazilian citizens has become less happy during the period October 2008 to April 2009

Figure 17: The overwhelming majority of Brazilian consumers are more value conscious following the downturn

Figure 18: Quality of products sold has more influence than lower prices or habit over where people in Brazil do most of their grocery shopping

Figure 19: Price and value consciousness is influencing where Brazilian consumers do their grocery shopping and how they shop

Figure 20: Indexed retail channel sales for food, drink and tobacco, Brazil, 2004-2008

Figure 21: As the global economic downturn has intensified, so too has the extent to which Brazilian consumers have been forced to sacrifice some of their favorite brands

Figure 22: Being seen with the right brand is more important to Brazilians than US consumers

Figure 23: Private label range plays a small role in where people shop, in Brazil, compared to globally

Figure 24: Less than a third of Brazilian shoppers are routinely buying private label/store branded products in an effort to save money

Figure 25: The private label market is impacted by a broad range of drivers and inhibitors

Figure 26: Brazilians became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise

Figure 27: The attributes deemed most influential in what food and beverages Brazilians buy highlight the importance of living well for less money

Figure 28: Brazilians are adopting various responses to cut back on food and beverage expenditures

Figure 29: The changes in self-reported propensity for Brazilian consumers to cook an evening meal at home from scratch have become less polarized in 2008-09

Figure 30: There have been slight increases in the propensity for Brazilians to have a occasional takeaway meals at home but fewer have been doing so every day so far in 2008-09

Figure 31: Brazilian consumers have generally negative opinions of private label food and non-alcoholic beverage products available in their home market

Figure 32: Brazilian consumers are highly appearance conscious and this makes them less willing to trade-down when making personal care choices

Figure 33: Brazilian personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality

Figure 34: Personal care/beauty shoppers in Brazil and elsewhere are highly price conscious

Figure 35: More than one-third of Brazilian consumers consider private label beauty products to be good alternatives to well known or market leading brands

Figure 36: Brazilian consumers are careful about how much they spend on alcohol, but do not perceive that they have been making significant cut bucks in the amount they consume

Figure 37: Value consciousness among Brazilian drinkers has had more impact on at-home alcoholic drinks' consumption in 2008-09

Figure 38: Brazilian drinkers, perhaps influenced by a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages

Figure 39: Over half of Brazilian drinkers are highly influenced by alcohol beverage promotional offers

Figure 40: Only 16% of Brazilian drinkers believe that private label alcoholic drinks are good alternatives to market leading or famous brands

Figure 41: Brazilians are largely unfamiliar with or inexperienced drinkers of private label alcohol beverages

Figure 42: Although Brazilian drinkers are price conscious, brand name is becoming more important

Figure 43: Price led value is still the most influential factor for Brazilians' household and laundry care purchases

Figure 44: In 2008, Brazilian household and laundry care choices were made with greater consideration for cost/ value but consumers showed an ongoing desire for efficacy led quality

Figure 45: Brazilians value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks

Figure 46: More than three-quarters of Brazilians are 'frequent' purchasers of household care products on the basis of value-for-money

Figure 47: One in five Brazilians regularly purchases private label household care products to save money

Figure 48: A small proportion of Brazilians consider private label household and laundry products to be superior to branded equivalents

Figure 49: Everyday value pricing is an appealing offer for many Brazilian consumers who are re-prioritizing their purchasing amid the economic slowdown

Figure 50: Carrefour is highlighting the value gains for Brazilian consumers

Figure 51: Shopping strictly from a list is likely to rise during recession so could become a key consumer behavior to target

Figure 52: Brazilian retailers are changing their loyalty cards to provide a more augmented offering

Figure 53: Manufacturers and retailers looking to deliver value-for-money must in the provision of factors associated with the PPI, but while also offering consumers lower than expected prices

Figure 54: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term

Abstract

• Detailed analysis documenting Brazilian consumers' 'recessionary mindset' and how this influences perceptions about current and future prospects
• Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in Brazil
• In-depth analysis of Brazilians' changing price sensitivity, value consciousness and attitudes towards private label across four major FMCG sectors
• Countries and categories covered: Brazil; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

• Gain a detailed understanding of changing consumer attitudes and behaviors amid the downturn in order to determine appropriate recessionary strategies
• Obtain country and sector specific insight about pertinent recessionary themes such as private label and consumers' value consciousness
• Assist consumer segmentation and targeting efforts by accessing data from two waves of primary research conducted in August 2008 and April 2009

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