Discover the impact of COVID19 on different industries. Feedback gathered from more than 100 executives from the consumer industry.

1. 1
IMPACT OF COVID-19 IN LATAM
AN OVERVIEW OF THE MAIN COMMERCIAL IMPACTS
TMC listened to the opinion of more than 100 leaders from relevant industries mostly
in Latin America, regarding the impact of COVID-19 on their businesses.
9%
55%
36%
MANAGER
DIRECTOR
CEO
3%
13%
11%
7%
4% 4%
14%
14%
29%
FOOD
NA BEVERAGES
BEER & LIQUOR
FASHION
TRAVEL & TOURISM
PET CARE
HOME & PERSONAL CARE
PHARMA & HEALTH CARE
TELECOMMUNICATION
7%
4%
7%
7%
8%
11%
13%
17%
27%
BRAZIL MEXICO
COSTA RICA ARGENTINA
GUATEMALA PANAMA
CHILE COLOMBIA
OTHERS
6%
19%
75%
DECLINING GROWING STABLE
Humans seems to follow similar patterns of behavior in
emergency situations of long term duration.
What is critical in this particular case, is the fact that nobody
knows with certainty how long this crisis will last, affecting
consumption and purchasing behavior in ways that some business
dynamics could never return to what they were before.
Fear is the basic emotion that is driving this change on behavior.
Generally speaking, those products and services considered
essential to face the situation; those with sales volume
concentrated in Supermarkets and Pharmacies; or with the
capability to sale online are suffering less or even growing.

2. 2
BUSINESS IMPACT BY CATEGORY
One of the most affected categories due to the travel and social restrictions.
Consumers are afraid to travel and get closer to other people. Fear will have
to be addressed by companies, with tangibles solutions to transmit security
and reduce anxiety. Impact will last until vaccine is available. Pandemic could
cut 50 million jobs globally this year, and estimated drop this year is above
15%.
S
M
L
TRAVEL & TOURISM
S SHORT TERM (0 - 3 months) M MID TERM (4 - 8 months) LONG TERM (+8 months)L
CONSTRUCTION &
REAL ESTATE S
M
L
BEER & LIQUOR
S
M
L
FASHION
S
M
L
NA BEVERAGES
S
M
L
Most countries closed construction stores and therefore industries will have
to manage inventory levels and payment terms. Quarantine and
unemployment levels will delay launching dates of private and public projects.
Investments in a new property or remodeling will be postponed. Real Estate
agents are turning to virtual tours for the properties on sale, but it makes
harder the buyer’s decision. If unemployment hits the mid-teens, this sector
could last longer to recover.
ON PREMISE stores are closed in most countries, which represents a high
loss of category volumes. Despite Home consumption has increased, the
overall result is still negative mainly because of Beer. Quarantine is affecting
mostly the younger and social consumers. Wine volume is increasing. In the
mid-long term is expected a reduction in sales volume and migration towards
lower price brands and products.
In the short term, most important events have being cancelled and stores are
closed. It is expected a change in purchase habits of fashion, accelerating
growth of Online channel. Luxury fashion is the most affected segment, and
will be the last to recover as quarantine is limiting social interaction. Sales
performance will be affected until next year, due to the high levels of inventory
at retail.
The closure of the On Premise and Education channels has also affected this
category, although with softer impact than Beer and Liquor, since
consumption AT HOME still represents the largest proportion of total volume.
Energetic and Isotonic beverages are the big losers. Family formats are
preferred options vs the smaller ones.
HOW DO YOU
FORESEE THE
FUTURE AFTER
COVID-19
70%
70%
20%
10% POSITIVE residual effect
BACK TO NORMAL
NEGATIVE residual effect
HOW LONG DO
YOU EXPECT
RESTRICTIONS
IN PLACE?
50%
18,2%
50%
27,3%
4,5% 1 MONTH
2 MONTHS
3 MONTHS
+3 MONTHS

3. 3
BUSINESS IMPACT BY CATEGORY
Definitively one of the categories that are winning with this crisis. Fear was
quickly spread among the population who ran increase inventory levels of
basic products. Cleaning became critical at home and a frequent activity
during quarantine. Demand will remain high and families will prioritize this
category within the monthly budget of expenses for a while. Consumption
habits are changing and frequency of use across all ages and social levels is
increasing, describing a promising future for the industry.
S
M
L
HOME & PERSONAL
CARE
PHARMA & HEALTH
CARE S
M
L
In general terms, Panic is the word used to justify the high sales levels of
some products. In the absence of a formal cure, people are buying different
products based on medical and social media recommendations. Products and
Services to control anxiety and depression are highly demanded, and in the
long term, it is expected a positive residual effect with increase in
Government’s investment in public health.
The first impact was a shortage of the Supply Chain as a consequence of
crisis in China. Internet at home was not prepared to cope with the
communication needs of more people working, studying and entertaining at
home during all day. The growing need for remote interactions amid the
coronavirus pandemic has highlighted a need for 5G technology, potentially
accelerating adoption in the long term. More online transactions are
demanding higher investment in infrastructure in the near future.
S
M
L
TELECOM
During the first weeks, shoppers increase inventory levels at home. The raise
of Home Consumption doesn’t compensate the drop of the ON Premise
channel. Consumers are showing preference for more healthy food with high
concern on ingredients, origin, quality of products and even the level of
cleanliness of the delivery service. Mid-long scenario is negative with the
economic crisis and fear of social interaction. Industries are focusing efforts
on high rotation SKU’s availability which has to compete against local and
private brands.
S
M
L
FOOD
PET CARE
S
M
L
Despite Pet Market has shown a strong resistance to economic crisis, the
Quarantine is a new variable to keep into consideration. Pet owners with more
time with their animals at home and restrictions in some markets to outdoor
activities have increased expenses in cleaning, toys and other accessories.
Veterinarians and Pet Shops are suffering hard. Online sales have increased,
but in the mid-long term it is expected a small decrease in net sales turnover if
unemployment levels start to rise.
S SHORT TERM (0 - 3 months) M MID TERM (4 - 8 months) LONG TERM (+8 months)L

4. 4
COUNTRIES
GDP x capita
US$
COVID-19
cases x Million
Apr 7th
UNEMPLOYMENT
TRAVEL &
TOURISM
% GDP
CONSTRUCTION
% GDP
EXPORT
% GDP
ARGENTINA 14.401 33,6 8,9% 10,0% 5,6% 14,28%
BOLIVIA 3.393 14,9 3,8% 6,9% 2,8% 25,99%
BRAZIL 9.821 50,3 11,6% 8,1% 3,7% 14,81%
CHILE 15.346 248,3 7,8% 10,1% 7,1% 28,41%
COLOMBIA 6.302 29,2 12,2% 5,6% 1,3% 15,93%
COSTA RICA 17.100,0 89,7 8,3% 13,1% 3,8% 40,00%
DOMINICAN
REPUBLIC
7.052 149,1 5,9% 17,2% 12,2% 11,50%
ECUADOR 6.198 212,9 4,9% 6,0% 10,0% 22,82%
EL SALVADOR 3.889 9,6 6,4% 11,6% 6,0% 28,91%
GUATEMALA 4.471 3,8 2,5% 7,4% 3,8% 18,12%
HONDURAS 2.480 29,9 5,7% 14,6% 7,1% 41,78%
MEXICO 8.902 14,8 3,6% 17,2% 6,5% 39,29%
PANAMA 15.087 478,5 7,1% 14,5% 17,0% 42,26%
PARAGUAY 4.366 14,9 5,7% 3,9% 9,0% 36,01%
PERU 6.572 53,4 7,1% 9,5% 7,0% 25,28%
URUGUAY 16.246 120,8 8,5% 16,9% 9,4% 21,00%
OVERALL IMPACT BY COUNTRY
Considering the following variables per market:
1. GDP per capita: as an indicator of the power of consumption
2. COVID-19 cases x million: level of complexity of the health situation which will potentially generate more
restrictive measures in the near future.
3. UNEMPLOYMENT: proportion of population with limited power consumption.
4. TRAVEL & TOURISM % GDP: most affected segment of the economy with longer recovery time
5. CONSTRUCTION % GDP: one of the highest sources of employment.
6. EXPORT OF GOODS % GDP: as global manufacturing levels are expected to decrease, demand for
commodities will also be affected and as a consequence price is go down.
Highlighted figures are above or below group average, as a RISK indicator.

5. 5
OVERALL IMPACT BY COUNTRY
We can conclude the following:
WARNING
!
1. PANAMA
2. DOMINICAN REPUBLIC
3. CHILE
Most relevant sources of income of these
countries will be at risk for a long period of
time, facing the COVID-19 pandemic. 2020
results are highly compromised.
• Winter season at the south of Latin America is considered lost (June-Sept). Even if Chile
and Argentina release the confinement, still is too soon to feel confident to travel and
socialize without proper protection. The same applies for Summer in Mexico, Central
America, Colombia and Caribbean.
• There is hope that by the end of the year the vaccine will be available and therefore
Summer (Dec-Mar) season in Brazil could be less affected (i.e. End of the year and
Carnival). However it is recommendable to start planning a Contingency Plan for all
industries that highly depends on sales during this season.
• Export Sales will be affected as most of them are commodities (i.e. Crude Petroleum,
Sulfate Chemical Woodpulp, Soybeans, Iron Ore, Raw Sugar, Rice, etc) and destination
markets such as China and USA are expected to reduce their production levels, in line
with a global decrease of demand. In this sense, Mexico will be highly affected as its
main export products beside Oil, are Cars, Vehicle Parts and Delivery Trucks which is
expected to suffer until the end of the year.
• It is expected a rapid increase of “Private Brands” across all consumer categories as
they are the cheapest option available. Most industries are focusing efforts on the
SKU’s with the highest turnover, which were used as a reference to develop private
brands of retailers, raising difficulties to defend a price gap.
• Traditional channel will gain relevance across all countries in LATAM, as Shoppers with
limited cash flow will increase frequency of purchase of lower volumes. Also it is
expected an increase of the informal channel due to the high level of unemployment
across markets. Coverage and Distribution will be key to defend the market share.
• Considering all the above mentioned elements, it is clear that industries will have to
strengthen its portfolio of low price offers, as they will play a strategic role as safety net
for downtrading shoppers and a key defense against Private Brands and Smuggling.

6. 6
KEY COMMERCIAL DECISIONS TAKEN BY INDUSTRIES
PEOPLE • Protect employees by sending them to work from Home. This measure is valid to
most of administrative positions. Companies that will be able to minimize the
rotation of employees in key positions will recover faster.
• Direct contact with Leadership: online meetings in a weekly basis. Some
companies are doing this up to three times per week.
• Increase Online Training to develop short term skills and capabilities required to
overcome new challenges, motivate employees and keep them connected to the
business.
SYSTEMS
PROCESSES
• Clearly define the Emergency Process Roadmap, identifying critical processes that
don’t compromise the business continuity.
• Maximize Efficiency, reducing expenses in no critical areas and processes.
• Weekly Online conversations with internal teams and key customers to reduce
anxiety and provide support. Increase sales by phone (including WhatsApp), to not
only protect internal teams but also customers to get infected.
• Review the Company Plan and Strategies.
• Delay new launches
• Create the Contingency Plan and assign a multifunctional team to lead with the
crisis management. This team will be responsible to keep the business operational
• Foster communication. Internal teams and Customers must feel confidence that
Leadership is taking control.
• Prioritize Portfolio: focus on Family formats and high rotation SKU’s
• Stop Selling-In campaigns to minimize inventory at stores, and Increase Sales
Discounts to Shoppers to reduce stocks of low rotation SKU’s.
• Prioritize Customers: guarantee supply to strategic customers still open and
review your current levels of coverage and distribution on the Traditional Channel.
• Protect Cash Flow: extend the cash conversion cycle, considering the extension of
payment periods to closed stores.
• Protect Brand Awareness by creating corporate campaigns with positive
messages that could become viral.
• Create or strengthen the New Normal Team: a small multifunctional team
responsible for analyzing consumers, shoppers and customers behavioral changes
and determine opportunities and risks to be tackled down in the after crisis. This
team will also have to analyze what is required to change or adjust internally in
terms of organizational model, headcount, people profile, capabilities and
processes to continue delivering sustainable growth in future.
STRATEGY

7. 7
Who is TMC?
We are a consulting company
specialized in the commercial
area, founded in 1996 and
since then it has expanded to
more than 15 countries in Latin
America and Europe. In these
24 years of work, we have
accumulated a portfolio of
clients ranging from
companies and medium-sized
retailers to multinationals on
the Fortune 500 list.
New products, services, markets,
commercial organizations and
companies for Due Diligence
processes.
We lead, control and evaluate the
implementation of the Plan by their
teams, guaranteeing the results and
the expected quality.
Headquarter | Spain
What do we do?
EVALUATION EXECUTION
United States | Mexico | Costa Rica | Guatemala | Panama | Colombia | Venezuela | Ecuador | Brazil |
Peru | Chile | Argentina | United Kingdom | UAE.
Where are we?
contacto@tmcconsultores.com
Business Plans; Business or Franchise
Models, Optimization of Commercial
Organizations and Relationship
Programs with Clients and Shoppers.
PLANNING
www.tmcconsultores.com
Don't hesitate to contact us!