For the past few decades, both foreign and domestic companies have scrambled for advantage in Brazil, striving to tap into one of the world’s greatest emerging consumer markets. But, in general, they have not thought far beyond the capital cities and major metropolitan areas. Small cities deep within Brazil’s interior account for more than half of the country’s population. But compared with the rich opportunities in bigger cities, especially along the country’s southern coast, they have been regarded as less affluent, too dispersed, and excessively hard to reach.

This view needs to change fast: the action is moving away from capital and metropolitan cities. Millions of households in interior cities, which we define as those located outside of Brazil’s major metropolitan areas and 26 capital cities, are vaulting from poverty into the ranks of the middle class and the affluent. Interior cities will become the primary drivers of growth at least through the rest of this decade. We project that, by 2020, interior cities will account for nearly half of incremental household consumption, or around $130 billion in added spending. They will be especially important sources of growth in sectors such as financial services, automobiles, and apparel.

Yet most companies are poorly positioned to capture the opportunities in Brazil’s emerging growth zones. Even many companies that are leaders in the country’s most established markets lack the physical retail presence needed to reach the interior. Some 1,400 cities, each with more than 5,000 households, have no supermarkets that belong to Brazil’s top 20 chains, for example. Although banking services are available in every Brazilian municipality, nearly 5,500 cities lack branches dedicated solely to offering premium financial services to wealthy customers—even though that segment is growing much faster in the interior than it is in bigger cities. And although middle-class and affluent families in the interior have nearly 20 percent more disposable income on average than those in capitals and metro areas, 60 interior cities out of 98 with more than 5,000 affluent households have no luxury-cardealership. Furthermore, the ability of companies to penetrate the interior is handicapped by inadequate physical infrastructure and inefficient online-sales capabilities. Companies also require a deeper understanding of the underlying drivers of interior-city consumer behavior, which differ in many ways from those in capitals.

As a result, Brazil’s interior market is vastly underserved in a number of product categories. Middle-class and affluent households in the interior spend 19 percent less on postpaid mobile-telecommunications services and 45 percent less on private education. Affluent households in the interior spend half as much on air travel as their capital- and metro-city counterparts.

To help companies gain a deeper understanding of this increasingly important market, The Boston Consulting Group’s Center for Consumer and Customer Insight surveyed more than 3,600 middle-class and affluent households in both capital and interior cities in all regions of Brazil.

Our research found that even though middle-class and affluent consumers in the interior are every bit as bullish about the future as those in the country’s capitals—and are just as eager to spend their growing incomes on product categories they care about most—companies are neither adequately meeting their needs nor in sync with their purchasing habits. Interior consumers prefer to touch and feel products before buying them, for example. But to get to stores that carry many leading brands, these consumers must travel considerable distances. They travel by air less than their big-city counterparts largely because airports are too far away and flights to desired destinations are too few. And even though interior households use the Internet as heavily as big-city consumers, they are more hesitant about buying goods online because deliveries to the interior take so long and it’s too hard to get refunds.

Companies that capture the prize in Brazil’s increasingly lucrative interior will be those that can best align their retail, operational, and marketing footprints with consumer demand. To succeed, they must gain a clear understanding of the preferences of interior-city consumers and of how to make the entire shopping experience as easy as possible. Companies must also substantially expand their coverage of interior cities and explore innovative, cost-efficient business models that can enable them to reach smaller, more remote concentrations of middle-class and affluent households.