Global FMCG Trends in 2009 and 2010: Legacy of the Downturn

EXECUTIVE SUMMARY

Key Demand Factors Across FMCG Markets

Summary 1 Drivers and Constraints Across FMCG Markets in 2010

Note on Currency of Data

Market Trends: Winners and Losers in 2009 and 2010

Table 1 Winners and Losers of 2009 by Value, with Growth Prospects for 2010

Trends in Key Markets

Summary 2 Winning Markets: Top Three Growth Markets by Country (Value) 2009

ECONOMIC PICTURE

Boom leads to bust
Recovery underway
Emerging markets pull through
Sovereign debt remains a threat
Consumer confidence on the up
Table 2 Historic/Forecast GDP Growth in Key Markets 2008-2010

KEY DRIVERS ACROSS FMCG MARKETS

The Search for Value

Frugality becomes the norm
Private label gains credibility
Shoppers become more agressive

Health and Environmental Awareness

Greener habits prove hard to break
Health and food safety remain a priority
Organic sales dip in 2009 but are quick to recover
Chart 1 Global Sales of Organic Food and Drink 2008-2010
Sustainability – a focus for differentiation
Organic beauty
Eco-friendly tissue/hygiene and home care

Changing Demographics

Ageing populations affect lifestyles
Chart 2 % Population Aged 65+ by Region 2004/2009/2014
Fewer children impacts demand for baby products
Chart 3 Number of Live Births 2008-2010

Cocooning

Eating-in benefits packaged food sectors
Beauty at home

Development of Modern Retail Formats

Discounters become more popular
Wal-Mart appeals to new consumer base
Supermarkets drive growth in emerging markets

Impact of Regulatory Measures

The state’s influence
Health claims under scrutiny
Switches spur OTC market
Tightening of anti-tobacco laws

OVERVIEW OF FMCG MARKETS

The Global Picture

No market escapes downturn
Packaged food remains stable
Tobacco: a surprise winner
Health takes priority
Outlook good for tissue and hygiene, and pet food
Beauty and personal care, and packaged foods reach maturity
Drinks markets face price pressure
Chart 4 Retail Market Sizes by Value 2008-2010
Table 3 Retail Trends by Broad Market 2004-2014

Trends in Key Markets

Developed markets worst hit in 2009
China, India, Brazil perform better
Table 4 Value Trends by Market and by Country 2009 and 2010

PACKAGED FOOD

Competition Stifles Value Growth

Babies’ Needs Come First

Meal Replacements Replace Slimming Pills

Noodles Sales up, but Pasta Down

Indulgence Foods Suffer Reduced Spending

Largest Sectors Reach Saturation

Milk Decline Drags Down Dairy Market

Chart 5 Packaged Food: Broad Sector Sizes 2008-2010
Table 5 Packaged Food: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

US remains stable, but Japan hit by deflation
BRIC markets see mixed results
UK takes the lead in Western Europe
Chart 6 Packaged Food: Key Markets and Growth 2010

HOT DRINKS

Private Label Puts Pressure on Prices

Retail Sales Boosted by On-trade Coffee Culture

Green Tea and Plant-based Drinks Surf Health Wave

Chart 7 Hot Drinks: Broad Sector Sizes 2008-2010
Table 6 Hot Drinks: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

US and Japan drive growth
Chinese market fuelled by premiumisation
Chart 8 Hot Drinks: Key Markets and Growth 2010

PET FOOD

Pets prioritised during downturn
Product recalls prompt demand for premium brands
Dry foods benefit from convenience factor
Pet humanisation will drive premiumisation
Chart 9 Pet Food: Broad Sector Sizes 2008-2010
Table 7 Pet Food: Value Trends by Sector & Subsector 2005-2015

Trends in Key Markets

Unit price increases underpin US growth
Japanese market fuelled by niche segments
India offers strong potential
Chart 10 Pet Food: Key Markets and Growth 2010

ALCOHOLIC DRINKS

Market Suffers Unhealthy Image

Cider Enjoys Boom

Beer Boosted by Growth in Low Alcohol Varieties

Down-Trading Impacts Spirits and Wine

Champagne and RTDs Out of Fashion

Future Growth Will be Modest

Chart 11 Alcoholic Drinks: Broad Sector Sizes 2008-2010
Table 8 Alcoholic Drinks: Value Trends by Sector & Subsector 2004-2014
Table 9 Alcoholic Drinks: Volume Trends by Sector 2004-2014

Trends in Key Markets

Global downturn masks growth in core markets
Healthier products fuel growth in China
Japanese market value suppressed in 2010
Anti-alcohol campaigns impact Russian market
Chart 12 Alcoholic Drinks: Key Markets and Growth 2010

SOFT DRINKS

Price Pressure Causes Slump in Soft Drinks Value

Asian Speciality Drinks Increase Popularity in China

Carbonates Suffer from Unhealthy Image

Return to Tap Water for Cash-Strapped Consumers

Healthier Drinks Hold Biggest Potential

Chart 13 Soft Drinks: Broad Sector Sizes 2008-2010
Table 10 Soft Drinks: Value Trends by Sector & Subsector 2004-2014
Table 11 Soft Drinks: Volume Trends by Sector 2004-2014

Trends in Key Markets

US market saturated
Japan fiercely competitive
Western Europe bows to price pressure
Chart 14 Soft Drinks: Key Markets and Growth 2010

BEAUTY AND PERSONAL CARE

Switch from Premium to Masstige Depresses Market Value

Babies Continue to be Pampered

Lipstick Effect Boosts Skin Care

Steady Demand for Bathroom Essentials

Colourants Benefit from Innovation

Nails and Eyelashes Receive the Most Attention

Premium Fragrances Seen as Decadent

Chart 15 Beauty and Personal Care: Broad Sector Sizes 2008-2010
Table 12 Beauty and Personal Care: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

Masstige and private label put pressure on US market value
Brazilian market poised for growth
Chinese men turn metrosexual
Indians increase interest in personal hygiene
Developed markets set to recover in 2010
Chart 16 Beauty and Personal Care: Key Markets and Growth 2010

CONSUMER HEALTH

Rise in Generics Dampens Value Growth

Prevention Better than Cure?

New Regulations Affect Certain Categories

Ageing Populations Boost Demand for Digestive Remedies

New Categories Grow From Small Base

Chart 17 Consumer Health: Broad Sector Sizes 2008-2010
Table 13 Consumer Health: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

US and Japanese consumers turn to preventative health
Emerging markets on the brink of expansion
European market boosted by alli launch
Chart 18 Consumer Health: Key Markets and Growth 2010

HOME CARE

Market Hit by Housing Crisis...

...But Hygiene Gains Importance During Swine Flu Crisis

New Value Brands Compete with Private Label

Green Technology Drives Growth

Chart 19 Home Care: Broad Sector Sizes 2008-2010
Table 14 Home Care: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

Emerging markets offer growth opportunities
Innovation boosts value in Japan and China
Brazil and Russia set for growth in 2010
Price wars impact UK market
Chart 20 Home Care: Key Markets and Growth 2010

TISSUE AND HYGIENE

Private Label Assumes Greater Role

Incontinence Loses Taboo

Wipes Perceived as Unnecessary Luxury

Innovation to Drive Furture Growth

Chart 21 Tissue and Hygiene: Broad Sector Sizes 2008-2010
Table 15 Tissue and Hygiene: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

US and Japanese markets remain flat in 2010
Greater awareness of hygiene fuels sales in BRICs
2010 looks more promising for Europe
Chart 22 Tissue and Hygiene: Key Markets and Growth 2010

TOBACCO

Cigarettes Resist Downturn

Smoking Prevalence Still Rising in Emerging Markets

Cigars and High Tar Cigarettes Gain Share in 2009

Smokeless Cigarettes are a Hit in Tokyo

Chart 23 Tobacco: Broad Sector Sizes 2008-2010
Chart 24 Volume Sales of Cigarettes 2008-2010
Table 16 Tobacco: Value Trends by Sector & Subsector 2004-2014

Trends in Key Markets

China drives global growth
US volume sales fall, but value driven by tax hikes
Female smokers drive premiumisation trend in Japan
UK tobacco companies target youngsters via festival promotions
Shift towards factory-made cigarettes boosts sales in BRICs
Chart 25 Tobacco: Key Markets and Growth 2010

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