Ecuador 2013 | INDUSTRY | FOCUS: FMCGS

Ecuador's changing demographics have altered the dynamics of the FMCG industry, although economic disparities mean employing diverse marketing strategies to reach the local consumer.

Ecuador's FMCG industry is gearing up for greater demand in light of changing national demographics. Unemployment has plummeted from its historic peak of 12.05% registered in April of 2004 to a 25-year low of 4.63% in September of 2012. And given the continuing rise of Ecuador's middle class, demand for healthier nutrition is also boosting sales of specialized food. Additionally, a rising percentage of women in the workforce has positively impacted the volume of packaged food consumption, in turn increasing disposable income for consumer spending.

Ecuador has traditionally depended on imported consumer goods. Today, however, it has a growing FMCG industry, with numerous international companies basing their production facilities in the country and benefiting from a combination of competitive labor costs and access to raw materials. Unilever, the world's third-largest consumer goods company, manufactures 75% of the goods it sells in Ecuador at two production plants.

FMCG companies have notably been focusing on the development of local communities for the overall benefit of the country. Multinational cosmetics company Yanbal has manufacturing operations in Ecuador, with 40% of its local output destined for export within the region. The key to profitability given persistent price elasticity within the Ecuadorean economy seems to be product diversification that taps into each social group with relevantly priced products. In an interview with TBY, Carlos Gallegos, the General Manager of Yanbal, emphasized this fact; “Yanbal works with 100,000 women, which means that each one has an economic impact on around five people each month." Yanbal's distribution center directly employs over 700 people. This theme of social improvement was continued by the Senior Director of Product Marketing, South America, Fausto Arcos, of nutrition specialist Herbalife. He told TBY about the social responsibility projects that the company, present in Ecuador for 36 years, has realized. Sports related sponsorship is geared toward improving the performance and nutrition of athletes and non-athletes alike. Yet, “Our main achievement in Ecuador was to change the lives of thousands of men and women that have found the opportunity to grow personally, professionally, and economically at Yanbal… we have partnerships to develop our social causes, such as, for example, the Paralympics."

In the soft drinks segment of the beverages sector, global giant Coca-Cola is Ecuador's number one seller. This status reflects the company's strong presence in popular culture underpinned by Coca-Cola FM, a radio station present in 11 South American nations, including Ecuador. As of July 2012, Latin America accounted for 29% of unit case volume.

The clothing sector relies on promotional events such as Ecuador International Fashion Week, the 10th outing of which took place in August 2013 in Guayaquil, where both local and international brands were showcased.