Global FMCG: Finding Opportunities
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Transcript of Global FMCG: Finding Opportunities
GLOBAL FMCG: FINDING OPPORTUNITIES
PLMA ACCESSING EXPORT MARKETS CONFERENCE
REHAN PANDITARATNE, AUGUST 2017
© Euromonitor International
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How do brands achieve success in global markets?
GLOBAL FMCG: FINDING OPPORTUNITIES
Grown 5% annually over last 5 years globally despite stagnant domestic Japanese market to reach US$5 billion sales.
Female Empowerment
Ageing
Ethical Consumerism
UrbanisationGrown China outlets from 250 to 2,500 over the last 10 years to reach over US$2 billion in sales.
8% annual global growth over the last 5 years to reach over US$200 million in sales.
Achieved US$1.8 billion absolute growth globally over the last 5 years.
Time Poor Consumption
Grew sales by 50% in Asia over the last 5 years to US$280 million.
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
TIME POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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4EUROMONITOR INTERNATIONAL
Euromonitor International: Strategic Global Market Research
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Global packaged food by categoryINTRODUCTION: GLOBAL OVERVIEW
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Packaged Food: Size 2016 and Strength of Global Categories 2011-2016
Retail Value Sales 2016 Retail Value Sales % CAGR 2011-2016
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Dairy: Asia has surpassed North America and Western Europe in valueINTRODUCTION: GLOBAL OVERVIEW
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50%
100%
2000 2005 2010 2015 2020 2025 2030
World GDP by Region: 2000-2030
Other Emerging and Developing Countries
Emerging and Developing Asia
Developed Countries0 60 120
Latin America
MENA
Sub-Saharan Africa
Emerging and Developing Asia
% growth
Real GDP Growth in Emerging Regions: 2015-2030
In 2030, this region will
account for 44% of global GDP,
up from just 18% in 2000.
Why Asia Pacific?INTRODUCTION: GLOBAL OVERVIEW
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
TIME POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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China’s urban population expanded by 37%.
China’s rapid urban growth has resulted in a rising number of megacities with populations above 10 million.
China: Nearly a billion people will live in urban areas by 2030URBANISATION
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Rise of single persons
Later parenting; shrinking families
Expanding middle class with rising
incomes
Better access to education
Better connectivity
High costs of housing; small living spaces
Pressure on infrastructure and
services
Less time for leisure and
physical activity
Pollution and related health
issues
Large gaps between ‘haves’ and ‘have nots’
Impacts of urbanisationURBANISATION
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Mega Trend: Changing Family Dynamics
The growth of products such as coffee machines, smoothie makers and snack foods is largely linked to people who live alone.
GOING SOLO
Existing Industry Examples• The rise of single-portion cakes and frozen desserts. • Growth in per capita consumption of ready meals, share of small and micro packaging
and more.
Going soloURBANISATION
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Demand for smaller pack sizes and re-sealable packs, which stand-up pouches are growing.
Much of the growth in stand up pouches will come from Asia Pacific.
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Stand-Up Pouches in Sauces, Dressings and Condiments Packaging by Size Band 2010-
2015
2010 2015
Single-person households drive demand for smaller pack sizes and pouchesURBANISATION
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
TIME POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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Mega Trend: Time as Currency
Focus on convenient and flexible products and solutions that enable consumers to either save time through outsourcing of tasks or multi-task through more flexible packaging options.
OMNIPRESENT CONSUMPTION
Existing Industry Examples• The rise of snack replacements from all corners of the supermarket. The growing
availability of portable breakfast solutions. • A plethora of online food delivery options spanning scratch cooking options to ready-
to-eat services.• Per capita consumption of snack replacements and stand up pouches.
Omnipresent consumptionTIME POOR CONSUMPTION
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Breakfast Combo
Dual pots, especially those with disposable spoons, are fast
becoming popular with commuting
consumers.
Drinking Yoghurt
Now many yoghurt brands
are simply selling their products with straws to
allow consumption in
beverage-like fashion. Yoplait
variants in China are good examples
of this trend.
It’s All Greek
Positioning as a high protein snack is. From the US to Australia, Brazil to the UK, consumers are buying into the
thick yoghurt variant for satiety
purposes.
Dessertification
“Dessertification”, a trend best exhibited in
chocolate, which replicates restaurant
desserts, has proven to be a
valid alternative to mainstream
snacks.
Snacking yoghurts being used to meet a variety of purposesTIME POOR CONSUMPTION
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PepsiCo expands Quaker oats into biscuits, granola and snacksTIME POOR CONSUMPTION
On-the-go porridge
Ready-to-eat supergraincereals and granola
Savoury snacksBreakfast bars
and biscuits
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
TIME POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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% c
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Selected Leading Growth Markets For Female Disposable Income Per Capita 2011/2016
Female empowermentEMPOWERED WOMEN
Female disposable incomes soared in China by 44% over the last 5 years
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What is driving the obsession with self-image? EMPOWERED WOMEN
The empowerment of women The “selfie culture”
Exposure to idealised images of beauty The power of the online influencer
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Euromonitor survey revealed that 22% of women were actively trying to lose weight in 2016.
36% claimed they were actively monitoring what they eat in order to manage their weight.
The quest for weight lossEMPOWERED WOMEN
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The global retail market for weight management was worth US15.9 billion in 2016.
Growth was driven by the two largest categories – meal replacement and weight loss supplements.
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Meal Replacement Weight LossSupplements
Slimming Teas
US
D b
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Global Sales of Weight Management 2011/2016/2021
2011 2016 2021
0 1,000 2,000 3,000 4,000 5,000 6,000
India
Mexico
Japan
China
US
USD billion
Top Five Markets for Weight Management 2016
Growth in weight managementEMPOWERED WOMEN
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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Selling trustETHICAL AND GREEN CONSUMERISM
Mega Trend: Striving for Authenticity
Trend DescriptionIn a bid to stay safe and knowledgeable about what goes into their bodies, consumers have moved towards “authentic” products. Traceability and transparency are key components of this movement and the digital economy is enabling solutions for brands.
SELLING TRUST
Existing Industry Examples• Single-origin cocoa used by a growing number of premium chocolate brands. • Growing demand for manufacturers to move towards clean label ingredients. • Growing anti-GMO sentiment in the US. • The return of heritage ingredients and ancient grains.
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Clean labellingETHICAL AND GREEN CONSUMERISM
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Top 10 clean label markets
2015 2015-2020 % Growth
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Case study on selling trust
ETHICAL AND GREEN CONSUMERISM
Hipp Combiotic, United KingdomSource: Ocado.com
As consumers become more price
conscious and increasingly mistrusting
brands, especially those from the largest
global food manufacturers, there is a shift
towards more “authentic”, niche and
natural products, with consumers seeking
brands that they see as upholding key
values.
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Scandals came thick and fast over 2013-2015 in China and Taiwan, shaking rebuilt but weak consumer confidence.
That said, international brands are unlikely to carry their superior status as a USP for much longer, as more and more international brands are flogging these markets.
Food scares increase demand, not just for foreign brands…ETHICAL AND GREEN CONSUMERISM
Australia’s Own Milk for Children in China, 2015
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Environmental food and beverage forecast to grow strongly in China ETHICAL AND GREEN CONSUMERISM
China: Ethical Labels Retail Value Market Size 2015-2020 (USD billion, Fixed 2015 Exchange Rate)
Note: Light blue is forecast, dark blue is 2015
The market size of environment is expected to overtake people/value by 2020. This is partly due to multinationals’ contribution to supplying FSC packaging to major liquid carton brands, particularly in dairy.
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Consumers globally show a growing awareness of naturally derived ingredients, as well a desire that products are sustainably produced.
These concerns are more prevalent in emerging markets, especially in Asia, than in developed markets.
Asian consumers show highest preference for green beautyETHICAL AND GREEN CONSUMERISM
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Islam is the most popular religion in Asia, so it is unsurprising that the researched countries in the region contributed heavily to sales of packaged food and beverages with a halal claim.
Indonesia, for example, had US18 billion in value sales of products with a claim in 2015; a country where the Muslim population in the country stands at over 85%.
In order to succeed both in Asia and in regions where Muslim populations are growing, particularly Western Europe.
Halal certification in Asia PacificETHICAL AND GREEN CONSUMERISM
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
TIME POOR CONSUMPTION
EMPOWERED WOMEN
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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0 100 200 300
South Korea
Spain
Thailand
Mexico
UK
France
Italy
Germany
Indonesia
Brazil
Russia
Japan
US
India
China
Million
The Biggest 60+ Populations in 2020
The global population will continue to age, on the back of rising life expectancy, falling birth rates and the ageing baby boomers.
China and India will continue to have the largest over 60s populations, and will experience faster ageing than the global average.
The world will continue to age, especially in China and IndiaAGEING POPULATIONS
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Mental agility
Brain Health Supplements Learning new skills Volunteering Brain training
Health and wellbeing
Disease prevention through self-care and good nutrition
Keeping fit Monitoring weight Emotional wellbeing
Outward appearance
Use of anti-ageing beauty products and supplements
Cosmetic treatments Stylish clothing and accessories
How are consumers challenging ageing?AGEING POPULATIONS
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Older consumers are increasingly aware that they need to eat healthy and nutritious foods in order to help prevent chronic diseases.
Convenience foods, such as snacks, ready meals, soups and supplement nutrition drinks, are popular among this demographic.
In April 2016, Nestlé announced the opening of a new research and development centre in Singapore, for the creation of new products for ageing consumers in Asia Pacific and across the world.
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Fortified/Functional Naturally Healthy
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Global Sales Of FF And NH Products 2010/2015
2010 2015
In China, probiotic yoghurt is a burgeoning niche.
In 2010 it was worth
US$2 billion. In 2021 sales of this product will be around US$15 billion.
Untapped potential for foods aimed at seniorsAGEING POPULATIONS
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Health supplements; natural and fortified foodsChronic diseases
Vitamin D; calcium supplementsLoss of bone denisty
OTC antacids; laxatives; high-fibre foodsDigestive problems
Lutein and other eye supplements; reading glassesEye problems
Hair loss products; colourants; specialist shampoosHair loss
Anti-ageing creams; beauty supplementsLines and wrinkles
Calming and sleeping aidsSleeping difficulties and anxiety
Urinary health supplements; incontinence productsIncontinence
Lethicin and other memory supplements; brain games Memory loss
Old age ailments and commercial opportunitiesAGEING POPULATIONS
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Product design
• Nutritious foods that are easy to prepare and eat
Packaging design
• Clear labels with bigger fonts,
• Easy-to-open packaging
Distribution
• Offer a variety of home delivery options
• Local stores
• Convenience
Pricing strategy
• Older consumers tend to be more value-conscious
Manufacturers will have to think carefully about how to adapt their offer to suit the needs of an ageing population.
Opportunities: Adapting the offer for older consumersAGEING POPULATIONS
INTRODUCTION: GLOBAL OVERVIEW
URBANISATION
WORKING WOMEN AND TIME POOR CONSUMPTION
ETHICAL AND GREEN CONSUMERISM
AGEING POPULATIONS
CONCLUSION
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Engage older consumers. They are the future.
Understand the evolving needs of female consumers.
Account for the unique ethical and green considerations, especially in Asia.
Leverage urbanisation trends.
Recommendations for FMCG companies exporting globallyCONCLUSION
Time poor consumption in your NPD and channel strategy.
THANK YOU FOR LISTENINGRehan Panditaratne
Consultant
+61 2 9581 9232
https://www.linkedin.com/in/rehanp/