Covid-19's Impacts on Brazilian Coffee Demand: What We Expect From Consumers and the Industry
Expectations for Brazilian coffee demand in 2020 changed as the impact of restrictions associated with the response to the pandemic weighed on consumption.
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“The on-premise channel was hit much harder than the off-premise, as reflected in the nominal revenues of total foodservice, which plummeted by 53.8% from March to October 2020, while the nominal revenues of supermarkets rose by 16.9% in the same period,” according to Guilherme Morya, Senior Analyst – Beverages.
Currently, Rabobank forecasts Brazilian demand at 20.6 million bags in 2019/20, 0.5% lower than last season and a recovery of 0.5% for the 2020/21 cycle.
Independent coffee shops and quick-service restaurants were more impacted, especially those with limited offerings. “The uncertainties in the landscape should limit new investments in this segment until a definitive solution to the pandemic is found,” says Morya.
However, the long-term trends haven’t changed. Despite the challenging outlook, the environment remains interesting for new investments – not only for M&A but also for new premium products and e-commerce.