Consumer Goods - Industry - South America Market, Share and Trends 2023-2028

Summary of Consumer Goods

The consumer goods market in South America was valued at US$ 610 billion in 2023 and is forecast to reach a value of US$ 810 billion by 2029, growing at a CAGR of 3.55% during the forecast period. Brazil represents the largest market with a 58% share of the region and is valued at US$ 0.35 trillion in 2023. Rising incomes and expanding middle-class populations across South American countries are driving stronger domestic demand, benefiting the consumer goods sector.

Brazil in particular has seen significant economic growth and a growing middle class in recent decades. As of 2023 – over 50 million Brazilians have entered the middle class – representing over 25% of the population. This expanding consumer base has boosted sales of packaged foods, beverages, personal care products and other consumer goods. Major international CPG companies like Unilever, PepsiCo and Nestle have established a strong presence in Brazil, capitalizing on these consumption trends. However— domestic brands also have a large market share and multinationals face competition.

Other large consumer markets in South America include Argentina, Colombia, Peru and Chile. Argentina has a population of over 45 million with around 35% considered middle class. The consumer goods industry has grown in line with GDP increases over the past five years. In Colombia and Peru, over 15% annual GDP growth — since the past decade — has lifted millions out of poverty into an emerging middle class who now demand more branded consumer products. Chile has the highest GDP per capita in South America and consumer spending has increased steadily each year.

E-commerce is also growing rapidly across South America, allowing CPG companies to reach consumers in new ways. Major retailers like MercadoLibre have enabled online shopping for millions, while m-commerce via cell phones is widespread. International players are partnering with local e-tailers to expand their digital presence, capturing new customers beyond physical stores. Overall— the combination of rising incomes, urbanization and digital channels transforming retail present many opportunities for the consumer goods sector in South America going forward.

Recent Trends and Insights

E-commerce has grown significantly in South America in recent years. Many industry insights proclaim that the share of e-commerce sales in total retail sales increased from 11.8% in 2020 to 14.1% in 2022. This reflects increasing consumer comfort with online shopping across the region. Major e-tailers like MercadoLibre and Amazon have invested heavily in logistics and payment platforms to capitalize on these trends. CPG companies have also boosted their direct-to-consumer online channels and marketplace presence.

Health and wellness trends around natural, organic and sustainable products have also become more prominent drivers in the South American consumer goods industry. Consumers are increasingly interested in ingredients lists and a product’s environmental and social impact. This represents an opportunity for brands to develop or reformulate products to meet these values-based demands. Companies have launched new lines highlighting natural ingredients, recyclable packaging, carbon offsets and other ethical initiatives to appeal to conscious consumers.

Another notable trend is customization and personalization in the consumer experience. E-commerce platforms allow for personalized recommendations, while some brands offer customized products or flavors. This enhanced personalization builds stronger emotional connections between brands and consumers. Companies are exploring new technologies like artificial intelligence to further refine their understanding of customer preferences at an individual level.

Overall— the combination of e-commerce growth, wellness priorities and demand for customized experiences indicate evolving consumer behaviours across South America. CPG companies must adapt their marketing, products and sales channels to engage consumers and gain a share in this dynamic regional market.

Product Insights

Innovation is occurring across various consumer goods categories in South America. Within packaged foods, private-label brands are gaining prominence through value pricing and quality improvements. Major retailers have invested in developing high-quality store brand products at affordable price points. This has boosted the market share of private label foods like pasta, rice, bread and other staples.

The athleisure segment is also expanding apparel markets in the region. As exercise and active lifestyles become more popular, brands are designing clothing suited for both workouts and everyday casual wear. Nike, Adidas and Under Armour have a growing presence marketing sneakers, yoga pants and sports bras to fitness enthusiasts.

Meanwhile— the electronics category is being powered by growth in smart home devices as improved connectivity infrastructure enables new technologies. Products like smart speakers, security cameras, thermostats and lighting are benefiting from the rollout of 4G/LTE networks across South America. E-commerce also allows consumers to more easily purchase these innovative devices.

Customers also increasingly demand products with fewer ingredients, organic/natural labels and ethically-sourced components. This represents opportunities for brands to highlight clean label positioning, fair trade certifications, recyclable packaging and other sustainability attributes. Companies are responding by introducing new lines meeting these values-based demands.

Overall— private label expansion, athleisure trends, smart home adoption and wellness priorities indicate the types of innovative products and categories succeeding in the dynamic South American consumer goods landscape.

Key Companies

Some major players within this vast domain of industry are

• Nestlé
• PepsiCo
• Coca-Cola
• Ambev
• Alicorp
• L’Oréal
• Natura Cosméticos
• Avon Products
• Boticário

Regional Analysis

Major South American markets like Brazil, Argentina, Colombia and others present sizable addressable populations for consumer goods companies. Brazil represents the largest opportunity with a population of over 200 million people and GDP per capita of US$11,000 in 2022 according to data points seen within the industry. Brazil’s domestic market alone is larger than many countries.

Rising incomes are enabling more consumers across South America to trade up to higher-priced consumer brands and product tiers. Disposable incomes have increased substantially in countries like Colombia, Peru and Chile over the past decade per OECD figures. This supports demand for premium personal care, packaged food and other goods.

Political and economic stability also influences forecasts for some countries. Argentina has experienced volatility in recent years, with GDP growth varying significantly. However, the economy has shown signs of recovery in 2022. Multinational CPG companies closely monitor stability when investing and expanding in South American markets.

Overall population growth also presents opportunities. Countries like Colombia and Peru have young, expanding populations which will continue increasing the consumer base in coming decades barring major changes. Sustained GDP expansion coupled with a growing middle class points to favorable long-term prospects for the South American consumer goods sector. However— macroeconomic and political dynamics could impact projections.

Market Segmentation

By Type:

• Food and beverages
• Personal care and cosmetics
• Home care
• Other FMCG (fast-moving consumer goods)

By End User:

• Households/Residential
• Commercial sector (hotels, restaurants, offices etc)
• Institutional sector (schools, hospitals etc)

By Sub-Sector:

• Packaged foods
• Beauty and personal care
• Home care/home appliances
• Other non-durables

By Countries:

• Brazil
• Argentina
• Columbia

Our Methodology

We have offered a well-founded review of the South America’s regional Consumer Goods market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.