Worsening economic outlook
Brazil’s economy is currently in the doldrums. GDP has expanded meagerly in recent quarters and recent data suggest it could be getting worse. The country is riven by political dissent and has been stained by a major kickback scandal involving the country’s nationalized petroleum concern Petrobras. On March 15 more than a million Brazilians gathered in cities across the country to protest the economic policies of President Dilma Rousseff. A key manufacturing indicator fell into negative territory in February and the currency, the Brazilian Real, fell to an 11-year low last month. But as had been seen in the US during the depths of the recent recession, the market for beauty, personal care and dietary supplement ingredients has shown more resiliency than the overall market.
“The market has been affected by the recent economic situation in general. Companies and investors have been more cautious but the forecast for the beauty and personal care, including the nutraceutical market, is still optimistic for the coming years,” Eduardo Araújo, director of marketing and communications for Gelita Brazil, a division of the multinational ingredient supplier, told NutraIngredients-USA.
Personal care spillover
Brazil has long been noted as an especially vibrant market for cosmetics and personal care products. As the lines between these products and traditional dietary supplement applications continue to blur with the latest trends in sports nutrition and beauty-from-within applications, new opportunities are being created, Araújo said.
“The passion of the Brazilian consumer for beauty and personal care products motivates the industry to keep its investments in launches and innovations. Accordingly to Euromonitor, this market continues to present significant growth rates (two digits) despite inflation, economic slow-down and market saturation in some categories. We've noticed that companies in general have invested more and more in products with higher added value for the Brazilian consumers. This reality shows the consolidation of a trend and present new and fascinating opportunities in the promising beauty from within market,” he said.
Sports nutrition on the rise
As in North America, sports nutrition is coming to the fore as one of the fastest growing segments of the market. Brazilians’ aforementioned devotion to external beauty is now being translated to a commitment to overall fitness to support that external image. Araújo said it’s evident in the way Brazilians are voting with their feet.
“Here in São Paulo, for example, we observe a huge number of new gyms being opened very often in all regions of the city. Sometimes in the same avenue you can find three or four representing different brands and amazingly all of them are crowded. It's a big market and this public, looking for better results and performance, is experimenting with all the options available to achieve a healthier body. This reality gives excellent opportunities for the companies that produce high quality products with accessible prices, specially because people of all ages and both genders are investing in sport nutrition looking for a better life style,” he said.
One of the key ingredient segments within sports nutrition is protein. Araújo said Gelita has been able to ride the sports wave in Brazil with its specialized collagen ingredients.
“Analyzing the animal protein ingredient market, globally egg protein (39%) and the whey protein (27%) are the most popular, followed by casein (14%) and gelatin (12%) where we can also consider collagen (Source: TechNavio Analysis 2013). The three first ingredients mentioned are very well consolidated in the market for decades and gelatin is, in general, one of the most versatile of them, with many applications in so many different segments. However, when we think about the Health and Wellness market, at least in Brazil, collagen is the flavor of the moment and the demand for this ingredient has increased significantly. As we're the only company in this segment that owns specific solutions incollagen peptides for specific needs, all of our ingredients in this category have presented a significant growth during the years,” Araújo said.
The use of dietary supplements is less entrenched in Brazil and in other Latin American countries than it is in North American markets, Araújo said. But even with that and the economic fluctuations that have tended to afflict the various economies from time-to-time, he said the opportunity for overall growth is real and will continue.
“Brazil is a promising market but the economic situation makes all projections very uncertain. This situation also give us new opportunities to develop new products and alliances. Countries as Venezuela, Colombia, Argentina and Chile represents also emerging markets. Some of them, such as Argentina and Venezuela, are facing crises bigger than ours but, even so, are still interesting for investments because the population wants and needs quality products and ingredients. It's a matter of time . . . for decades South American countries have faced difficult periods but, even so, the growth in some special segments, has been maintained, Araújo said.