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    Blog

    Latin America: Opportunities For Healthy Beverages Development

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    Claire Moulin, Departmental Research Analyst, Euromonitor International02.15.12
    When talking about health and wellness, the first regions that come to mind are the U.S., Western Europe and Japan, while less developed markets are being too easily overlooked. However, the demand is there and companies should not miss out on the opportunities. Health and wellness concerns are increasing in Latin America, boosted by an increasing obesity rate. On average, 28% of the population in the region was considered obese in 2011, compared to 21% in 2006. In Mexico, Chile, Venezuela and Guatemala, more than 30% of the population has a body mass index (BMI) over 30.

    A growing middle class is also pushing the boundaries on new product development, and this middle class is interested in healthy food and beverages with something more. Although it is a minority, the high-income population is of substantial size and keen to buy added-value products. The percentage of households with an annual disposable income more than $45,000 (PPP) might seem very low. For example, in Argentina it is 24%—whereas in the U.S. it reaches 63%—but it still represents more than 2 million households. In Venezuela, more than 1 million household are in the highest income segment and are always looking for new products and innovations and are willing to pay the price for it.

    So far there have not been any revolutionary health and wellness developments, but the classic recipes work. Consumers are looking for better-for-you options with fewer calories and more nutrition with added vitamins, minerals and energy. Reduced sugar beverages sales soared by 17% in the region in 2011. That’s faster than any other regions, and it is expected to continue over the next five years with Latin America leading demand for low calorie beverages. Reduced sugar and low calories products are mostly developed in carbonates to stop consumers switching to other soft drinks alternatives (carbonates represent more than half the soft drink consumption in Latin America).

    Another simple way to go is natural: think fruit, think green (but not necessarily organic). On top of superfruits like acai and goji berries, consumers are also looking for naturally healthy alternatives. In Peru, Free Life by Ajeper launched in September 2011 as flavored bottled water with added real lemon and grape juice, naturally containing antioxidants and no added sugar or artificial sweeteners. In Guatemala, it’s also all about natural, with Naturalísimo fruit juice competing with the naturally freshly-made beverages such as lemonade, tamarind juice and cinnamon juice, which are available everywhere. Stevia is also making its way as a natural sweetener in countries like Chile with Basic Blueberry by T-Company.

    Ready-to-drink (RTD) tea is a perfect example of a category that isn’t part of the traditional Latin American diet but has showed great growth over the last five years, as consumers see it as a perfect healthy alternative to quench their thirst. There is an ongoing migration from carbonates as a consequence of general health concern, especially among young consumers. Functional and healthy ingredients such as ginseng are often added to offer the extra “novelty” factor that interests young consumers. Iced green tea products have stocked the shelves in Costa Rica, including local product Dos Pinos Green Tea, which contains green tea extract and is sweetened with Splenda, and international brand Arizona Diet Green tea, which is also available with superfruits acai and pomegranate.
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