QUARTER BY NUMBERS. LATAM AT A GLANCE Regional trends & consumer sentiment Looking through Latin America s FMCG lens

Transcription

1 LATIN AMERICA QUARTER BY NUMBERS Q LATAM AT A GLANCE Regional trends & consumer sentiment Looking through Latin America s FMCG lens COUNTRY SNAPSHOT A local perspective of Latin American markets BRAZIL CHILE MEXICO COLOMBIA PERU ARGENTINA COSTA RICA IN THE INDUSTRY Nielsen Thought Leadership 1

2 Tradingeconomics.com LATAM AT A GLANCE The Latin American growth challenge continues, in 2015 our economy slowed down due to oil prices, the reductions of exportations to China, high levels of corruption and devaluation rates in most countries, reducing consumer confidence throughout the region. ECONOMIC PULSE OF CONSUMERS AROUND LATAM The Nielsen Consumer Confidence Index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively. CONSUMER CONFIDENCE INDEX Q2'16 Q2'16 vs. Q1'16 GDP (annual % growth) Inflation Rate BRAZIL MEXICO CHILE ARGENTINA Inflation Rate GDP (annual % growth) Q2'16 vs. Q1'16 Q2' COLOMBIA ,4* 38,6* COSTA RICA PERU Peru and Colombia are the bright spots of consumer confidence fuelled by strong GDP growth. Important to highlight that after 6 quarters of a decreasing, Consumer Confidence Index in Brazil, this is now stable this quarter and despite Mexican loss of confidence, GDP growth is still positive. * Consumer Confidence Costa Rica, measured by Universidad de Costa Rica CONSUMER CONFIDENCE INDEX 2

3 Tradingeconomics.com LATAM AT A GLANCE CONSUMER SENTIMENTS IN LATAM WHAT ARE THE TOP 3 CONCERNS IN THE NEXT SIX MONTHS? TYPE OF CONCERN 70% 60% Crime The economy Job security 50% 40% 30% 20% 10% 0% LATAM BR MX AR CO CL PE ACTIONS TO SAVE ON HOUSEHOLD EXPENSES TOP 3 ACTIONS HAVE THEY TAKEN TO SAVE MONEY 70% 60% 50% 40% 30% LATAM BR MX AR CO CL PE Switch to cheaper grocery brands Spend less on new clothes Cut down on out-of-home entertainment Latin Americans have registered the highest record of switching to cheaper grocery brands since 2014, pushed by Argentina (68%) and Colombia (54%) which presented the highest percentage in the last two years. 3

4 LATAM AT A GLANCE LOOKING THROUGH LATIN AMERICA S FMCG LENS FAST MOVING CONSUMER GOODS MARKET DYNAMICS (Weighted Global Growth Reporter) Latin America MAM'15 MJJ'15 JAS'15 SON'15 NDJ'16 JFM'16 7.0% 6.6% 6.4% 1.4% 5.8% 0.5% 1.8% 1.1% 6.7% 1.1% 7.3% 1.2% 5.1% 5.2% 5.2% 5.4% 5.7% 6.1% Unit Value Change Volume Change Nominal Value Growth WHERE ARE THE FMCG GROWTH OPPORTUNITIES? MEXICO: +3.5% HONDURAS: +4.2% GUATEMALA: +4.5% EL SALVADOR: -1.5% NICARAGUA: +6.5% COSTA RICA: +2.0% PANAMA: +4.5% COLOMBIA: +3.3% PERU: +6.3% BRAZIL: -3.4% CHILE: +2.7% % Volume Growth AMJ 16 vs. AMJ 15 Avg. volume growth below vs. last period Avg. volume growth above vs. last period ARGENTINA: -7.1% 4

5 BRAZIL SNAPSHOT Brazil is facing one of the most severe recessions in its history; economic activity will continue to weaken while the political environment remains turbulent. We expect GDP to decrease around 3.0% in 2016 and then rebound 0.9% in Inflation slowdown and current account improvement will bring some relief, while fiscal concerns will continue. LUIS ARJONA CLUSTER LEADER BRAZIL & CHILE Brazil s unemployment rate rose in June to its highest in nearly five years, eroding consumer confidence about job prospects over the next 12 months 81% considered that job prospects to be bleak. In addition, core inflation rate increased 7.7% in June of 2016 over the same month in the previous year according to Banco Central do Brazil and consumers took measures to maintain their basic needs 63% of Brazilians saved on out of home entertainment and 60% tried to save on gas and electricity. Meanwhile, 47% are seeking ways to save money in their grocery shopping, that s why manufacturers must re-think their price point strategy (considering low price points value for money) and be thoughtful about channel changes (Brazilian consumers are doing more of their grocery shopping in discount and Cash & Carry formats fast growing channels), manufacturers must offer alternative packages, exclusive sku s or cheaper brands. COUNTRY HIGHLIGHTS ECONOMY WATCH NIELSEN CONSUMER CONFIDENCE INDEX Forecast Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM Brazil 5

6 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING JUN 16 VS. YEAR ENDING JUN 15 RY AMJ'15 RY AMJ'16 AMJ'16 6.9% 8.7% 9.6% 7.5% 0.6% 5.1% 4.9% -3.4% -3.2% % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume sales have reduced its contraction rate in spite of price increases TOTAL BRAZIL CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 33% TOTAL BRAZIL -2.3% MODERN TRADE -4.7% 67% OTHER CHANNELS 3.1% 5.9% According to our last Global Survey Retail Growth Strategies, Brazilians usually like to shop, 75% of them said that enjoy shopping for groceries (vs. 57% of LatAm). Freshness (68%) and lower prices (64%) are the main reasons for them to shop at a particular retailer. 6

7 TOTAL BRAZIL BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES SWEET SNACKS SALTY SNACKS BEVERAGES ALCOHOLIC BEV. PERSONAL CARE HOUSEHOLD CARE -3.2% -2.3% -1.2% -1.2% -7.1% -4.7% -1.8% -3.0% 1.5% 1.8% 4.9% 3.9% 6.8% 5.9% 8.3% 6.0% 9.7% 6.3% 8.1% 7.2% 9.3% 6.8% 9.4% Facing the current economic situation, 29% of Brazilians saved money via cutting down on or buy cheaper brands of alcohol TOTAL BRAZIL PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 32% 21% Low Price TOTAL FMCG 5.1% 7.7% Medium Price 1.2% 47% Premium Price 7.6% 47% of Brazilians, are switching to cheaper grocery brands in order to save money, however healthy segment (which is expensive) remains with superior growth (+8.2% in value sales) 7

8 CHILE SNAPSHOT In contrast to the rest of Latin America, the Chilean economy has maintained a sustained growth in the last few years, however; in 2015 Chile has faced an economic deceleration because of the drop in copper prices. BRUCE MARTIN MARKET LEADER CHILE In addition, multiple scandals of political corruption and a slight increase in the unemployment rates (6.9% in June), generated a moderate GDP forecast for 2016 (1.6%), and recently economists have reduced the economic perspectives for (Around 3.5%). Chileans are confident about future economy prospects for their country 74% think that they are in an economic recession at this moment and 46% think that their country will be out of the recession in the next 12 months. However, consumers are worried about their personal finances 46% consider that their personal finances will not be positive in the next 12 months, 70% declared that is not a good moment to buy things that they want or need and 53% have decided to switch to cheaper grocery brands. In addition, consumer debt has increased by 5% last year 12% declared that debt is their biggest worry, compared to 7% in Latin America and they are not confident about their job prospects over the next 12 months 78% think that are bleak. COUNTRY HIGHLIGHTS ECONOMY WATCH Forecast NIELSEN CONSUMER CONFIDENCE INDEX Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM Chile 8

9 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING JUN 16 VS. YEAR ENDING JUN 15 RY AMJ'15 RY AMJ'16 AMJ'15 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16 7.2% 8.4% 8.0% 5.1% 9.4% % % 7.0% 6.5% 8.5% 8.6% 9.1% 8.5% 5.9% % 1.1% 2.7% 1.1% 1.2% 1.9% 2.5% 2.8% 2.7% 2.7% % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL CHILE CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 1.5% 43% 57% MODERN TRADE 5.5% 5.9% OTHER CHANNELS 11.4% According to our last Global Survey, 35% (vs. 32% LatAm) of Chilean consider as a main reason for the shopping trip the stock up on food or household essentials 9

10 TOTAL CHILE BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES DAIRY SNACKS & SWEETS BEVERAGES ALCOHOLIC BEV. PERSONAL CARE HOUSEHOLD CARE -2.9% 2.7% 2.9% 0.4% 5.0% 2.2% 5.4% 1.5% 8.0% 5.9% 3.6% 7.3% 8.1% 6.0% 12.1% 11.8% 5.4% 3.2% 3.2% 6.8% 5.7% 6.2% 6.7% 9.4% Food preparation categories and premium offerings in home care have driven growth TOTAL CHILE PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 29% 18% TOTAL FMCG 8.0% Low Price 9.7% Medium Price 5.5% 53% Premium Price 11.7% According to our last Global Survey, 43% of Chilean are willing to pay a premium price, if the product provides superior function or performance and 49% if contains organic or natural ingredients 10

11 MEXICO SNAPSHOT Despite external factors such as oil price decrease, USD exchange rate increase and internal political corruption scandals have influenced in the modest expansion of Mexico's economy during the second quarter of 2016 (2.4%). Mexicans feel that their country is in a recession (82%) and 55% declared that the country most likely won t be out of the recession within the next 12 months. ARMANDO URIEGAS GENERAL DIRECTOR MEXICO Controlled levels of inflation rate (2.5% - July), employment generation and significant rise of remittances (8.58% 1st. Quarter) influenced by exchange rate increase have favored the internal consumption during the first semester, as a result and according to the National Association of Supermarkets (ANTAD), retail sales grew 8.6% in June. However and according to Armando Uriegas Positive indicators start changing and we have recently begun to see some deceleration signals, particularly in household, beauty and personal care products which are the first categories to be affected by an adverse economic climate. Also increasing exchange rates have forced manufacturers to increase their prices; this situation can lead to a consumption contraction. Manufacturers must be strategic in their implementation of price points to help small budgets and value for money proposals, for those who can pay more for bigger sizes and be thoughtful about innovation. I think that this will be key for companies to make smart decisions in order to close a successful 2016 and set the basis to guarantee their success next year, it is likely the country will register further decrease in the economy of 2017, which undoubtedly will impact consumption Armando Uriegas. COUNTRY HIGHLIGHTS ECONOMY WATCH NIELSEN CONSUMER CONFIDENCE INDEX Forecast Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM México Mexico 11

12 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING ON JUN 16 VS. YEAR ENDING ON JUN 15 RY AMJ'15 RY AMJ'16 AMJ'15 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16 6.9% 6.6% 6.9% 6.1% 5.3% 5.4% 5.5% 5.7% 4.2% 3.6% 3.5% % 2.6% 2.7% 2.9% 3.2% 3.6% 1.5% 3.5% 1.9% 2.7% 3.0% 3.1% 3.4% 3.6% 3.5% % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL MEXICO CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 60% 40% MODERN TRADE OTHER CHANNELS 2.9% 4.0% 6.5% 7.1% According to our last Global Survey, 35% (vs. 34% LatAm) of Mexican consider as a main reason for the shopping trip to buy a few essential items 12

13 TOTAL MEXICO BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES BEVERAGES PHARMACIES SNACKS & SWEETS PERSONAL CARE DAIRY HOUSEHOLD CARE 3.5% 1.3% 6.0% 4.2% 4.3% 1.0% 4.4% 2.2% 6.9% 4.6% 8.9% 6.7% 9.1% 4.6% 6.5% 6.2% 3.6% 3.4% 3.4% 2.6% 4.0% 3.7% 2.0% 4.0% Food preparation categories and premium offerings in home care have driven growth TOTAL MEXICO PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 24% 16% TOTAL FMCG 6.9% Low Price 5.2% Medium Price 8.6% 60% Premium Price 3.9% 46% of Mexican, are switching to cheaper grocery brands in order to save money, while generic brands are growing 10.4% because of diversify their product assortment 13

14 COLOMBIA SNAPSHOT Recent price increases, potential tax reforms and political themes such as the possible peace agreement have provided Colombians with a perception of an internal crisis 79% think that their country in an economic recession at this moment and 55% think that the crisis will not end within the next 12 months. JUAN FELIPE SAAVEDRA GENERAL DIRECTOR COLOMBIA However, Colombians have shown better levels of consumer confidence than Latin America as a whole and they are more positive about their finances 63% thinks that their personal finances will be good or excellent in the next 12 months that s why we can observe positive results in FMCG measured by Nielsen. According to Juan Felipe Saavedra Despite price increases, most categories were stable, driven by beverages which represent 60% of total growth in the last period; in part the El Niño phenomena and partly because they were less affected by inflation. In the next quarter we expect a slowdown of beverage consumption due to the rainy season and a discreet positive trend will continue in food, personal care and household products. We anticipate that the final balance of 2016 is slightly higher than COUNTRY HIGHLIGHTS ECONOMY WATCH NIELSEN CONSUMER CONFIDENCE INDEX Forecast Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM Colombia 14

15 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING ON JUN 16 VS. YEAR ENDING ON JUN 15 RY AMJ'16 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16 TOTAL BASKET 8.2% 8.7% 5.9% 7.1% 8.7% 5.2% 5.3% 6.0% 5.4% 5.9% 4.7% % 3.3% 3.3% 2.7% 2.4% 2.5% 2.8% 3.3% 3.3% % Variation in Volume Sales % Variation in Value Sales % Variation in Price Source: Nielsen Retail Index Value in Local Currency - Variation in volume pondered by value share 130 categories FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL COLOMBIA CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 1.3% 25% MODERN TRADE 4.0% 75% OTHER CHANNELS 8.3% 8.8% According to our last Global Survey, 36% (vs. 34% LatAm) of Colombian consider as a main reason for the shopping trip to buy a few essential items 15

16 TOTAL COLOMBIA BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES -0.5% 3.3% 8.7% 8.6% 5.9% 9.4% BEVERAGES 6.8% 10.8% 4.5% SALTY SNACKS 2.2% 8.8% 6.5% PERSONAL CARE 1.2% 7.3% 6.2% HOUSEHOLD CARE 0.6% 6.0% 5.7% MISCELANEOUS 2.3% 6.0% Food preparation categories and premium offerings in home care have driven growth TOTAL COLOMBIA PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 26% 15% TOTAL FMCG 8.7% Low Price 10.9% Medium Price 7.1% 59% Premium Price 11.3% According to our last Global Survey, 56% of Colombian are willing to pay a premium price, if the product provides superior function or performance and 53% if contains organic or natural ingredients 16

17 EMERGING MARKETS Emerging Markets represent 23% of Latin American GDP growing at an average of 0.6% (1.5% w/o Venezuela). With more than 190 Million consumers, these countries are a mixture of realities, challenges and opportunities. MARTHA GIRALDO CLUSTER LEADER EMERGING MARKETS Last year we observed wide contrasts between countries, while Venezuela and Argentina are facing severe recessions with high inflation rates, volatile political and economic situations, which where reflected in their FMCG evolution, countries such as Peru have plenty of opportunities FMCG are growing 6.4% in volume sales vs. last rolling year. Central America and The Caribbean have shown higher than average volume rates compared to the rest of Latin America, because this area has been less affected by falling oil prices and other raw materials. This average is the result of various countries with positive views, while we see some negative trends, in many cases related to the socioeconomic context and issues of violence. According to Alvaro Navarro, Market Leader of Central America and Caribbean, On the positive side, we have found growing behaviors in Dominican Republic, Panama and Nicaragua, in these countries there is macroeconomic growth and political stability. In addition, these countries are the least affected by the phenomena of violence which other Central American countries have faced. Costa Rica and Honduras have shown a recovery in their basket after previous periods of decline. On the negative spectrum we have two countries which are: El Salvador, where consumers are worried mainly by issues of violence and extortion caused by gangs (Maras) and also Puerto Rico, whose long economic crisis has been exacerbated by issues of migration and default on its public debt. Finally, Guatemala, which has also had issues of violence showed a growth in the basket but this is now beginning to decelerate. 17

18 PERU SNAPSHOT ANDRÉFRENK MARKET LEADER PERU Peru is a bright spot in the region, with more than 30 million people and one of the highest forecasts of GDP Growth (3.6%). Peruvians are positive about their future and are more optimistic than ever after the election period, the new government is committed to generate new ways of long term economic growth, and therefore the uncertainty has been reduced. In addition, inflation levels (0,14% the 2nd lowest inflation rate in 2016) have reduced product s price perception and favoring the positive performance of FMCG sales Increasing 6.4% in volume sales in the last rolling year. We are still positive about the growth expectations, lead by Traditional Trade sales increasing in more moderate rates. André Frenk (Market Leader of Peru and Ecuador). COUNTRY HIGHLIGHTS ECONOMY WATCH NIELSEN CONSUMER CONFIDENCE INDEX Forecast Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM Peru Perú 18

19 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING ON JUN 16 VS. YEAR ENDING ON JUN 15 RY AMJ'15 RY AMJ'16 OND'15 DEF'16 FMA'16 AMJ'16 5.3% 5.1% 4.9% 5.3% 5.4% 5.1% 1.6% 3.6% 6.3% -1.1% 2.3% 0.2% 2.4% 2.7% 3.9% 5.2% 5.6% 4.5% % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL PERU CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 1.0% 30% MODERN TRADE 6.4% 70% 3.4% OTHER CHANNELS 5.9% According to our last Global Survey, 54% of Peruvian, are switching to cheaper grocery brands in order to save money, while generic brands are growing 7.1% 19

20 TOTAL PERU BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG 4.5% 5.1% 2.7% PERISHABLES 2.7% 3.3% 0.8% BEVERAGES 14.1% 11.6% 3.4% SWEET SNACKS -3.7% 0.0% 3.9% PERSONAL CARE 0.9% 2.7% 2.2% HOUSEHOLD CARE 3.9% 10.2% 6.3% Food preparation categories and premium offerings in home care have driven growth TOTAL PERU PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 24% 17% TOTAL FMCG 5.1% Low Price 8.3% Medium Price 0.8% 59% Premium Price 15.1% According to our last Global Survey, 43% of Peruvian are willing to pay a premium price if the product provides superior function or performance and 49% if contains organic or natural ingredients 20

21 ARGENTINA SNAPSHOT The current economic model continues to affect the decreasing purchasing power of Argentineans, consumers are therefore trying to rebalance their budgets taking into account high rate hikes in public services which have exceed 500%, increases in fuel prices (over 30% in four months) and with other hikes such as prepayments, private schools, building maintenance and other services. 17% of Argentinians stated that a primary concern for the following 6 months was an increase in food prices and 13% increasing utility prices Highest results in the region. RAFAEL GOUIRAN MARKET LEADER ARGENTINA With Insufficient wages of workers, together with the expulsion of vast sectors of formal employment, the product of layoffs has led to a considerable reduction in consumption of both durable goods and basic food products, which is why consumer confidence index reflects a decrease of 4 points vs. last quarter (71 points) which is the lowest in the Region. Consumers are also holding off making purchases for the moment 84% considers that this is not the right time to buy what they would like. With all of this economic uncertainty consumers are making dramatic changes in order to save money, these changes include: 68% have switched to cheaper brands, 59% try to save on gas and electricity and 50% have cut down on out of home entertainment and take away meals, according to Rafael Gouiran (Market Leader of South Emerging Argentina, Uruguay, Bolivia y Paraguay) The second quarter has had the greatest shrinkage in consumption. With a general feeling of anxiety regarding job permanence and also timely in GBA, with an adjustment of utility tariff has caused consumers to rethink their spending. COUNTRY HIGHLIGHTS ECONOMY WATCH Forecast NIELSEN CONSUMER CONFIDENCE INDEX Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2' Inflation, consumer prices (annual %) GDP growth (annual %) LATAM Argentina 21

22 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR TO DATE ENDING ON JUN 16 VS. YEAR TO DATE ENDING ON JUN 15 YTD'16 ASO'15 OND'15 DEF'16 FMA'16 AMJ' % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL ARGENTINA CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (YTD AS 16 VS. YTD AS 15) % MODERN TRADE % OTHER CHANNELS According to our last Global Survey, 34% (vs. 32% LatAm) of Argentine consider as a main reason for the shopping trip the stock up on food or household essentials 22

23 TOTAL ARGENTINA BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (YTD 16 VS YTD 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES BEVERAGES PERSONAL CARE HOUSEHOLD CARE Food preparation categories and premium offerings in home care have driven growth TOTAL ARGENTINA PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 32% 21% Low Price TOTAL FMCG 33.9% 32.1% Medium Price 31.7% 47% Premium Price 38.5% If raw material costs rose substantially for a manufacturer of food or personal care products 23% of Argentine prefer that manufacturers introduce new, smaller pack sizes at lower prices and 26% Offer larger economy sizes with lower price per usage/serving 23

24 COSTA RICA SNAPSHOT Although in the last six months the consumer confidence had been improving, according to the latest survey by the Costa Rica University, which reported a slight decrease to 38.6%, compared with the previous quarter it had reached 40%, these results may have been influenced by recent labor figures, during the first quarter, the unemployment rate stood at 9.5%, slightly lower than the 10.1% recorded for the same period of ROBERTO DARSIE MARKET LEADER COSTA RICA The landscape is encouraging due to an improving economy, with a growth of 4.4% of GDP, 0.7 percentage points higher than a year ago; driven by internal consumption (4.7%), and the recovery of exports of goods and services (10.2%), also inflation rates are controlled - in June 2016 reached 0.9%, and recorded 12 consecutive months of negative variation rates. COUNTRY HIGHLIGHTS ECONOMY WATCH NIELSEN CONSUMER CONFIDENCE INDEX Forecast Feb'15 May'15 Aug'15 Nov'15 Feb'16 May' Inflation, consumer prices (annual %) GDP growth (annual %) Costa Rica 24

25 Value Volume FMCG MARKET DYNAMICS VOLUME, VALUE AND PRICE EVOLUTION YEAR ENDING ON JUN 16 VS. YEAR ENDING ON JUN 15 RY AMJ'15 RY AMJ'16 AMJ'15 JJA'15 ASO'15 OND'15 DEF'16 FMA'16 AMJ'16-1.5% -1.5% -3.3% 0.5% 2.0% -0.8% -1.7% -1.4% -3.5% % % -3.1% -2.8% 1.3% 1.5% 0.7% 0.5% 0.5% -2.2% -0.5% 0.9% -1.3% 0.5% 2.0% -0.8% % Variation in Volume Sales % Variation in Value Sales % Variation in Price FMCG volume has improved with the favourable exchange rate stabilising prices TOTAL COSTA RICA CHANNEL PERFORMANCE VALUE SALES STRUCTURE AND VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) 3.2% 40% 60% MODERN TRADE -2.3% 1.7% OTHER CHANNELS -4.2% Small Formats in modern trade are gaining relevance in Costa Rica 25

26 TOTAL COSTA RICA BASKETS PERFORMANCE VARIATION IN VOLUME AND VALUE SALES (RY JUN 16 VS. JUN 15) VAR (%) IN WEIGHTED VOLUME SALES VAR (%) IN VALUE SALES VAR (%) IN PRICE TOTAL FMCG PERISHABLES SNACKS & SWEETS BEVERAGES PERSONAL CARE HOUSEHOLD CARE -3.5% 2.0% 3.1% 5.8% 0.3% 4.3% -0.3% -0.5% 0.5% 2.7% 0.8% 1.6% -0.8% -2.4% -2.2% -2.2% 0.8% 3.4% Food preparation categories and premium offerings in home care have driven growth TOTAL COSTA RICA PRICE BY TIER VALUE GROWTH % ACROSS FMCG VALUE VARIATION - LOCAL CURRENCY (RY JUN 16 VS. JUN 15) 31% 20% Low Price TOTAL FMCG 0.5% 4.9% Medium Price -6.4% 49% Premium Price 10.0% 26

27 IN THE INDUSTRY NIELSEN THOUGHT LEADERSHIP Click on the images below for the latest industry insights from Nielsen. JULY, 2016 AUGUST, 2016 GLOBALLY 30% SALES, COME FROM TRADITIONAL STORES HOW TO WIN IN SMALL FORMATS? 7% Lead Markets 36% Growth Markets 40% Greater China 55% Emerging Growth TOP 250 RETAILERS TOTALED AMOST US$ 4.5 TRILLION ~40% FOOD ON THE GO & RTE FRESH PRODUCTS EXTENDED SERVICES & HOURS Convenience is not a store format it s a consumer need For more information, visit 27

28 DEFINITIONS & SOURCES Economy Watch Economic Growth (GDP annual var. in %) and Inflation (CPI, annual var. in % EOP) sourced from Latin Focus Economics July Data included in Snapshot by country are the most recent available by local Banks. Consumer Confidence Index Nielsen global survey Q2 16 based on respondents with Internet access. Index levels above and below 100 indicate degrees of optimism/pessimism. Costa Rica is not included in Global Survey, for this report Consumer Confidence was sourced by Universidad de Costa Rica for May FMCG Market Dynamics Compares overall market dynamics (value in local currency and unit growth versus a year ago) in the Fast Moving Consumer Goods sector based on the sales tracking Nielsen performs in the mentioned Latin American markets. The FMCG definition is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels. Total Basket Latin America has been calculated in the Global Growth Reporter. Super Category Performance definition of Super Categories are based on local market definitions, Price tiers are calculated in base of average category price (Low Price < - 20% vs. Category Price, Medium Price between %to 19.9%, Premium Price > 20%). 28