SÃO PAULO, APRIL 8TH, 2020
BCG team
Flávia Takey
Managing Director and Partner
Managing Director and Partner
Régis Nieto
Flávia Gemignani
São Paulo
Managing Director and Partner
São Paulo
São Paulo
Associate Director
São Paulo
1
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Daniel Azevedo
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Brief update: global cases at ~1.4M, with brazil at ~14k
Data as of 07 Apr
Cumulative number of cases, by number of days since 50th case (log scale)
1,000,000
Cases double
every day
…every 2 days
USA
…every 3 days
Spain
100,000
UK
Germany
France Iran
Italy
China
Brazil
10,000
South Korea
1,000
100
10
0
5
10
15
20
25
30
35
40
45
50
55 Number of days1
1. Number of days after exceeding 50 confirmed cases, 2. Average daily growth of past 4 days 3. March 26; Source: John Hopkins CSSE, BCG analysis
2
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Japan
Main questions we will address today
Consumer Sentiment
How is covid-19 shifting consumer sentiment
and habits in Brazil and around the world?
How shifting consumers habits are already
impacting consumption?
Leading through the crisis
How companies should lead through the shortterm crisis and potential future outlooks?
3
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Consumption Shifts
1
2
3
Consumer
Sentiment
Consumption
Shifts
Leading through
the Crisis
4
1
2
3
Consumer
Sentiment
Consumption
Shifts
Leading through
the Crisis
5
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Survey results from different countries included in this document
were captured in different stages of the covid-19 development
USA 2, UK,
China, Italy
& France
Confirmed coronavirus cases (K)
Brazil
368,196 Stabilized:
China
132,547
1,000,000
82,698 Still evolving:
10,000
74,390
Italy
14,034
US
France
100
Fielding
dates
20 22 24 26 28 30
Jan
2
4
6
8 10 12 14 16 18 20 22 24 26 28
2
4
6
8 10 12 14 16 18 20 22 24 26 28 30 1
Mar
Feb
3
5
7
10
Apr
First case
in Brazil
School BRA first SP & RJ close all
non-essential
closures in death
commercial
SP and RJ
activities
National
Human to human
New cases overseas
US-Europe
World reaches
lockdown in
transmission
exceed new cases in
Travel ban
1M cases
FR; EU closes
confirmed in China
China for first time
announced
confirmed
borders
Italy imposes
national lockdown
Possible wave 2 of COViD-19 outbreak in China still not confirmed
Sources: European Centre for Disease prevention & Control (ECDC) Reports; Ministerio da Saúde; BCG analysis
6
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Brazil
As expected, Brazilians have a very negative association
to the virus: 'death' as the most frequent word
Top words that come to mind when Brazilians think about the virus
(Free response, unaided associations)
believe that
the worst is
still ahead
Hygiene
Caution Family
Death
Pandemic
68%
believe that
there will be
a recession
COVID
Unemployment
virus Risk
Worry
Fear
Disease People
Contagion
Economy
Health
Quarantine
Question text: “You mentioned that you are aware of a global virus outbreak. What comes to mind when you think about the virus?”
Similar responses categorized together for visual simplicity.
Source: BCG COVID-19 Consumer Sentiment Survey – BR: Mar 31–Apr 2, 2020 (N = 1,255, weighted)
73%
Changed their
habits due
to covid19
67%
are only leaving
their homes to
do the essential
7
Copyright © 2020 by Boston Consulting Group. All rights reserved.
61%
Isolation
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Brazilians are actively reducing out-of-home activities;
still, working remotely is not an option for many
3%
-77%
5%
-74%
5%
4%
-70%
-76%
3%
-52%
-49%
-65%
-74%
-69%
-72%
Going to
public
spaces
Eating at
restaurants
Visiting
friends
& family
Frequency increase
Leaving
the house
for other
reason
Public
transport
Frequency decrease
Change in work pattern among respondents (%)
48%
63%
18%
53%
15%
42%
41%
19%
20%
14%
14%
12%
17%
10%
22%
7%
13%
22%
25%
25%
Brazil
Class A
Class B
Class C
Class D/E
100% working
from home
Most days working
from home
Some days working
from home
Nothing has changed
Lower classes are less
likely to work fully
remotely
Note: Question text: “In the last week, how often did you do the following activities?", compared to "In your normal weekly routine (before Coronavirus), how often did you do the
following activities" and “Given coronavirus developments, has your remote work dynamic changed?". Excludes Unemployed, Students. Retired, and Homemakers
Source: BCG COVID-19 Consumer Sentiment Survey, March 31–April 2, 2020 (N = 1255, weighted)
8
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Respondents who have reduced
activity frequency due to COVID-19 (%)
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
In Brazil, changes in behavior are already at levels of
countries at more advanced stages of COVID-19
Domestic
travel
95%
94% 94%
65%
International
travel
94%
93% 93%
68%
Local leisure
activities
97% 98%
98%
70%
6,9k
3,8k
Restaurant
outings
98%
97% 98%
62%
24,0k
80,8k
Day-to-day instore purchases
81%
79%
89%
47%
Note: Question text: “Have you already canceled plans or reduced your spend in any of the following areas due to the coronavirus?” Exclude respondents who had no plans
Source: BCG COVID-19 Consumer Sentiment Survey, Brazil (Match 30 – April 1; n=1255); China (March 12-16), US (March 12-16), Italy (March 12-16)
9
Copyright © 2020 by Boston Consulting Group. All rights reserved.
# Cases on last day of survey
% of respondents who have canceled/ delayed plans
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Customers in Brazil and other EM, are more likely to deaverage consumption behavior across categories
39
26
55
25
22
23
22
21
19
30
27
13
46
30
52
45
23
Average increase or decrease across
top 10 losers (%)
58
59
60
60
21
34
9
8
9
39
40
44
35
12
8
52
52
36
39
UK
Germany
65
38
16
20
16
22
Brazil
India
China
Italy
20
19
France Canada
17
18
14
US
UK
Germany
Planning to spend more (average %)
51
49
Brazil
India
Planning to spend the same (average %)
52
39
52
China
Italy
52
France Canada
47
US
Planning to spend the less (average %)
Source: BCG COVID-19 Consumer sentiment survey March 27-30, 2020 (N = 2,928 Canada; 2,916 China; 2,985 France; 3085 Germany; 2,150 Italy; 2,984 UK; 2,944 US), unweighted;
representative within ±3% of census demographics; and March 23-26 2020 (N = 2,106 India); representative of the top 35% of the metro tier 2 (cities with populations greater than
0.5 million) population in India; March 30-April 1 2020 (N = 1,255 Brazil weighted). Note: Question text; “How do you expect your spend to change in the next six months across the following
10
areas?” Charts exclude results for childcare, Children’s clothing; and baby/child food
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Average increase or decrease across
top 10 winners (%)
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Winners and losers in Brazil largely follow global trends
Fresh & organic food
4%
2%
Household care
5%
2%
51%
24%
54%
47%
Streaming
8% 8%
39%
Education
5% 11%
41%
Child care
10% 9%
Fabric care
Savings
Entertainment
Vitamins and supplements
3%
22%
39%
5%
6%
59%
11% 13%
34%
12%
15%
11% 9%
33%
46%
A lot less
Luxury & fashion
20%
22%
9%
Preventive healthcare
Losers: discretionary categories
deprioritized
23%
Fashion accessories
16%
10% 5%
Public transportation
30%
17%
37%
11% 5%
28%
21%
32%
16% 3%
28%
28%
16% 5%
23%
19%
Toys and games
18%
31%
22%
Shoes
26%
21%
14% 4%
Business travel
18%
25%
32%
24%
20%
25%
17%
18%
40%
Home décor
18%
15%
Feminine clothes
15%
Cars
Somewhat less
23%
Personal travel
13%
About the same
Somewhat more
28%
27%
16%
37%
30%
21%
25%
22%
22%
21%
28%
8% 9%
24%
13% 9%
24%
17%
40%
36%
7%
12% 4%
10% 9%
A lot more
BCG COVID-19 Consumer Sentiment Survey: March 31–April 2 (N=1255; Weighted)
Note: Question text: “ How do you expect your spend to change in the next 6 months across the following areas?” Excludes categories with N=100
11
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Winners: self-care and health
categories better ranked
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
However, it is paramount to recall that the consumer
sentiment before COVID-19 already showed strong
expectations of reduced spending
42%
2010
57%
57%
2011
2012
67%
72%
73%
2013
2014
2015
Intention to decrease spending
76%
2017
Sustain spending leve
72%
2018
81%
2019
Intention to increase spending
Nota: Respostas a pergunta "Você está disposto a aumentar ou diminuir os gastos nos próximos 12 meses?"; Antes de 2015, as opções dos entrevistados não eram relativas a sua renda
Fonte: BCG Consumer Sentiment; Análise BCG
12
Copyright © 2020 by Boston Consulting Group. All rights reserved.
% of consumers willing to increase/ decrease spending
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Hence, the comparison of 'current' vs 'before COVID-19'
results, shows an actual improvement for 21/31 categories
Net variation CS Apr ’20
Fresh & organic food
25
0
-25
-50
Streaming
Child care
9 categories are expected to
grow in the following 6 months
Products and services for pets
Vitamins and suplements
Entertainment
Skin care
Food delivery
Packaged food
Electrical Household Appliances
Alternative transportation
Beverage Alcohol
Mobile Electronics
OTC drugs
Kids clothing
Insurance
Electronics
Athletic equipment
Restaurants
Makeup / Perfume
Cars
Men’s clothes
Home décor
Personal travel
Toys and games
Feminine clothes Shoes Business travel
Alcoholic beverages
Public transportation
Fashion accessories
-50
-40
-30
Increase since pre-covid CS
-20
Decrease since pre-covid CS
-10
Stable since pre-covid CS
BCG COVID-19 Consumer Sentiment Survey: March 31–April 2 '20 (N=1255; Weighted); Consumer Sentiment pre-covid Dec '19 (N= 2842, weighted)
Note: Question text: “How do you expect your spend to change in the next 6 months across the following areas?” Excludes categories with N=100
0
10
Net variation CS Pre-covid
13
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Increase pre-covid
Decrease in Apr'2020 Increase in Apr'2020
Decrease Pre-covid
50
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Expectations on consumption across channels in the short
term already highlight the will of consumers to save
Channel
Essential
Atacado e atacarejo
... spend in
other retailer
... migrate to
online
4%
46%
2%
3%
Hypermarket
16%
6%
53%
12%
10%
Supermarket
17%
4%
47%
7%
17%
Neighborhood supermarket
6%
32%
7%
4%
5%
29%
12%
3%
8% 4%
22%
15%
16%
4%
39%
3%
8%
Department store
33%
11%
9%
Electronics store
24%
11%
11%
31%
18%
39%
23%
Somewhat less
16%
22%
30%
29%
14%
23%
26%
33%
A lot less
16%
51%
21%
20%
21%
41%
20%
Monobrand clothing store
19%
42%
19%
Convenience store
20%
43%
16%
11%
16%
35%
16%
29%
Drugstore 6%
Non-essential
...to save
money
Overall willing to increase spend1
26%
18%
About the same
2%
13%
Somewhat more
A lot more
BCG COVID-19 Consumer Sentiment Survey: March 31–April 2 (N=1255; Weighted);
Note: Question text: 1. “In the following month, how much are you going to spend in the following channels (online + in store purchases)"?;
2. You mentioned that you were going to spend less, what do you plan to do with the money?"
~10-25% say that will spend in
other retailer or migrate to online
14
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Why are they reducing spend?2
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Looking ahead, even though Brazilians are alarmed about
the global economic and health impacts of COVID-19…
believe that there will
be a recession
believe the world
is in serious
danger
95%
are avoiding public
places
82%
92%
have changed their
daily lifestyle due to
the virus
believe the worst
impacts are ahead
BCG COVID-19 Consumer Sentiment Survey: March 31–April 2 (N=1255; Weighted);
15
Copyright © 2020 by Boston Consulting Group. All rights reserved.
86%
94%
… and plan to resume spending
in short/medium term
~12%
Didn't
Know1
Reasons given for reducing spending (%)
Reducint temporarily
until coronavirus
passes
48%
Planning on reducing
permanently even after
coronavirus passes
30%
Saving more, in case of
recession
Other
16%
6%
BCG COVID-19 Consumer Sentiment Survey:
March 31–April 2 (N=1255; Weighted)
Estimate of how long temporary
reduction will last (%)
A few
weeks
1-3
months
4-6
months
7-12
months
>12
months
Domestic
Travel
2%
19%
39%
19%
8%
International
Travel
0%
11%
23%
31%
19%
Local Leisure
Activity
8%
41%
31%
6%
2%
Day-to-day Instore
shopping
16%
43%
26%
4%
0%
Going to
restaurants
9%
43%
27%
9%
2%
Taking Public
Transport
13%
40%
25%
8%
2%
1. Didn’t know Answers: Domestic Travel – 13%; International travel & Going to restaurants – 11%; Local Leisure
Activity & Day-to-day shopping; 12%; Tanking public transport – 14%
16
Note: Question text: “ Why did you reduce spending on XXX?” and "How long do you think you will do this
[reduce spending] for?"
Copyright © 2020 by Boston Consulting Group. All rights reserved.
… many see it as a
temporary setback…
1
2
3
Consumer
Sentiment
Consumption
Shifts
Leading through
the Crisis
17
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Countries showed sustained uplift in non-durable sales after initial
outbreak, while Brazil showed an earlier and shorter uplift
Non-durable goods
Global - % Sales Change1 after 1st Case Confirmed
Brazil - % Sales Change2 after 1st Case Confirmed
(vs. year ago - Weeks after 1st Case Confirmed)
53.3%
US
France
UK
47.5%
France and UK have started higher consumption
intensity period 5 weeks after 1st Case
38.7%
7.9%
Higher consumption intensity
period in Italy began 3 weeks
after 1st Case
3rd Week
5th Week
22.5%
18.6%
8.2%
6.4%
1st Week
Higher consumption intensity period has
started before the 3rd week after 1st Case
14.8%
Hiper/Super
/Proximity
-12.7%
Drugstore
5.7%
10.1%
US was the last to began
higher consumption intensity
period: 6 weeks after 1st Case
7th Week
-16.2%
1st to 3th Week
(average growth)
1. US, Italy, France, and UK: Sales change vs. year ago; Data includes: Grocery, Drugstores, Mass, Club, Dollar and DeCA retailers
2. Brazil: March/20 and April/20 vs. Feb 20; Does not include C&C
Note: 1st Case Confirmed – USA: Jan 21; France: Jan 23; Italy: Jan 30; UK: Jan 30; Brazil: Feb 26
Note: Higher intensity consumption - Sales Change (%) >= 5%
Source: IRI POS data Week Ending March 22, 2020; Cielo - Impacto do COVID-19 no Varejo Brasileiro
4th Week
5th Week
18
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Italy
(vs. month ago - Weeks after 1st Case Confirmed)
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
In China, fresh and storable essentials were 1st categories
with spike in demand, with fresh sustaining its growth
Initial outbreak CNY
Weekly sales %
change y.o.y
Stage I
Stock-up
200
[Avg. weekly y.o.y growth in 8 post-CNY weeks]
Virus turning point
Stage II
Stabilization
Fresh & perishables [up ~80%]
Stage III
Adapting to new normal
• Significantly higher due to stock-up & home cooking needs
Storable essentials – Edibles [up ~25%]
100
Storable essentials - non-Edibles [up ~10%]
• Sales jump at the beginning of outbreak, quickly
subsiding and returned to modest y.o.y sales
0
-100
-3
-2
-1
0
1
2
3
4
5
6
7
8
2019
2/5-2/11
2/19-2/25
3/5-3/11
3/19-3/25
4/2-4/8
2020
1/25-1/31
2/8-2/14
2/22-2/28
3/7-3/13
3/21-3/27
Note: analysis based on Q1 2020 offline & O2O sales data of leading retailers in China with national coverage
Source: Retail sales index, BCG analysis
Discretionary - Edibles [up ~10%]
• Gradual drop in stock-up period, gradually return
to normal and remained higher than last year
Discretionary – non-Edibles [down ~10%]
• Clear drop since Week 0, and staying at y.o.y sales
decline reflecting demand for non-essentials
19
Copyright © 2020 by Boston Consulting Group. All rights reserved.
• Sales jump during stock-up period, gradually return
to normal but remained higher than last year
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Top winners categories in Brazil follow worldwide
trends: food and cleaning related product
Non-durable goods
Categories Sales Change
Top sub-categories Sales Change
(% - Week ending Mar 1 vs. Feb 23 – AS and C&C)
623%
Hand sanitizers
31%
Food
Commodities1
Isopropyl alcohol
25%
Hygiene
& Beauty
21%
Home Care
18%
Non
perishable
foods2
13%
Medicine
Cleaning
products
11%
10%
Perishable
(Processed)3
Fresh Food
1. Food Commodities: Rice, Bean, Coffee, Sugar, Flour, etc.
2. Non perishable foods: canned goods, biscuits, cookies, noodle, pasta, etc.
3. Perishable (Processed): Includes refrigerated products & frozen products (yogurt, cheese, etc.)
Source: Nielsen – Impacto da Covid-19 nas vendas de produtos de giro rápido no Brasil e ao redor do mundo
85%
58%
Liquid soap
33%
Softener
30%
Bandage
29%
20
Copyright © 2020 by Boston Consulting Group. All rights reserved.
(% - Week ending Mar 8 vs. Mar 1 – AS and C&C)
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
In the other hand, durable goods and services in Brazil is
experiencing significant decrease in sales vs. pre-Covid period
Durable goods - % Sales Change1 after 1st Case Confirmed
(vs. month ago - Weeks after 1st Case Confirmed)
-2.2%
Services - % Sales Change1 after 1st Case Confirmed
(vs. month ago - Weeks after 1st Case Confirmed)
-7.6%
-21.3%
-27.7%
Construction
material
-42.5%
-41.9%
-59.7%
-83.7%
-17.6%
-67.4%
-75.9%
Furniture &
Appliance
-79.9%
Bar &
Restaurant
-75.6%
Turism &
Transport
Apparel
-91.9%
1st to 3th Week
(average change)
4th Week
1. Brazil: March/20 and April/20 vs. Feb 20
Note: 1st Case Confirmed in Brazil: Feb 26
Note: Higher intensity consumption - Sales Change (%) >= 5%
Source: Cielo - Impacto do COVID-19 no Varejo Brasileiro
-88.2%
5th Week
-91.7%
1st to 3th Week
(average change)
4th Week
Automotive
services
-92.4%
5th Week
21
Copyright © 2020 by Boston Consulting Group. All rights reserved.
-11.7%
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Use of online grocery platforms growing significantly
during crisis in most European & American countries
Web traffic: Compared to baseline
Sector zoom: Groceries
Sector / Country
Accommodation & Hotels
Air Travel
Automotive Industry
Banking Credit & Lending
Beauty & Cosmetics
Beverages
Car Rentals
Consumer Electronics
Fashion & Apparel
Furniture
Groceries
Insurance
Jewelry & Luxury
Marketplace
Medicine
Restaurants & Delivery
Telecommunications
Countries
ES
FR
AE
AU
BR
CA
DE
-65%
-72%
-80%
-75%
-81%
-84%
-72%
-52%
-51%
-59%
-45%
-30%
-34%
-41%
-21%
-28%
-9%
-20%
-17%
-9%
32%
Change in normalized visits (7-day moving avg.)
Continent
IT
JP
UK
US
-80%
-78%
-86%
-32%
-78%
-70%
-65%
-58%
-46%
-75%
-41%
-52%
-50%
-17%
-68%
-64%
-24%
-63%
-6%
-46%
-24%
-15%
-16%
-37%
-29%
-35%
-24%
0%
-17%
-20%
-33%
-12%
-2%
-26%
-36%
-35%
-33%
-3%
-17%
-16%
-20
7%
-33%
0%
2%
-24%
-25%
21%
-4%
-16%
23%
-4%
150
-61%
-69%
-60%
-64%
-62%
-80%
-75%
-36%
-83%
-9%
-63%
-63%
-27%
5%
-10%
-6%
-7%
-14%
-21%
-25%
2%
5%
-8%
-2%
100
-27%
-21%
-25%
-25%
-17%
-49%
-45%
-58%
-45%
-7%
-34%
-22%
-22%
-21%
-28%
-28%
-15%
-48%
-37%
-43%
-47%
14%
-32%
-21%
34%
10%
36%
55%
31%
-4%
90%
-3%
70%
3%
134%
56%
-26%
-32%
-36%
-22%
-18%
-39%
-36%
-18%
-34%
8%
-40%
-23%
-43%
-31%
-28%
-50%
-24%
-64%
-40%
-55%
-52%
-12%
-34%
-30%
-28%
-13%
-23%
-9%
-8%
-26%
-20%
-41%
-23%
-1%
-11%
-5%
11%
29%
28%
4%
-14%
-3%
15%
16%
49%
-4%
-5%
-4%
-29%
-30%
3%
-20%
-8%
-57%
-62%
-52%
-27%
-13%
-31%
-9%
-10%
-7%
-7%
-16%
2%
-22%
-10%
36%
2%
1%
-10%
-10%
US
60
IN
CA
40
Americas
BR
20
MX
0
Europe
UK
FR
IT
50
GE
0
SP
-50
100
50
MEA
JP
0
IN
-50
-100
Jan 17
Feb 10
Mar 5
Mar 29
Week commencing (2020)
Source: SimilarWeb data (www.similarweb.com) ; BCG analysis
22
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Change in normalized visits for 17 Mar—23 Mar vs. 27 Jan—2 Feb
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
In Brazil, lower starting point in E-commerce and growth
limited due to low penetration among lower classes
Brazil - Only higher income classes already buy
or plan to start buying online (March 2020)
Online Groceries1 Market Share
(2018)
Share of Population
per income
(2018)
HH income
< minimum wage
5.9%
1-2 minimum wage
13%
17%
11%
35%
4.1%
2-5 minimum wage
58%
49%
0.9%
China
US
Western
Europe
Brazil
>5 minimum wage
80%
1. Alcoholic Drinks, Beauty and Personal Care, Consumer Health, Home Care, Packaged Foods, Pet Care and Tissue & Hygiene
Sources: 2. BCG Marketing, Sales, and Pricing; 3. Earnest Research; 4. Euromonitor; 5. BTG Pactual & FSBPesquisa: Os brasileiros e o coronavírus: visões sobre a pandemia e seus
impactos econômicos; 6. IBGE Pesquisa de Orçamento Familiar 2017/18 BCG analysis
27%
23
Copyright © 2020 by Boston Consulting Group. All rights reserved.
11.2%
1
2
3
Consumer
Sentiment
Consumption
Shifts
Leading through
the Crisis
24
BCG Brazil COVID Task Force
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Globally, consumer companies facing different phases of Covid-19 crisis
Approx.
duration
Immediate, Phase 1
(Hysteria)
Short term, Phase 2
(Restriction/Adaption)
Medium term, Phase 3
(New Normal)
Weeks ~0-3
Weeks ~4-12
Months ~3-18
Description
Expected
changes/
activities
Example
reactions +
learnings
(to-date)
• Panicked stock piling of durables
and health items
• Restrictions on movement,
dining out, and gatherings
• Consumers adapting to new
behaviors; continued usage of
ecommerce, dining-in
• Initial spike in specific goods due
to stock piling
• Demand for ecommerce subsiding
but remains elevated vs history
• Consumers staying in at home due
to restrictions and policies
• Long term shift to omnichannel
delivery accelerated by ~24mths
• Purchases of in-home entertainment
and dining goods remain high
•
•
•
•
• Understand new trends
• Accelerate ecommerce capabilities
• Accelerate focus on prepared foods
and in-home cooking, H&W options
• Pilot stores to test new concepts
•
•
•
•
Build trust – ensure availability
Pallet drops on core items
Limit purchase on select items
Communicate availability and
online offer
• Invest in delivery capacity
Adjust space to new demand mix
Continue to ensure supply
Targeted promos, leverage loyalty
Continue to drive e-commerce
25
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Post outbreak
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Companies should consider a two-pronged action plan to
address crisis
Near-term: Winning in the "new" normal
Protect your
people & community
Protect the
business
Prepare for the rebound
(and for recession)
Launch new
steady state
• Ensure central coordination
by crisis management office
• Enact people health and
safety plan, and step-up
communications
• Ensure supply of critical
products
• Prepare operational
contingencies
• Tighten cash management
and control costs
• Gather intel to be first
mover in rebounding market
• Plan for longer term
changes in consumer
behavior
• Prepare operations,
marketing and product
range for the new normal
• Reset overall portfolio
strategy
• Embed resilience in
organization, supply chain
& processes
• Invest in E-comm, AI
and tactical M&A
26
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Immediate response: Manage the crisis
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Looking forward, set of potential shifts according to
the crisis' length
Few, but select category
consumption shifts (e.g. meal kits)
Category shift
to staples
Significant category shifts away
from discretionary products
Customers trade back up
to leading brands
Category shift
to value
Significant trading down to value
products/discounters
Limited increase in online
penetration sustained
Brick-and-mortar
to ecommerce
Ecommerce gains large share of
grocery at expense of all other
formats
Proximity showing strong
growth with increased traffic
Hypermarket
to Proximity
Permanent decline of share of
large formats
Cash & Carry: Preferred channel
for stock up, but hit by fall in B2B
C&C Channel
impact
Potential decline in traffic due
to fall in B2C and B2B sales
Minimal retail failures, mild
consolidation
Increased
consolidation
Best capitalized players vertically
& horizontally consolidate
27
Copyright © 2020 by Boston Consulting Group. All rights reserved.
LENGTH OF TRANSITION FROM ADAPTATION TO RECOVERY
27
BCG Brazil COVID Task Force
bcg.brazil.covid19@bcg.com
Executive summary: key impacts for
Brazilian Consumers and Companies
CONSUMER SENTIMENT
•
•
•
•
In Brazil, changes in behavior already at levels of countries at more advanced stages
Customers in Brazil more likely to de-average consumption behavior across categories
Most consumers expect to spend less across categories, but expectation improved vs. pre-covid
Consumers alarmed, but see negative consequences as temporary and plan to resume spending soon
• Brazil showed an earlier and shorter uplift in non-durable sales after initial outbreak
• Stock pilling on food and cleaning related products, at supermarkets and drugstores
• E-commerce with +20% growth rate in Brazil, but still concentrated in more affluent classes
LEADING THROUGH THE CRISIS
• Globally, companies facing three phases: Hysteria, Restriction and New normal
• Firms need two action plan: manage the crisis and prepare for the new normal
• New normal expected to shift up online, and neighborhood supermarkets/proximity, C&C more
uncertain
28
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CONSUMPTION SHIFTS
29
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The situation surrounding COVID-19 is dynamic and rapidly
evolving, on a daily basis. Although we have taken great care prior
to producing this presentation, it represents BCG’s view at a
particular point in time. This presentation is not intended to: (i)
constitute medical or safety advice, nor be a substitute for the
same; nor (ii) be seen as a formal endorsement or recommendation
of a particular response. As such you are advised to make your own
assessment as to the appropriate course of action to take, using
this presentation as guidance. Please carefully consider local laws
and guidance in your area, particularly the most recent advice
issued by your local (and national) health authorities, before
making any decision.