At the start of the pandemic, we examined what COVID-19 meant for three of Mintel’s 7 Drivers of consumer behavior in Latin America (LatAm): value, technology and wellbeing (Mintel clients can log in now to view the insights on value, technology, and wellbeing). Now, two years on, we are revisiting these consumer motivations in a new series.
Here, we explore how value has become a necessity in LatAm over the past two years and how, in addition to affordability, brands should promote the value of versatility and responsibility.
Inflation and rising cost of living are making consumers more vulnerable
Latin America has a long history of price instability. The latest round of price rises in 2021 put more struggling consumers at risk of financial hardship. Food prices make up a greater share of inflation indexes in LatAm than in other economies such as the US. According to Mintel Global Consumer data, at least one in two LatAm consumers say they stick to a set budget for groceries either all of the time or most of the time. The pandemic has seen surging food prices, leaving many families malnourished and forced to skip meals.
Value through price transparency
Recessions force consumers to focus on their needs, but COVID-19 has sensitized people to the needs of others who are less fortunate. According to Mintel Global Consumer data, 45% of Peruvian consumers say they support the welfare of workers. What’s more, 44% of Colombian consumers say they would be loyal to food and drink brands that are transparent with consumers (e.g. explaining why prices increased).
Brands that deliver value for money and operate responsibly will resonate with consumers.
Value through education and idea sharing
At a time when cash-strapped consumers are looking for ways to save money on food and drink, giving consumers new ideas of how to make nutritious meals with leftovers will be key to helping them make the most of the food they buy. Our research shows that over half of Mexican consumers have resolved to plan meals ahead of time to make use of all ingredients and avoid waste post-COVID-19.
Price sensitivity is going to have long-term effects in LatAm. Companies that provide as much detail as possible about the ingredients, processes, packaging and corporate social responsibility (CSR) commitments that contribute to the price of a product will win favor with consumers.
Value through discounting and waste reduction
Three in ten Argentine adults say it is important for beauty and personal care brands to be responsible for creating less waste. There is scope for brands and retailers to give BPC products a second life with special discounts for unused returned products or excess inventory.
Beauty retailers can take inspiration from Amazon Mexico‘s Amazon Warehouse that offers quality open box products at discounts. Another inspiration is Portuguese online retailer Good After, which sells products that have already reached the best-before date and thus can be sold at substantially lower prices.
Laundry brands have an opportunity to encourage consumers to adopt slow fashion by ‘buying better and wearing longer’, as promoted by a Levi’s 2021 campaign. Ola Laundry Detergent for Delicate Clothes from Brazil is said to offer 20% more color protection against fading when compared to a previous formulation, leaving clothes like new for longer.
What we think
After two ‘unprecedented’ years, inflation, rising living costs and surging food prices are driving consumers to seek value in different shapes and forms. More explicit communication about what a product price entails has become an expectation. Brands that embrace price transparency while delivering value for money and operating responsibly will be top of mind.
Mintel clients can log in to read the full analysis of the value of versatility and responsibility in LatAm. If you’re not a Mintel client, but interested to learn more about Mintel Global Consumer and the value it delivers to clients in LatAM, please get in touch.
