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Non-Alcoholic Beverages at the Bottom of the Pyramid

September 2017

The “bottom of the pyramid” (BOP) consists of the world’s lowest-income consumers. Collectively, this often-neglected group controls considerable spending power and is an essential group to understand for those looking to do business at a global level. While the BOP exists in all regions, the key area to consider is Asia Pacific, especially China and India.

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Consumers at the “bottom of the pyramid” represent a major opportunity

At least one billion adults worldwide live at the “bottom of the pyramid”, a term used to refer to low-income consumers with few assets. While they may each have minimal spending power on their own, collectively they control a large amount of income amounting to several trillion dollars annually. As beverages constitute a basic component of their spending habits, understanding the BOP is especially important for beverage companies.

Asia is the key region to reach the BOP, but the geographical distribution of is shifting

While BOP consumers exist throughout the world, about two thirds are currently living in Asia Pacific, with China and India alone home to around 600 million. As Asian economies grow, however, the number of local BOP consumers is shrinking in size. Meanwhile, population growth is increasing the size of Africa’s BOP, slowly turning it into the critical region. Not all BOP consumers live in these two regions, however, and countries such as Brazil, Mexico and Ukraine also have large numbers.

The BOP is looking for affordable products, but affordability is not everything

Because of their limited incomes, BOP consumers need inexpensive products. However, they are still looking for quality and will not always choose the least costly product. Attributes such as product safety tend to matter a great deal. Brands need to consider ways to make products cheaper without compromising on quality such as single-use portions and small pack sizes.

Challenges of selling to the BOP are numerous

A profitable BOP strategy requires selling large volumes of products at low margins in environments that often lack basic infrastructure to consumers who can be difficult to reach through traditional marketing tactics. These and other issues make the BOP difficult to reach effectively.


A note on research coverage
Key findings

The Bottom of the Pyramid

What is the “bottom of the pyramid”?
At least one billion people living at the BOP
The BOP is a major part of the population in the developing world
BOP consumers collectively control considerable wealth
The key markets for reaching the BOP are in Asia (for now)
Summary: An introduction to the BOP

Beverage Purchase Habits

Food and beverages is major spending priority for the BOP
Central America shows this dynamic in action
What drives beverage spending at the BOP?
High relative soft drinks costs favour small pack types
Case study: Cebu City, Philippines
Categories relevant to the BOP are more income inelastic
Cost-reduction through small pack sizes: RTD tea in Indonesia
Cost-reduction through single-use formats: Juice in North Africa
Making new categories affordable: Energy drinks in Peru
Consumers want products in whose safety they can trust
Safety first: Bottled water in Guatemala
A tale of two companies: Food safety scandals in Vietnam
Hydration is a significant priority for BOP consumers
Thinking beyond hydration: Enhanced bottled water in India
Tradition drives hot drinks consumption at the BOP
The importance of tradition: Coffee in Ethiopia
Hospitality on a budget: Concentrates in Pakistan
Conclusions: Drivers of BOP beverage spending

Challenges at the BOP

The challenges of selling to the BOP
The consumer education challenge: Water purification in Kenya
BOP consumers shop outside modern retail channels
Using bike vendors to reach consumers in West Africa
Coca-Cola vendors keep the lights on in Kenya
BOP strategies, ethics, and the role of CSR
Case study in BOP ethics: Nestlé’s “floating supermarket” in Brazil
Major challenges of reaching the BOP: Key takeaways

The BOP in 2030: What is Changing

Key trends changing the BOP
The centre of the BOP is shifting away from Asia
Asia Pacific: Today’s BOP is middle class of tomorrow
High population growth keeps the BOP growing in Africa
Elsewhere the BOP is shrinking, only slowly
The BOP is moving from rural areas to megacities
The BOP in 2030 will be heavily urbanised
Reaching urban populations through small vendors in Mexico City
Obesity concerns are increasingly an issue for the BOP
Sugar taxes can have a major affect on price-sensitive consumers
Developing countries look to sugar taxes to boost revenue, health
Summary: The changing face of the BOP


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