Latin American consumers are the most concerned about climate change and express the greatest interest in generating positive change in the environment, according to a 2021 Euromonitor Lifestyles survey that questioned individuals from around the world.

Additionally, there are currently 80 policies in the Latin American region that ban single-use plastics or promote a circular economy, according to a recent report by London-based Latin American think tank Chatham House. These include a packaging law in Uruguay, a zero-waste initiative in Panama, a decarbonisation programme in Costa Rica, and the Clean Production Agreement in Chile.

Saving money and the planet

However, consumers in the region are also highly price sensitive and this can be a barrier to uptake for products that are produced sustainably and thus carry a price premium. The COVID-19 pandemic, with national lockdowns and mandatory curfews that prevented millions of people from working, has further reduced the disposable income for many Latinos.

In March last year, the UN Economic Commission for Latin America and the Caribbean (ECLAC) forecast the economic contraction following COVID-19 would result in a 10% rise in unemployment, increasing the number of people classified as poor in the region from 185 million to 220 million.

“Price continues to be one of the biggest challenges to sustainable production in the region,” note Euromonitor analysts Jorge Araya and Jorge Zuniga. “Products that have a sustainable attribute (often the result of a redesign in the production process or the packaging, or external certifications such as carbon neutrality or organic production) carry an additional charge that is normally passed on to the consumer. This immediately limits or restricts sustainable products from achieving mass consumption in a region full of very price-sensitive consumers.”

Nevertheless, Araya and Zuniga see opportunities for brands to link environmentally-focussed initiatives with saving money. They point to Chilean start-up Algramo’s business model as an example. Algramo works with big brands, such as Unilever and Nestlé, to sell their branded produce in durable, reusable containers and says its target consumer base is as much people who care about the environment as it is those who want to save money.

Clear communication for plant-based products

The plant-based category also has good potential to find its place in the Latin American market as long as brands provide more transparent information on ingredients and sustainability, according to Graciana Méndez, senior regional consumer insights analyst at Mintel. Its data shows that nearly seven out of 10 Colombians agree that plant-based foods are better for the environment, for instance.

“Plant-based started as a food trend, rooted in younger consumers who were using their eating habits to promote social and environmental justice,” Méndez writes in a recent Mintel blogpost. “Lately, however, consumers are becoming more interested in plant-based formulations for a number of reasons, including health benefits and improved animal welfare. The pandemic has played a part, with people viewing plant-based as healthier and safer than meat due to COVID-19’s suspected zoonotic origin.

“But there is still work to be done on educating people about the wider environmental benefits. While there is already an understanding that plant-based foods are better for the planet, helping consumers properly understand the link between plant-based foods and environmental gains such as reducing carbon emissions and water use, will encourage more people to limit their meat intake.”

Méndez references Mexican brand Asante, which claims that eating one vegetable protein-based product contributes to water savings equal to 19 showers and saves 14m² of forest.

Brands could also leverage traditional and native ingredients to appeal to consumers.

In Chile, for instance, the algae cochayuyo (Durvillaea antárctica) is a traditional food that has a reputation for being healthy and cheap, and is found both in markets and supermarkets in its whole, dried form. However, a number of emerging plant-based players are incorporating this ingredient into their finished products. Quelp uses 50% cochayuyo in its vegan burgers and meatballs; Munani makes oven-baked cochayuyo chips; and Nün sells pasta made from a blend of seaweed and high-protein ingredients such as lentils, chickpeas and quinoa.

Méndez concludes: “As it has in other parts of the world, plant-based has emerged as a buzzword in Latin America. However, for it to become a more meaningful term, brands will need to communicate how it can be good for people, animals and planet.