CHARLOTTE, NC — Sales of snacks throughout Latin America fell last year because of the pandemic, but the region is showing positive signs of recovery, and innovation continues to rebound. Those are the key points made by Alejandro Prieto and Carlos Ordonez, client business partners, Nielsen IQ, during their presentation on Latin American trends at SNAXPO21, held Aug. 22-24.

“When looking at the economy, last year was really tough for Latin America,” said Mr. Prieto, adding that the region suffered a contraction of 7 points.

In a complex part of the world that consists of 600 million people, however, he stressed that consumers in some countries fared better than others. It all depended on the nation’s economy and how well their governments reacted to the pandemic, especially concerning restrictions on mobility that prompted people to stay at home.

In summarizing the coronavirus (COVID-19) effect on the economy, Mr. Prieto pointed out that 49% Latin American consumers were personally impacted by the pandemic compared to 32% of people globally. Specifically, 36% of Latin Americans surveyed reported that COVID affected their jobs compared to 16% of global respondents.

He noted that the pandemic affected snack volumes in several ways. First, job losses prompted consumers to reduce spending, focusing more on core items instead of discretionary products such as salted snacks.

Second, shoppers found themselves spending more on cleaning supplies for health and safety, further cutting into their snack budgets.

Nielsen’s definition of salted snacks includes such core products as tortilla chips, extruded items, potato chips, popcorn, pretzels and savory biscuits. Mr. Prieto said sales of snacks have stabilized recently and that pretzels, tortilla chips and ready-to-eat popcorn fared the best among the various product categories.

Moreover, he said, smaller manufacturers did better than the larger brands, mainly because these nimble operators understand local tastes and preferences of their consumers better than their major competitors.

Additionally, from a channel perspective, Mr. Prieto said these smaller companies can more effectively serve the traditional trade, which accounts for 50% of food sales and includes more than 3 million mom-and-pop and convenience store outlets, or the equivalent of one shop for every 200 people.

From an innovations’ perspective, Mr. Ordonez pointed out that local taste and affordability are key factors to new products’ success. Overall, local taste accounts for about 37% of the number of innovations globally, but in Latin America, it accounts for 54% of new products.

“That is an eye opener for all of us, and it is something that we need to take into account,” he said.

Mr. Ordonez said another popular snack trend involves promoting the low cost of new products. In Latin America, affordability accounts for 46% of innovation, while it’s only 3% on a global basis.

“This should not dissuade us from innovating here,” he said. “We just need to understand the scope that forces us to develop innovations around affordability.”

Health and wellness is another major trend. However, in addition to protein and plant-based ingredients, an increasing number of countries are now mandating warning “stop” signs on packaging if a product is high in sodium or sugar, or contains trans fats, to name a few.

Mr. Ordonez said the warning signs — first used in Chile and now found in eight countries — have been extremely effective in changing consumer purchasing patterns to switch to healthier products or consume them less frequently. The movement has also spawned a significant number of food manufacturers to reformulate their products in recent years.