In 2012, multinationals remain the market leaders in the Brazil hygiene market, thanks to their greater investment capacity for production increases, aggressive marketing and advertising campaigns, product innovation and strong distribution. In addition, in order to compete with strong regional local brands, they are expanding their national coverage, reaching undeveloped states in the northeast region, where sales are increasing very quickly thanks to rising disposable incomes. Though Johnson & Johnson lost share in 2012, due to divestments in commoditised categories, it is expected to strengthen its position and grow quickly in the coming years. Procter & Gamble and Kimberly-Clark continued the strong share gains seen over the review period in 2012.
Rising disposable income, combined with dropping birth rates, are allowing couples to spend more per child. At the same time, an ageing population is also emerging, boosting sales of tissue and hygiene products and offering great growth potential. As a result of this and the disappointing results of years of price wars, companies are shifting focus and looking to add value to their products. Across the board, both multinational and local players have upped their investments in product innovation, product and packaging design, and segmentation by different types of consumers. Companies have so far been successful with the strategy, which has led to rising prices in most categories.
In Brazil, private label has not seen the same success as in European countries, and private label tissue and hygiene is no exception. Historically, private label has consisted of cheap, low-quality items targeting low-income Brazilians. As branded players have also tended to invest more in the low end of the market, and as consumers across the board prefer to spend their hard-earned money on more trusted brands, there has been little room for private label to expand. However, rising incomes are expected to change consumer behaviour and encourage more risk taking. As a result, private label may find a stronger market niche in the coming years, should retailers be prudent in investments and improvements in quality.
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