Why private label isn’t winning in Brazil

Private label has seen steady growth across Latin America, with markets like Mexico and Colombia seeing stronger adoption as modern retail expands and shoppers look for clearer value alternatives. 

Brazil, however, remains the region’s major outlier. Despite years of investment from retailers such as Carrefour, GPA and DIA, private label has never secured a meaningful role in the market. DIA’s exit from Brazil in 2024 is the strongest indication yet that Brazil’s grocery market is structurally resistant to private label growth. 

Three structural forces explain why private label has struggled to gain traction, and why Brazil behaves so differently from its regional peers. 

1. Heritage brands anchor the market 

Brazil’s FMCG landscape is shaped by powerful national heritage brands that have grown over decades to compete directly with global suppliers. Ypê competes head-to-head with Unilever and P&G in laundry and cleaning, Itambé challenges Danone and Nestlé in dairy, and Bauducco rivals Mondelez and Nestlé across biscuits, cakes and seasonal products. These are not regional players; they are national giants with deep trust, strong distribution and cultural relevance. 

Their long-term investment in manufacturing, logistics and brand equity means Brazilian shoppers already have strong, affordable alternatives to global brands, without needing to switch to private label. In-store, these brands receive the same elevation and visibility as multinational brands, often occupying gondola ends and premium shelf space. 

In Mexico and Colombia, private label fills the “value gap” between global brands and low-income shoppers. In Brazil, heritage brands already fill that gap, leaving limited space for retailer brands to gain traction. 

2. Challenger brands intercept down-trading

Alongside heritage giants, Brazil sees a constant influx of challenger brands that disrupt categories and chip away at global suppliers’ share. Brands like Nude (natural beverages) and Dengo (premium chocolate) have quickly gained shelf space by offering modern, influencer-driven alternatives priced below global leaders.

Image source: Nude

These brands attract the down-trade that would normally flow into private label. So while global brands lose loyalty, private labels do not gain it. Instead, challenger brands intercept shoppers long before retailer brands are considered.

This churn is reinforced by Brazil’s acquisition cycle. For example, PepsiCo’s 2020 acquisition of Kero Coco, one of Brazil’s fastest-growing coconut water brands. Kero Coco had built strong cultural relevance and supermarket penetration as a modern, health-led challenger to global beverage players.

3. Retail structure favours branded value, not retailer value 

Brazil’s retail structure further suppresses private label development. The country’s dominant value format is atacarejo (retailers include Assaí, Atacadão, and Maxxi), which is built around bulk purchasing of national brands. These stores normalise brand-led value, not retailer-led value, and train shoppers to expect low prices from familiar branded products. 

Discount formats, which are the engine of private label penetration globally, have yet to scale in Brazil. The model struggled to resonate with Brazilian customers, partly because shoppers place a high emphasis on service and colleague interaction, a cultural expectation that conflicts with low-staff discount operations. 

Retailers are still investing in private label, particularly at the entry tier. Carrefour’s recent launch of Bulnez at Atacadão is a clear example of this renewed push to build a stronger value proposition. But convincing shoppers to migrate from trusted national brands remains a major challenge.

The greatest opportunity for private label arguably lies in low‑risk, commodity‑led categories, e.g. cooking oil, bottled water, beans, rice and other staples, where brand attachment is weaker, and shoppers are more willing to experiment. Beyond these essentials, however, shifting behaviour away from long‑standing heritage brands will require sustained in‑store marketing, strong quality cues and consistent value delivery.

Image source: Carrefour

Private label penetration: Brazil vs the rest of Latin America

According to ABMAPRO, citing Nielsen, private label accounts for roughly 20% of total FMCG sales nationally, far below Mexico and Colombia, where penetration typically reaches 25% to 35% depending on the category. Even Brazil’s most advanced operators, such as Carrefour, GPA and leading regional chains, reach 20–23%, which is half the level seen in some European markets. 

Valor Econômico reports that even during the surge in inflation seen in 2024 and 2025, private label failed to gain meaningful traction, as shoppers switched to smaller pack sizes or cheaper national brands as opposed to retailer labels. This data underscores the point: Brazil is a brand-led market, and private label remains a marginal part of the grocery landscape despite retailer investment. 

What this means for suppliers

For FMCG suppliers, Brazil’s private label stagnation is not a threat but an opportunity. The market’s structure ensures that brands remain the primary vehicle for value, and suppliers can continue to grow by strengthening their branded propositions rather than defending against retailer-brand erosion. 

Three implications stand out: 

• Brand equity matters more in Brazil than anywhere else in Latin America. Suppliers should continue investing in visibility, packaging and cultural relevance. 

• Innovation is a key defence. Challenger brands grow quickly because they feel modern and relevant. Suppliers that innovate consistently, e.g. new formats, flavours, and pack sizes, can stay ahead of this churn. 

• Value must be delivered through branded tiers, not private label. Entry-tier branded propositions, regional SKUs and promotional mechanics remain more effective than retailer-brand strategies. 

Brazil’s grocery market will continue to evolve, but the structural forces shaping private label resistance are durable. For suppliers, the message is clear: Brazil is a brand-led market, and winning means investing in branded value, not preparing for private label disruption.