A new report by Canadean analyses future trend scenarios for
the FMCG sector, identifying the best opportunities in consumer markets over
the next five years. Ronan Stafford, analyst at Canadean, explains why emerging
economies will play such a huge role in the years to come.
The value of emerging
economies
According to Canadean, the next wave of emerging economies
will have one of the deepest impacts on global consumer markets in the next
five years. The impact of changes in consumer behaviour and industry practices
in countries such as Mexico, Thailand and Egypt, and innovations from these
countries that are transferred back to developed economies, will be worth up to
US$1.66 billion worldwide in 2018. Ronan Stafford, analyst at Canadean, says:
“Companies have already seen the value in setting up innovation centres in
emerging economies to help tailor their products to consumer needs. However,
innovations from emerging economies are now also transmitted back to developed
countries.”
Frontier for new
packaging and flavours
Canadean finds that brands see the new markets in Latin
America, Asia and Africa as a frontier for packaging innovation and exciting
new flavours. “We increasingly see pack formats developed to keep costs low in
emerging economies used to target austerity-minded consumers in Europe.
Meanwhile, consumers are now highly aware of global culinary trends and want more
experiential flavours. This means that Far Eastern and African flavours and
ingredients are high in demand,” Stafford says. "The more big brands
invest in targeting consumers in Lagos, Jakarta and Hanoi, the better they will
meet the value and experience-seeking needs of consumers in New York, London,
Madrid and Sydney," he adds.
Low income, 45+ women
are early adopters
According to Canadean, women aged 45 and over from low and
middle income households in urban areas will be early adopters of innovation
arising from companies investing in the next wave of emerging economies.
Stafford says: “The low incomes of many early adopters in the next emerging
economies means that manufacturers need to simplify formulations. This includes
strategies such as using fewer ingredients to lower costs or investing in
lightweight packaging that is still robust enough to withstand poor quality
supply chains.”
Companies need to
target the next emerging economies now
In addition to measuring the value of targeting early
adopters in 2018, the Canadean report evaluates the likelihood and impact on
business practices of each scenario. When all three dimensions are analysed,
one scenario rises head and shoulders above the rest: The deep impact the next
wave of emerging economies will have on consumer markets. Stafford adds: “These
opportunities in the next emerging economies need to be targeted now, or
companies will lag behind their competitors on not just opening up new markets,
but in better meeting the needs of their current customers.”
Methodology
In order to identify the best opportunities in consumer
markets over the next five years, Canadean analysed 14 different scenarios
across three dimensions: The value of successfully targeting early adopters in
each scenario, the likelihood of it occurring, and the impact it would have on
business practices. Canadean studied the consumption habits of over 30
different consumer groups in order to identify the early adopters of innovative
products arising from the evolution of each scenario.
Canadean provides in-depth market research across the
fast-moving consumer goods (FMCG) sector, including food, packaging,
ingredients, soft drinks, beer, retail, foodservice, wines & spirits and
cosmetics & toiletries. Canadean specialises in conducting online survey
panels, producing in-depth market insight country reports through qualitative
and quantitative research. All numbers used in this text are based on
Canadean's report 'Early Signals: Future scenarios that will drive consumption
and product innovation over the next five years.'
