20%

Economy EconomyEconomic fundamentals for consumer spending appear to be solid going into 2017…

... However, the election cycle has created uncertainty

Enabling technology

Create platforms specific to CP that...

The labor market continues to strengthen

3 ways enabling technologies can benefit CPG companies

7 opportunities for CPG companies to embrace the potential of enabling technologies

Policies suggested could support consumer spending

Others could have significant impacts on consumer spending

Jobs

181,000on average added

per month in 20161

Tax cuts Infrastructure spending

Proposed trade restrictions

Health care Housing

Disposable personal income

+3.4%year ending October

Average hourly earnings

starting to accelerate2

Perform faster

Become granular

Stay connected

Enabling technology

Optimize online retailing capabilities

Manage your brand on the Internet

Adapt communication strategies to the digital world

Exploit the potential of social media marketing

Explore methods to customize products

Engage consumers with wearables and artificial intelligence (AI)

Develop strategies to influencing the digital consumer purchase journey

Digital ad spend (2016 estimates)

8.7% 21.9% 12.7% 12.2%

Continuing shift towards online retailing

Online CPG sales projection growth:

E-commerce sales

8.4%7.5%4.6%

3Q 2016 (est.)

201520104

$8b$36b

20135 2018

2017 Consumer Products Industry Outlook

Platforms

Consumer trends influencing CPG companies

Help resources and participants become accessible

Become catalysts for participants

Are closely linked to enabling technologies

Disrupting the consumer food value chain is an evolving set of drivers

Consumer immersion in the digital world: All age groups join the ranks of digital users.

Engage with influential consumer segments: By 2025, prepare for a shift to a global marketplace that’s heavily influenced by Asia Pacific.

Consumer mindset

Health and wellness Safety Social impact Experience Transparency7

Hispanics

Gen Z

Women

6.5% 7.3%8 29%

1980 2014 2050(projected)9

(% of US population)

Ages: 15-21 Approx. 25% of US population (largest demographic segment)

By 2020 they will account for 40% of US consumers10

In 2013 US women reported having control or influence over $8t—73% of a total household spend of approximately $11.2t13

Spend more on shopping trips, contributing about 60% of the total amount spent on shopping across different store types

Truly digital natives11

More conservative and worry about the economy above anything else12

nearly 10% of the global population will be in Asian Pacific cities14

7 of the top 10 global cities by population will be in Asia Pacific15

Middle class in Asia is projected to have a higher disposable income16

Asia

(448 million people)

North America and Europe

$18b $12b

vs

Retail FinancialServices

AutoCPG

Consumer mindset

PlatformsEnabling technology

Economy

[1] Deloitte US Economic Forecast, 3rd Quarter, 2016 and US Government (from Haver Analytlics). Unless otherwise noted, all data supplied by Haver Analytics, which compiles statistics from the US Bureau of Labor Statistics, the Bureau of Economic Analysis, and other databases. See www.haver.com/databaseprofiles”[2] Ibid[3] Deloitte, 2016 digital influence survey, July 2016.[4] Source: Retail Indicators Branch, US Census Bureau

[11] “5 tips for marketing to Gen Z,” The Huffington Post, July 2016[12] http://www.inc.com/hayley-peterson/heres-what-you-need-to-know-about-generation-z.html[13] “Buying Power: Women in the US,” New York: Catalyst, May 20, 2015[14] Ibid[15] http://www.geohive.com/earth/cy_agg2025.aspx[16] United Nations Global Population Prospects, 2015 Revision, http://esa.un.org/unpd/wpp

[5] The Digital Future: A Game Plan For Consumer Packaged Goods, GMA August 2014[6] Deloitte, The 2015 American pantry study, June 2015[7] Capitalizing on the shifting consumer value equation, Deloitte, January 2016 in collaboration with FMI and GMA.[8] http://www.pewhispanic.org/2016/04/19/statistical-portrait-of-hispanics-in-the-united-states-key-charts/[9] Ibid[10] “5 tips for marketing to Gen Z,” The Huffington Post, July 2016

CPG companies slow to adapt to digital

www.deloitte.com/us/2017-CP-Industry-Outlook

Copyright © 2016 Deloitte Development LLC.

$0.56of every dollar spent influenced by digital interaction3

Customization

42%of consumers interested in technology to customize products6

19%willing to pay a 10 percent price premium for them6

17%

Baby Boomers

22%

Gen X

30%

Millennials

28%

Gen Z