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Brazilian Lifestyles 2016: Adapting to the New Normal - Brazil - June 2016

“As Brazil continues to dive deep into a recession and political upheaval, consumers have had to tighten their budgets, making significant changes to their lifestyles and purchasing habits during the last year. While consumer interest in thrift is high, it also holds opportunities for companies to innovate and adjust to consumers’ new demands.”
– Renata Pompa de Moura, Research Manager

This report discusses the following key topics:

  • After the basic, there is not a lot left to half of Brazilians
  • Brazilians are planning purchases more
  • Eating out, technology, and alcoholic drinks: the first to be cut, when times are tough
  • Internet rises as a tool to search for deals

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • After the basic, there is not a lot left to half of Brazilians
            • Figure 1: Financial situation, February 2016
          • Brazilians are planning purchases more
            • Figure 2: Lifestyle changes, February 2016
          • Eating out, technology, and alcoholic drinks: the first to be cut, when times are tough
            • Figure 3: Spending cuts, February 2016
          • Internet rises as a tool to search for deals
            • Figure 4: Interest in thrift, February 2016
          • What we think
          • Brazil Today – What You Need to Know

            • Economic
              • Inflation skyrocketed in 2015
                • Jobs continue to suffer major cuts
                  • Brazilians are aging…
                    • …and having fewer babies
                      • The rise of alternative families
                      • The Economy

                        • Brazilian economy dives deeper into recession
                          • Figure 5: Change in GDP, Brazil, 2010-15
                        • After reaching a peak, inflation is slowing down
                          • Figure 6: Consumer price index (IPCA), annual change, 2002-15
                          • Figure 7: Consumer price index (IPCA), monthly change, April15-April 2016
                        • Layoffs intensify as the recession progresses
                          • Figure 8: Unemployment rate in moving quarters, Brazil, December 2014-March 2016
                          • Figure 9: Creation of job positions in thousands by month, Brazil, March 2015-March 2016
                        • Personal savings declining
                          • High interest rates continue to limit consumption and credit
                            • Figure 10: Selic prime interest rate, annual %, 2012-16
                          • Consumer’s confidence reaches its lowest level
                          • The People

                            • Age structure
                              • Brazilians are living longer lives
                                • Figure 11: Life expectancy at birth, by gender, brazil, 2000-14
                              • Fertility rate
                                • Figure 12: Fertility rate, Brazil, 2000-15
                                • Figure 13: Birth rate (number of births per thousand habitants), Brazil, 2000-15
                              • Marital status
                                • More marriages and more diversity in marriages
                                  • Figure 14: Number of marriage records, Brazil, 2013-14
                                • Graduate degree is a privilege of only 13% of the population
                                • Consumer Expenditure – What You Need to Know

                                  • High inflation drives consumer expenditure
                                    • OTC and pharmaceuticals: Among the fastest growing markets in the next years
                                      • Entertainment and vacations continue to suffer during recession
                                        • Opportunities for healthy food in the in-home category
                                          • Mixed non-alcoholic drinks could help revamp sales during the recession
                                            • The need for convenience drive the household care market
                                              • Income drop and tax rise affect the BPC market
                                                • Higher US dollar can boost local production of clothes and accessories
                                                • Expenditure Overview

                                                  • Sector breakout
                                                    • Figure 15: Consumer expenditure, by sector (R$ billion), 2015
                                                  • Outlook for the next five years
                                                    • Figure 16: Best- and worst-case forecast total value sales, 2010-20
                                                  • Winners in the next five years
                                                    • Figure 17: Fastest-growing market sectors, at current prices, by % growth, 2015-20
                                                  • Slower-growing sectors in the next five years
                                                    • Figure 18: Consumer sectors with weaker growth, at current prices, by % growth, 2015-20
                                                • In-home Food

                                                  • What we think
                                                    • High inflation impacts home food consumption
                                                      • Figure 19: In-home food market size, by value, Brazil, 2010-15
                                                    • Brazilians believe that cooking at home helps to save money
                                                      • Figure 20: Best- and worst-case forecast for in-home food market, at current prices, Brazil, 2010-20
                                                    • Winners for 2016
                                                      • Losers for 2016
                                                        • Key consumer findings
                                                          • Search for health benefits can sustain the consumption of premium foods at home
                                                            • Economic crisis presents opportunity for companies to offer more in-home food solutions
                                                            • Eating Out

                                                              • What we think
                                                                • Economic scenario may be affecting new investments in the sector
                                                                  • Figure 21: Food service market size, by value, Brazil, 2010-15
                                                                • Those exploring convenience can benefit even during the crisis
                                                                  • Figure 22: Best- and worst-case forecast for food service market, at current prices, Brazil, 2010-20
                                                                • Winners for 2016
                                                                  • Losers for 2016
                                                                    • Key consumer findings
                                                                      • Although it is decreasing, Brazilians keep eating out habit
                                                                        • Convenience is still a strong motivator to eat out
                                                                        • Non-alcoholic Drinks

                                                                          • What we think
                                                                            • Inflation and new taxation impact the category
                                                                              • Figure 23: Non-alcoholic drinks market size, by value, Brazil, 2010-15
                                                                            • Mixed drinks offer opportunity for the growth of the category
                                                                              • Figure 24: Best- and worst-case forecast for non-alcoholic drinks market, at current prices, Brazil, 2010-20
                                                                            • Winners for 2016
                                                                              • Losers for 2016
                                                                                • Key consumer findings
                                                                                  • Consumption barriers need to be addressed by the category
                                                                                  • Leisure and Entertainment

                                                                                      • World Cup 2014 helped to organize cities to host more events
                                                                                        • Figure 25: Leisure and entertainment market size, by value, Brazil, 2010-15
                                                                                      • Brazilians looking for low-cost leisure options
                                                                                        • Figure 26: Best- and worst-case forecast for leisure and entertainment market, at current prices, Brazil, 2010-20
                                                                                      • Winners for 2016
                                                                                        • Losers for 2016
                                                                                          • Key consumer findings
                                                                                            • Brazilians are spending more on leisure activities out-of-home
                                                                                              • Cooking at home can become a leisure activity between friends
                                                                                              • Household Care

                                                                                                  • Domestic workers law can be changing the cleaning habits
                                                                                                    • Figure 27: Household care products market size, by value, Brazil, 2010-15
                                                                                                  • Accumulating tasks, Brazilians can buy more efficient products
                                                                                                    • Figure 28: Best- and worst-case forecast for household care products market, at current prices, Brazil, 2010-20
                                                                                                  • Winners for 2016
                                                                                                    • Losers for 2016
                                                                                                      • Key consumer findings
                                                                                                        • Consumers are spending more with cleaning products
                                                                                                        • Alcoholic Drinks at Home and On-premise

                                                                                                          • What we think
                                                                                                            • Alcoholic drinks at home
                                                                                                              • Beer is the main cause of value growth
                                                                                                                • Figure 29: Brazilian alcoholic drinks at home expenditure, 2010-15
                                                                                                              • Increased taxes on all alcoholic beverages will push value sales up
                                                                                                                • Figure 30: Best- and worst-case forecast for alcoholic drinks at home expenditure, at current prices, 2010-20
                                                                                                            • Alcoholic Drinks On-premise

                                                                                                              • High temperatures, Carnival, and the World Cup helped push sales in the on-premise sector
                                                                                                                • Figure 31: Brazilian alcoholic drinks on-premise expenditure, 2010-15
                                                                                                              • Restaurants and bars should promote beverages’ qualities to push sales
                                                                                                                • Figure 32: Best- and worst-case forecast for alcoholic drinks on-premise expenditure, at current prices, 2010-20
                                                                                                              • Winners for 2016
                                                                                                                • Losers for 2016
                                                                                                                  • Key consumer findings
                                                                                                                    • Consumers cut spending on alcoholic beverages in tough times
                                                                                                                      • Beer presents the highest consumption among alcoholic drinks
                                                                                                                        • Perceptions of premium products
                                                                                                                        • Transport

                                                                                                                          • What we think
                                                                                                                            • The transport market has seen robust growth
                                                                                                                              • Figure 33: Brazilian transport expenditure, 2010-15
                                                                                                                            • Uncertainties in the economy are highly affecting the sales of new cars
                                                                                                                              • Figure 34: Best- and worst-case forecast for transport expenditure, at current prices, 2010-20
                                                                                                                            • Winners for 2016
                                                                                                                              • Losers for 2016
                                                                                                                                • Key consumer findings
                                                                                                                                  • Price and worries about the environment are key for the electric car sector
                                                                                                                                    • Companies should help consumers alleviate traffic issues
                                                                                                                                    • Technology and Communications

                                                                                                                                      • What we think
                                                                                                                                        • The technology and communications market has benefited from a tax break
                                                                                                                                          • Figure 35: Brazilian technology and communications expenditure, 2010-15
                                                                                                                                        • Consumers are likely to take longer to exchange old products, slowing growth
                                                                                                                                          • Figure 36: Best- and worst-case forecast for technology and communications expenditure, at current prices, 2010-20
                                                                                                                                        • Winners for 2016
                                                                                                                                          • Losers for 2016
                                                                                                                                            • Key consumer findings
                                                                                                                                              • Consumers have deprioritized spending on technology
                                                                                                                                                • Use of instant messaging apps is popular among Brazilians
                                                                                                                                                  • E-commerce still needs improvement
                                                                                                                                                  • Personal Finance and Housing

                                                                                                                                                    • What we think
                                                                                                                                                      • Increased taxes and utility bills boosted growth
                                                                                                                                                        • Figure 37: Brazilian personal finance and housing expenditure, 2010-15
                                                                                                                                                      • Higher interest rates will drive future growth
                                                                                                                                                        • Figure 38: Best- and worst-case forecast for personal finance and housing expenditure, at current prices, 2010-20
                                                                                                                                                      • Winners for 2016
                                                                                                                                                        • Losers for 2016
                                                                                                                                                          • Key consumer findings
                                                                                                                                                            • Consumers are getting savvier
                                                                                                                                                              • Rise in utility bills is one of the main reasons leading to changes in purchasing habits
                                                                                                                                                                • Consumers are relying more on credit cards
                                                                                                                                                                • Beauty and Personal Care

                                                                                                                                                                  • What we think
                                                                                                                                                                    • Strong market slowdown marks 2015
                                                                                                                                                                      • Figure 39: Retail sales of beauty and personal care products in Brazil, by value, 2010-15
                                                                                                                                                                    • The market will keep growing in a moderate path
                                                                                                                                                                      • Figure 40: Best- and worst-case forecast for beauty and personal care, at current prices, Brazil, 2010-20
                                                                                                                                                                    • Winners for 2016
                                                                                                                                                                      • Losers for 2016
                                                                                                                                                                        • Key consumer findings
                                                                                                                                                                          • Brazilians have been spending less with cosmetics since 2015
                                                                                                                                                                            • ‘Do It Yourself’ can be a way out for consumers in times of crisis
                                                                                                                                                                            • OTC and Pharmaceuticals

                                                                                                                                                                              • What we think
                                                                                                                                                                                • Increased pollution levels and aging population contribute to the retail sales of pharmaceutical products
                                                                                                                                                                                  • Figure 41: Retail sales of OTC and prescription medicines in Brazil, by value, 2010-15
                                                                                                                                                                                • Pharmaceutical industry can benefit from diseases such as swine flu
                                                                                                                                                                                  • Figure 42: Best- and worst-case forecast for OTC and prescription medicines, at current prices, Brazil, 2010-20
                                                                                                                                                                                • Winners for 2016
                                                                                                                                                                                  • Losers for 2016
                                                                                                                                                                                    • Key consumer findings
                                                                                                                                                                                      • Elderly people contribute to the sales of prescription medicines
                                                                                                                                                                                        • Internet can be an option to buy cheaper medicines
                                                                                                                                                                                        • Home and Garden

                                                                                                                                                                                          • What we think
                                                                                                                                                                                            • Home appliances sector was one of the most affected by the recession
                                                                                                                                                                                              • Figure 43: Retail sales of home and garden products in Brazil, by value, 2010-15
                                                                                                                                                                                            • Rising prices of steel can complicate sales of home and garden items
                                                                                                                                                                                              • Figure 44: Best- and worst-case forecast for home and garden items, at current prices, Brazil, 2010-20
                                                                                                                                                                                            • Winners for 2016
                                                                                                                                                                                              • Losers for 2016
                                                                                                                                                                                                • Key consumer findings
                                                                                                                                                                                                  • Brands can do online promotions to avoid stagnation
                                                                                                                                                                                                    • Sharing home appliances can be an opportunity for singles
                                                                                                                                                                                                    • Clothing and Accessories

                                                                                                                                                                                                      • What we think
                                                                                                                                                                                                        • Clothing and accessories sector suffers with the crisis
                                                                                                                                                                                                          • Figure 45: Retail sales of clothing and accessories in Brazil, by value, 2010-15
                                                                                                                                                                                                        • Brands must take advantage from a higher US dollar and the imports fall
                                                                                                                                                                                                          • Figure 46: Best- and worst-case forecast for clothing and accessories, at current prices, Brazil, 2010-20
                                                                                                                                                                                                        • Winners for 2016
                                                                                                                                                                                                          • Losers for 2016
                                                                                                                                                                                                            • Key consumer findings
                                                                                                                                                                                                              • Brazilians are buying less clothing, accessories, and footwear
                                                                                                                                                                                                                • Brands could target single consumers and do promotions
                                                                                                                                                                                                                • Vacations

                                                                                                                                                                                                                  • What we think
                                                                                                                                                                                                                    • Economic instability makes consumers postpone travels
                                                                                                                                                                                                                      • Figure 47: Retail sales of the vacations market in Brazil, by value, 2010-15
                                                                                                                                                                                                                    • Higher US dollar will keep affecting airlines in 2016
                                                                                                                                                                                                                      • Figure 48: Best- and worst-case forecast for the vacations market, at current prices, Brazil, 2010-20
                                                                                                                                                                                                                    • Winners for 2016
                                                                                                                                                                                                                      • Losers for 2016
                                                                                                                                                                                                                        • Key consumer findings
                                                                                                                                                                                                                          • Brazilians are trying to spend less with travels
                                                                                                                                                                                                                            • Family travel packages could boost tourism in Brazil
                                                                                                                                                                                                                            • Miscellaneous Expenditure

                                                                                                                                                                                                                              • What we think
                                                                                                                                                                                                                                • Spending on education and private health are reduced
                                                                                                                                                                                                                                  • Figure 49: Retail sales of the miscellaneous expenditure sector in Brazil, by value, 2010-15
                                                                                                                                                                                                                                • Unemployment will keep affecting the health sector
                                                                                                                                                                                                                                  • Figure 50: Best- and worst-case forecast for miscellaneous expenditure, at current prices, Brazil, 2010-20
                                                                                                                                                                                                                                • Winners for 2016
                                                                                                                                                                                                                                  • Losers for 2016
                                                                                                                                                                                                                                    • Key consumer findings
                                                                                                                                                                                                                                      • Lower income leads consumers to do more services by their own
                                                                                                                                                                                                                                        • Distance learning encourages the Brazilian population
                                                                                                                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                                                                                                                          • The recession is making the gender gap more evident
                                                                                                                                                                                                                                            • Consumers over 55 are more likely to have a tight financial situation
                                                                                                                                                                                                                                              • Cooking at home: an alternative for many to save
                                                                                                                                                                                                                                                • Health and house cleaning products the least likely to be cut
                                                                                                                                                                                                                                                  • Reusable packaging is more appealing to young consumers
                                                                                                                                                                                                                                                    • The recession creates opportunities for private labels
                                                                                                                                                                                                                                                    • Current Financial Situation

                                                                                                                                                                                                                                                      • After the basics, there is not a lot left for half of Brazilians
                                                                                                                                                                                                                                                        • Figure 51: Financial situation, February 2016
                                                                                                                                                                                                                                                      • North-East the least likely to be healthy, most likely to be tight
                                                                                                                                                                                                                                                        • Figure 52: Financial situation, by region, February 2016
                                                                                                                                                                                                                                                      • Men have a better financial situation than women
                                                                                                                                                                                                                                                        • Figure 53: Financial situation, by gender, February 2016
                                                                                                                                                                                                                                                      • Consumers over 55: the most likely to have a tight financial situation
                                                                                                                                                                                                                                                        • Figure 54: Healthy and tight financial situation, by age group, February 2016
                                                                                                                                                                                                                                                    • Lifestyle Changes

                                                                                                                                                                                                                                                      • Brazilians are planning more of their purchases
                                                                                                                                                                                                                                                        • Figure 55: Lifestyle changes, February 2016
                                                                                                                                                                                                                                                      • DIY: More common in the South and South-East
                                                                                                                                                                                                                                                        • Figure 56: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber)” by region, February 2016
                                                                                                                                                                                                                                                        • Figure 57: Agreement with the statement “I am doing more DIY (eg repairs) myself rather than hiring a professional (eg builder, plumber),” by gender, February 2016
                                                                                                                                                                                                                                                      • Consumers aged 25-34: cooking more at home to save
                                                                                                                                                                                                                                                          • Figure 58: Agreement with the statement “I try to cook more at home instead of eating out,” by age group, February 2016
                                                                                                                                                                                                                                                        • Free activities are attracting more ABC1
                                                                                                                                                                                                                                                          • Figure 59: Agreement with the statement “I choose to do more free activities rather than paid for ones (eg exercise in park versus gym),” by socioeconomic group, February 2016
                                                                                                                                                                                                                                                        • Installment payments are becoming less popular
                                                                                                                                                                                                                                                        • Spending Cuts

                                                                                                                                                                                                                                                          • Eating out, technology, and alcoholic drinks: the first to be cut, when times are though
                                                                                                                                                                                                                                                            • Figure 60: Spending cuts, February 2016
                                                                                                                                                                                                                                                          • Cleaning and health products the least likely to be cut
                                                                                                                                                                                                                                                            • Southern consumers: The most likely to cut premium food
                                                                                                                                                                                                                                                              • Figure 61: Spending cuts, premium food, by region, February 2016
                                                                                                                                                                                                                                                          • Interest in Thrift

                                                                                                                                                                                                                                                            • Internet rises as a tool to search for deals
                                                                                                                                                                                                                                                              • Figure 62: Interest in thrift, February 2016
                                                                                                                                                                                                                                                            • Reusable packaging is more appealing to young consumers
                                                                                                                                                                                                                                                              • Figure 63: Agreement with the statement “Buying products with reusable packaging,” by age group, February 2016
                                                                                                                                                                                                                                                            • Young males also more likely to buy used appliances
                                                                                                                                                                                                                                                              • Figure 64: Agreement with the statement “Buying used appliances rather than brand new ones,” by gender and age group, February 2016
                                                                                                                                                                                                                                                            • The need to save provides opportunities for private label products
                                                                                                                                                                                                                                                              • Sharing services more likely to be seen as an alternative for ABs to save
                                                                                                                                                                                                                                                                • Figure 65: Agreement with the statement “Sharing services such as carpooling,” by socioeconomic group, February 2016
                                                                                                                                                                                                                                                            • Appendix – Methodology, Abbreviations, and Supporting Information

                                                                                                                                                                                                                                                              • Methodology
                                                                                                                                                                                                                                                                • Fan chart forecast
                                                                                                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                                                                                                  • Appendix – Expenditure Overview

                                                                                                                                                                                                                                                                      • Figure 66: Best- and worst-case forecast for total consumer expenditure, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – In-home Food

                                                                                                                                                                                                                                                                      • Figure 67: Best- and worst-case forecast for in-home food, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Foodservice

                                                                                                                                                                                                                                                                      • Figure 68: Best- and worst-case forecast for foodservice, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Non-alcoholic Drinks

                                                                                                                                                                                                                                                                      • Figure 69: Best- and worst-case forecast for non-alcoholic drinks, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Alcoholic Drinks

                                                                                                                                                                                                                                                                      • Figure 70: Best- and worst-case forecast for alcoholic drinks at home, 2015-20
                                                                                                                                                                                                                                                                      • Figure 71: Best- and worst-case forecast for alcoholic drinks on-premise, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Beauty and Personal Care

                                                                                                                                                                                                                                                                      • Figure 72: Best- and worst-case forecast for beauty and personal care, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – OTC and Pharmaceuticals

                                                                                                                                                                                                                                                                      • Figure 73: Best- and worst-case forecast for OTC and pharmaceuticals, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Clothing and Accessories

                                                                                                                                                                                                                                                                      • Figure 74: Best- and worst-case forecast for clothing and accessories, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Household Care

                                                                                                                                                                                                                                                                      • Figure 75: Best- and worst-case forecast for household care, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Technology and Communications

                                                                                                                                                                                                                                                                      • Figure 76: Best- and worst-case forecast for technology and communications, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Leisure and Entertainment

                                                                                                                                                                                                                                                                      • Figure 77: Best- and worst-case forecast for leisure and entertainment, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Home and Garden

                                                                                                                                                                                                                                                                      • Figure 78: Best- and worst-case forecast for home and garden, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Transport

                                                                                                                                                                                                                                                                      • Figure 79: Best- and worst-case forecast for transport, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Holidays

                                                                                                                                                                                                                                                                      • Figure 80: Best- and worst-case forecast for holidays, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Personal Finance and Housing

                                                                                                                                                                                                                                                                      • Figure 81: Best- and worst-case forecast for personal finance, 2015-20
                                                                                                                                                                                                                                                                  • Appendix – Miscellaneous Expenditure

                                                                                                                                                                                                                                                                      • Figure 82: Best- and worst-case forecast for miscellaneous expenditure, 2015-20

                                                                                                                                                                                                                                                                  Companies Covered

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                                                                                                                                                                                                                                                                  Brazilian Lifestyles 2016: Adapting to the New Normal - Brazil - June 2016

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