FDBusiness.com

Emerging Markets Overtake Developed in FMCG Spend

 Breaking News
  • Florette Further Expands its UK Business In line with its strategy to be a major player within the UK fresh produce category, Florette UK & Ireland (part of the French Agrial group) has acquired the Wigan site of MyFresh Prepared Produce, a producer of a wide range of salad and vegetable products. MyFresh, Wigan, which employs almost 300 people and was [...]...
  • FrieslandCampina Simplifies its Organisation Royal FrieslandCampina intends to simplify its organizational structure into four to be set up global business groups – Consumer Dairy, Specialised Nutrition, Ingredients and Basic Dairy. A less complex structure will enable FrieslandCampina to more decisively respond to the market developments and to innovate better with respect to strategic priorities. The objective of the new [...]...
  • Heineken’s Acquisition of Punch is Cleared The Competition and Markets Authority (CMA) has accepted proposals by Heineken to resolve concerns over its £402.7 million acquisition of Punch Taverns, one of the UK’s largest leased pub companies, with a portfolio of more than 3,500 pubs nationwide. In June, the CMA said that Heineken’s proposed purchase of part of the Punch Taverns estate [...]...
  • Changing Consumer Tastes Drive Long-term Global Sugar Market Slowdown The consumers’ shift away from sugar consumption is an important driver behind significant changes in the food and beverage industry. These changes will have long-term ramifications, including a likely slowdown in the worldwide sugar market, according to the latest report of Rabobank ‘Sweetness and Lite’. A combination of changing preferences, product reformulations and government pressure have [...]...
  • How is the Rise of E-Commerce Changing the Role of Physical Stores? The rise of the internet has allowed retailers to directly connect with consumers from beyond the physical store revolutionising the competitive space more than ever. The world recently saw the acquisition of Amazon and Whole Foods which sent shock waves through the retail industry. This unforeseen merger has put retailers under pressure more than ever [...]...
  • SPX FLOW Appoints Pierre Sbabo as Vice President, Food and Beverage in EMEA SPX FLOW has announced the appointment of Pierre Sbabo as the Vice President of its Food and Beverage business in EMEA. He comes from a strong background in the water and process technology markets with truly international experience. With a Master’s Degree in Marketing and International Business from ESC Chambery, Sbabo has worked for global leaders [...]...

Emerging Markets Overtake Developed in FMCG Spend

Emerging Markets Overtake Developed in FMCG Spend
June 14
09:00 2017

Emerging markets now account for 51% of global spend on fast-moving-consumer-goods, rising from 48% in just three years. This is the key finding from the latest Kantar Worldpanel Brand Footprint report, which includes its annual Top 50 ranking of the world’s most chosen FMCG brands.

Kantar Worldpanel’s analysis also shows that, with developed markets barely growing, emerging countries were responsible for all of the FMCG value growth in 2016, adding $34 billion to the global industry throughout the year. The countries contributing most to this value growth include Russia (14%), Sri Lanka (9%) Indonesia (6%) and the Philippines (6%).

FMCG growth rates by region

Global grocery spend growth slowed down to 3% last year, dropping from 4% growth in 2015, but this varies significantly by country. The Africa and Middle East regions enjoyed an 8% value growth in FMCG. Headline sales also grew quickly in Latin America with year-on-year spend increasing by 9%—largely buoyed by soaring inflation.

The United States and Europe continued to suffer dampened growth last year: the former saw growth rates flatline, down from 1% growth in 2015; the latter fell from 4% to 2% growth in the same period. Asia suffered the most profound slowdown last year, however—falling from 6% value growth in 2015 to 2% in 2016.

FMCG growth rates by category

The health and beauty category suffered the biggest slowdown in 2016 with just 1% growth. Home care performed best with 4% growth, while the food and beverages sectors achieved 3% growth each – in line with the global average.

The value of choice

This year, Kantar Worldpanel has quantified the value of the average branded consumer decision: that is, the average cost paid by shoppers each time they choose a brand.
The average branded decision at the shelf costs the consumer $1.92, with the value of that decision varying widely by category. Decisions to buy food brands are generally worth less than health and beauty products, but are purchased more frequently.

Local brands and global brands

The study also shows that local brands grew by 3.9% in 2016, while global brands grew by 2.6%. Local brands are particularly strong in the food and beverage categories, being chosen in 74% and 67% of purchases respectively. Local brands have gained 1.1% share of the $2 trillion plus global FMCG market over the past three years.

In 2016, the price gap between global and local brands has narrowed to the point of disappearing. No longer does being a global brand automatically command a price premium. Global brand owners are having to work harder to convince consumers that a global choice offers additional reassurance of quality and confers prestige.

Brand Footprint: a snapshot

Brand Footprint measures consumer choice through a metric called CRP (Consumer Reach Point). There are now 21 brands which are chosen more than 1 billion times. Within the top 10 brands alone, Sunsilk (+12%), Colgate (+1%) and Nestle (+1%) have grown their CRP and spend growth over the past year – with Sunsilk a new entry to the Top 10 most chosen brands in the world.

Coca-Cola remains the world’s most chosen brand with a global penetration of 42%—in 9 countries, penetration rises to over 80% of the population. Dove attracted the most new households in 2016—14 million more households chose the brand in the last year.

Josep Montserrat, Global CEO, Kantar Worldpanel explains: “Being chosen by more people, more often, is how a brand grows. Understanding where to find the most valuable opportunities – whether from an emerging region with a growing population, or innovating to meet untapped needs in a more developed market – is critical for all brands. Through Brand Footprint, the largest and most comprehensive study of FMCG brands in the world, we seek to quantify the value of consumer choice and to share some of the best examples of the strategies brands have deployed to grow.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 11, 2017drinktec
  • September 13, 2017FI Asia
  • September 19, 2017PROCESS EXPO 2017
  • September 22, 2017Global Summit on Food & Beverages
AEC v1.0.4

The Magazine

F&D Business Preferred Suppliers

Advertisements