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Emerging markets overtake developed in FMCG spend

24/05/2017

Emerging market spend on FMCG grew by $34 billion in 2016, up +6% vs last year, while developed markets sales were flat

Kantar Worldpanel’s fifth annual Brand Footprint study is published today, ranking the most chosen FMCG brands across the world and revealing a macro view on the global FMCG industry

Key facts: brands

        • Coca-Cola remains the world’s most chosen brand—for the fifth year running
        • Colgate is the second most chosen brand in the ranking and is the only brand chosen by more than 50% of the global population
        • Dettol is the fastest rising brand in the ranking, breaking into the Top 50 for the first time
        • Sunsilk is new in the Top 10 with a 12% rise in Consumer Reach Points

Key facts: the global FMCG industry

        • Each branded consumer decision is worth $1.92
        • Emerging markets account for 51% of FMCG spend
        • Local brands account for 72% of FMCG market growth in 2016

London, UK: 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 today launches 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.”

Emerging markets overtake developed in FMCG spend

Emerging markets overtake developed in FMCG spend

Get in touch

Jason Yu
Managing Director, Greater China

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