Inflation changes cost-benefit relationship and Brazilians start switching coffee and oil

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The skyrocketing prices seen in inflation rates have made many Brazilians change items in the supermarket cart. This exchange, however, is not necessarily just for cheaper products.

A Kantar study indicates that, in some segments, the exchange happens for more expensive items. This is because the prices of basic items have risen so much that the difference in value for another more sophisticated item has narrowed, which has led many consumers to redo the cost-benefit account of various products.

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The phenomenon affects items considered “commodities” – those with prices determined by the international market.

Powdered coffee, for example, recorded an increase of 56.7% in the 12-month period up to the end of the first quarter of 2022. With the skyrocketing prices, consumption decreased and the volume of units sold at retail decreased by 1.9 %.

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On the other hand, soluble coffee had a price drop of 5.8% in the same period. This encouraged the change of the product and the sale of this category of coffee jumped 29.6% in one year. The soluble type, however, continues with a much smaller share than powdered coffee in Brazilian retail.

The same phenomenon happens with cooking oils. Soybean oil increased by 16% between the first quarters of 2021 and 2022. In the wake of the readjustment, consumption decreased by 4.9%.

On the other hand, special oils – such as corn, canola and sunflower – had a less intense readjustment, of 4.5%, which encouraged consumption, which increased 27.8% in one year.

The Kantar study also observed similar movement in animal proteins. Chicken, which rose 19.7% in the study period, saw consumption stable in Brazil in one year.

Already processed meats that normally have a higher cost per kilo – such as hamburgers, sausages and other sausages – had less intense price increases.

Burgers, for example, had a 5.6% increase in prices in one year – much less than chicken and beef – which encouraged demand, which grew 5.6% in the period.

Source: CNN Brasil

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