PACKAGED FOOD 2018 EDITION: NEW INSIGHTS AND SYSTEM REFRESHER
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PACKAGED FOOD 2018 EDITION: NEW INSIGHTS AND SYSTEM REFRESHER November 2017
New Insights Industry Overview Latest Trends In Packaged Food About Our Research
NEW INSIGHTS: INDUSTRY OVERVIEW Asia Pacific and Middle East and Africa main global growth drivers
NEW INSIGHTS: INDUSTRY OVERVIEW
Global players in dairy and savoury snacks make gains
World Packaged Food Top 10 Company Actual Sales USD Million
2012-2017 and CAGR
320,000
General Mills Inc
280,000
Kellogg Co
240,000
Retail value sales USD million
Lactalis, Groupe
200,000 Mars Inc
Kraft Heinz Co
160,000
Danone, Groupe
120,000
Unilever Group
80,000
Mondelez
International Inc
40,000 PepsiCo Inc
Nestlé SA
0
2012 2013 2014 2015 2016 2017
NEW INSIGHTS: INDUSTRY OVERVIEW Danone, Lactalis and PepsiCo benefit from their category presence Among the top 10 packaged food companies, two players present mostly in dairy, Danone and Lactalis, outperformed most of their peers between 2012 and 2017, and in terms of their rankings, both benefited from acquisitions. Following the purchase of the milk alternatives specialist WhiteWave in early 2017, Danone is predicted to leapfrog Kraft Heinz as the fifth largest global packaged food company, while Lactalis saw its ranking move up through a spate of smaller-scale acquisitions in several emerging markets, ranging from Brazil to India. Danone is also increasingly within reach of surpassing Unilever, which saw modest growth over 2012-2017, undermined by stagnant sales and a declining share in margarines and spreads. As Unilever is currently seeking a buyer for its butter and margarine unit, and may reach a deal by the end of 2017, this increases the likelihood of the group falling behind Danone. Benefiting from its strong presence in savoury snacks, PepsiCo outperformed those present mostly in confectionery, such as Mars and Mondelez. However, just outside the top 10, ranking 11th, one chocolate confectionery specialist, Ferrero, steadily made gains through focusing on the more dynamic premium end of the category and by rapidly boosting its presence in emerging markets, including China. This could lead Ferrero to overtake General Mills, which has suffered from steadily declining sales of breakfast cereals in the US, and has lost ground to rivals in yoghurt. Another uncertainty in how the pecking order of the top 10 food players might be reshaped lies in the appetite of Kraft Heinz for acquisitions. Since its inception in 2015 through the merger of Heinz and Kraft, sales of Kraft Heinz have stagnated, hindered notably by the poor performance of its cheese and processed meat legacy brands in North America. As the group struggles to achieve organic growth, its private equity backer 3G Capital will be itching to make another bold move for a large food company, allowing it to generate further group synergies. A re-merger with Mondelez, Kellogg or General Mills are amongst those speculated.
NEW INSIGHTS: INDUSTRY OVERVIEW
Three of the top five global food brands are Chinese
Packaged Food: Size and Strength of the Top 10 Global 2017 saw the continued
Brands dominance of Asian
12 12% brands in the global
scene. Of the top five
10 10% packaged food brands,
three (Yili, Mengniu and
Arawana) come from
Retail value sales – USD billion
8 8%
China.
Retail value CAGR
6 6% However, the slowdown
in the Chinese dairy
4 4% market, as opposed to the
steady increase in the size
2 2% and penetration of the
global snacks markets,
has meant that PepsiCo’s
0 0%
Lay’s is expected to
overtake Yili by the end of
-2 -2%
2017.
Yili’s sales are projected
-4 -4%
Lay's Yili Men- Ara- Kraft Knorr Oscar Master Dori- Heinz to contract by 1%, whilst
gniu wana Mayer Kong tos Lay’s is set to see value
growth of 4% in 2017.
Retail Value Sales 2017 % CAGR, 2012-2017
NEW INSIGHTS: INDUSTRY OVERVIEW Local brands are strong competition for leading international brands Similar to overall packaged food, in sweet biscuits Asian brands have started to become more visible in the global market. Of the top five leading sweet biscuits brands in 2017, two come from Asia Pacific. Britannia, which is the leading brand of biscuits in India, overtook Chips Ahoy!, the flagship US cookie brand, to be the world’s third biggest brand in 2016. Similarly, Parle, another Indian brand, now sells more than both Kellogg’s Keebler and PepsiCo’s Gamesa. Pocky, the leading Japanese biscuit sticks brand, with a similar shape and taste to Mondelez’s Mikado, jumped five places over 2011-2017, and now ranks among the world’s top 10 sweet biscuits brands.
NEW INSIGHTS: INDUSTRY OVERVIEW Baby food, edible oils and savoury snacks are poster children for growth
New Insights Industry Overview Latest Trends In Packaged Food About Our Research
NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Eight most influential packaged food trends in 2017 and beyond
Repositioning Digital
Healthy Living Personalisation
Indulgence Convenience
Seeking
Selling Trust Local over Global Sustainability
ExperiencesNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Health is the new premium in packaged food
Healthy Living
Liquorice with added oats,
It’s all about the Raw Chocolate, Planet containing “only 5 ingredients”
process Organic, London Orkla Confectionery & Snacks,
Finland
Trends in weight management and wellbeing come and go. Yet in
recent years, food intolerance has come to be regarded by many
as the culprit for unexplained weight gain and poor digestion, and
Era of this diagnosis is also driving sales of products such as dairy
reformulation alternatives, meat substitutes and gluten-free baked goods.
Innovations in raw foods (e.g. raw chocolate), as well as product
reformulation (e.g. fewer/pronounceable ingredients), are set to
drive growth.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Sugar avoidance in snacks calls for a different indulgence strategy
Repositioning
Indulgence
Quality over
quantity Premium
ingredients –
Homeless
Gabba
people given the
focus on cocoa opportunity to chocolate,
content and sell coffee Japan – to help
type: Ruby with stress
chocolate Czech Republic
Bad for you, but
good for the world
As a result of negative publicity on sugary snacks and increased
government pressure, manufacturers are having to rethink the
Functional positioning of indulgent snacks. Emphasis instead is put on quality
indulgence ingredients, aiding social causes and functional indulgence to
make consumers feel better about consuming indulgent foods.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Consumers want to have their say
Personalisation
Personalised
products
Nutrigenomics in Real
3D printing, Barilla Time: Campbell’s
Personalised Meal Kit
Personalised
labelling
Personalisation has revolutionised the look and behaviour of
brands, creating a greater and deeper level of connection with
Personalised their audience. Personalisation manifests in itself in three key
forms – labelling/packaging, the product itself and personalised
nutrition nutrition.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Say it, scan it, buy it: New technologies for seamless transactions
Digital Convenience
Enhanced
From online
placement ordering to in-
Gifting through Pointy – Ireland
social media - Live stock
fridge delivery.
ICA Infridge – Starbucks and information for
Sweden WeChat local shops
E- and S-
commerce
The consumers of today are more connected than ever before.
The number of internet users has increased rapidly, to reach 3.1
billion globally in 2016. An estimated 42% of the population used
Local meets the internet as of 2016, and this is driving change in packaged
online food. For anyone wanting to track their nutrition intake, a
number of gadgets have now come to the market, promising to
make it easier to order food or to track what you eat.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
A need to know everything about anything, everywhere
Selling Trust
Mondelez switches
Triscuit to Non-GMO
Verified. Block Chain:
Transparency Joe Seph’s The company A technology
communicated similar to Bitcoin
premium that serves as a
popcorn in that consumer
demand had distribution
transparent ledger which
packaging, UK, prompted the move,
as more than half of records
2017 transactions
Americans are looking
Regulation for non-GMO food between two
and beverages. parties.
Increased communication about food scandals around the world
has created a strong desire for consumers to know everything about
Technology anything, everywhere. Trust is now regarded as a unique selling
point, and product innovations are centred on transparency (e.g.
transparent packaging, as well as transparency in the supply chain).NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Move away from big brands harmful for food multinationals
Local over
Global
Dr Oetker Oreo Thins was
Local sourcing The SuperBar provides a initially launched in
fruit bar from platform to China to appeal to
Greece prides connect local consumers’
itself on using consumers to tastes. It was then
only locally small local rolled-out to
produced fruits bakeries, developed markets
Germany as a portion control
Provenance option.
Small local brands are taking share from global brands in
developed markets, as consumers increasingly mistrust big players
and opt to spend a little extra on locally produced foods whilst at
Reverse innovation the same time supporting the local economy. In particular, organic
shops and online players such as Amazon are providing a platform
for small local players to reach out to consumers.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Experience outside the home: Foodservice set to outpace retail
Seeking
Experiences
Retreat of the
middle-classes Anthony Bourdain’s
USD60 million
Haribo store – Bonn
international food hall
development in NYC
Less time
The middle-classes in developed markets have neither expanded
nor enjoyed meaningful income gains since the 2008-2009 global
financial crisis. In the decade to 2016, the share of middle-class
households remained stagnant at 28% across the 32 major
Children at older developed countries tracked by Euromonitor. The squeezed middle-
age classes are moving away from conspicuous consumption, placing
less emphasis on ownership and instead looking for more
meaningful experiences, and also demand this from packaged food.NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Value-based consumption gaining traction
Sustainability
Marin Candy
Cheese: Marketed
as halal cheese
Value-based candy in Tyson Food bought
Doerrwerk buys
consumption up fruits that do
Indonesia. As a
country with a
a 5% stake in
Beyond Meat,
not meet the large Muslim investing in the
requirements of population, halal is manufacturer of
the trusted and “Beyond Burger”,
supermarkets considered ethical. which is made from
and turns them soya and peas.
Plant protein into fruit snacks. Launch: early
2017 – Indonesia
Consumers are redefining/reassessing their values and priorities,
placing more emphasis on value-based ethical consumption.
According to Euromonitor’s 2016 survey results, 30% of consumers
Food waste shop local, and buy eco-conscious/ethical products that make them
feel good. Over half buy from companies and brands that they trust
completely.New Insights Industry Overview Latest Trends In Packaged Food About Our Research
ABOUT OUR RESEARCH
20 new research markets added to the 2018 edition
New edition enhancements:
In this latest edition, we have expanded our packaged food research coverage from 80 to 100 countries,
which marks a significant enhancement to our already comprehensive industry coverage. As part of this
expansion we have also recalibrated and refined our modelled category sizes for the 110 countries that are
not directly researched. This brings improved and refined global and regional totals for overall packaged
food and its component categories.
There are five new countries in each of the four regions of Africa, Asia Pacific, Middle East and Latin
America. Our coverage moves to 98% of global GDP and 91% of the global population.
Refined modelled market sizes 20 New Research Markets: Packaged Food 2018
As part of this expansion in our country research Edition
coverage, we have also recalibrated and refined our Latin
modelled category sizes for the 110 countries that Asia Pacific Africa Middle East America
are not directly researched. These modelled sizes Bangladesh Angola Iraq Cuba
have been improved thanks to new in-country
research for the 20 markets listed, which in turn Côte
Cambodia Jordan El Salvador
has led to refined regional and global market sizes d'Ivoire
for the packaged food industry and its respective Laos Ethiopia Kuwait Honduras
categories.
Myanmar Ghana Lebanon Panama
Sri Lanka Tanzania Oman ParaguayABOUT OUR RESEARCH
New researched markets differ substantially in spending patterns
20 Newly Researched markets: Packaged food sales by type 2017
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Snacks Dairy products and alternatives Cooking ingredients and meals Staple foodsABOUT OUR RESEARCH Dairy key in Ghana, whilst staples most important in Côte d'Ivoire The newly added 20 markets, shown in the previous slide, are sorted from the largest total market value size, Iraq, to the smallest market, Cote d’Ivoire. When grouping all packaged food categories into the four types, staples, cooking ingredients and meals, dairy and alternatives, and snacks, it becomes obvious that the types of packaged food on which consumers spend their money varies quite strongly between the countries. However, it illustrates that in the majority of these countries, staple foods and dairy account for more than half of total packaged food value sales. Cooking ingredients and meals, as well as snacks, tend to account for smaller proportions of the share of wallet for consumers in these countries. In Ghana, dairy products and alternatives stands out for generating a very large proportion of packaged food sales. Sales in this category are projected to amount to USD2.8 billion for 2017. Around three quarters of this is generated by drinking milk products, of which powder milk accounts for the lion’s share (more than two thirds). A lack of refrigeration – either in the supply chain, the retailers or at home – remains a stumbling block in many less developed countries, and is the main reason for the strong position of powder milk within drinking milk products in these countries. Ethiopia stands out for generating a large proportion of sales of cooking ingredients and meals. The majority (77%) of these sales can be attributed to sauces, dressings and condiments, and within this, almost half of sales come from stock cubes and powders. In Côte d'Ivoire, sales of staple foods account for more than 50% of total packaged food value sales. Within staples, most sales stem from baked goods, which are traditionally of high importance in consumers’ diets and generate more than 80% of all sales of staples – which is the equivalent of more than 40% of total packaged food sales in the country. Further details on these additional 20 markets can be found in the country reports which will be published from October 2017 onwards.
ABOUT OUR RESEARCH
Our Packaged Food Team
Lianne van den Bos
Research Manager
lianne.vandenbos@euromonitor.com
Contributors:
Pinar Hosafci
Industry Manager
pinar.hosafci@euromonitor.com
Raphaël Moreau
Analyst
raphael.moreau@euromonitor.com
Wiebke Schoon
Project Manager
wiebke.schoon@euromonitor.comRELATED ANALYSIS Repositioning Indulgence To Remain Relevant In The Healthy Snacking Era – October 2017 System Refresher Premiumisation – August 2017 Experience more – August 2017 Connected consumers – August 2017 Healthy Living – August 2017
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