innovation in consumer goods

Accenture Research Intelligence. Insight. Impact.

CPG Innovation

Consumer Pulse Survey:

Global

October 2014

Copyright © 2014 Accenture All rights reserved. 2

Contents

Executive Summary

Detailed Findings


Industry trends drive both company innovation and consumer perception

Food & Non-

alcoholic

Beverages

Home &

Personal

Care

Consumer

Health

Fashion &

Luxury

Alcoholic

Beverages

• Commoditizing categories and tight margins

• High fragmentation and local tastes/ flavors

• Desire for health & wellness

• Small, frequent purchases Imperative to

catch consumer at point of desire

• Functional, “pro-quality” benefits

• Innovation to keep brands fresh

• Prominent “green” and all-natural brands

• Small, frequent purchases Imperative to

catch consumer at point of desire

Consumers scored Food & Non-alcobev

and Home & Personal Care companies

highest on all elements, reflecting a higher

degree of continuous, incremental

innovation

• Increase in consumers treating at home

• Consumers seeking “trusted brands”

• Regulatory constraints

• Schizophrenic consumer mixing fast fashion

and luxury brands

• Increasing non-traditional competition

• Complex supply chain and channels

• Achieving identity status and top-of-mind

destination critical

• Drink choice is part of personal brand, and

extremely occasion-based

• Desire for old-fashioned brands and quality

• Complicated route to market (e.g., distributors,

on and off-trade)

• Heavy regulation

Lowest perceived innovation, with

companies likely hampered by consumer

desire for “heritage” brands, as well as

regulatory constraints

Traditionally longer development – and

purchase – cycle drives lower levels of

perceived innovation

Despite strong HPC link, CH behaves more

like highly branded Fashion & Luxury –

perhaps because companies focus on

brand quality and trust vs. excitement

Survey Insights Industry Trends


Consumers across the globe are typically in sync when ranking performance of various CG&S industries

• Across most markets, Home & Personal Care and Food &

Beverages are seen as delivering the most radically new

products that meet consumer needs.

• The Alcoholic Beverage industry lags behind other industries

across the globe on most innovation metrics, with Japan as a

bright spot.

• Fashion & Luxury and Consumer Healthcare take the middle

slots in innovation performance, although Fashion & Luxury

leads in Sweden.


Regional consumer trends and economic conditions also impact innovation

• Rapid middle class

growth and youthful

population

• Increased marketing

for World Cup and

Olympics

• Sound macroeconomic

fundamentals

• Expanding incomes and

large population drive

massive growth

• Recent crackdown on

conspicuous

consumption

• Bifurcated population

(kings and paupers)

• Slow recovery from the

recession, with only

pockets of recovery

• Cautious consumer

• Significant private label

business

• Declining CPG market

values

• Sophisticated tastes

• Negative population

growth

• Stagnant to declining

CPG markets

• Strong local players,

seeking growth outside

home market

• Return to moderate

growth; consumer

confidence growing

• Permanent reset to

value and desire for

trusted quality

• Sophisticated and

profitable market

Emerging markets see

the highest innovation

levels. Are they reacting

to a flood of new

offerings as companies

enter and grow – and

invest to develop

products for local

tastes?

Are Japanese consumers

more demanding? Only in

alcobev – where

competition is fierce – do

they see innovation

higher than others

W. European

consumers are wary –

and also comfortable

advocates of

sophisticated private

label offerings in this

concentrated retail

market. As companies

struggle to preserve

margin, are they cutting

back on innovation?

Is innovation higher in the

large, diverse – and

competitive – US market?

Retail trade is more

fragmented than in W.

Europe – and unusual new

products frequently launch

in smaller store formats

(e.g., C-store).

UNITED STATES

BRAZIL

EUROPEAN UNION JAPAN

CHINA


• Brazil & China lead

the way in perception

of innovation

• Emerging markets

prefer to engage with

social media, with

developed markets

have a relatively

heavier focus on

traditional channels

(mail, phone,

company websites)

• Emerging markets

perceive more digital

engagement options

• Brazil and China,

joined by the US and

Japan, are most likely

to identify new

innovations in the

“green” space

Mobile interactions much more important in

emerging markets than in mature ones;

however, digital interaction imperative in even

in developed markets. Accenture’s Global

Consumer Pulse Research finds 25% of

consumers report they are more likely to do

business with a company that they can interact

with in a social media environment.

Are CPG companies providing more/better

digital options in emerging markets? Or are

expectations and digital engagement causing the

divide?

Are CPG companies launching more

green/eco/social products in these countries?

Or are consumers in these markets more likely

to seek out these types of innovations?

Emerging markets, Brazil and China, often surpassed developed markets in innovation perception and digital engagement

Is this new product innovation or new category

introduction (porting from developed markets)?

Or are company marketing/ education efforts

driving awareness?


Young consumers see most CPG innovation and are more engaged in social media

• Younger consumers worldwide see

more innovation, are more likely to

engage using social media and are

more satisfied with digital options

• Female consumers in Europe and

Brazil often see more innovation

• Higher income and employed

consumers tend to see more CPG

innovation, except in France

• In most countries, highest income

consumers are least likely to feel

ignored by CPGs, while in some

countries, such as Sweden, it is

the middle class who fares best

• Consumers disagree on whether

“green” products are new or

improved

• Married consumers and families

see more innovation – except for

Sweden

Are there any cultural differences in

interpretations of ‘new’ vs.

‘improved’?

Is there a notable difference in %

of males vs. females who are the

primary household shoppers

across countries?

At the same time, CPG companies

must figure out how to engage

older generations, with 65+

consumers outnumbering under-15

by 2030 (PEW Research)

Have companies focused

innovation on premium products?

Is this awareness or companies

targeting married/ families with new

product innovation?


HPC has the highest R&D spend– and innovation – but, Alcobev still leads in organic revenue growth, despite low innovation.

*See notes for companies included in average

Food & Non-

Alcobev

4.9%

1.3%

Organic Revenue

Growth

R&D Expense

% of Revenue

Home & Personal

Care

4.7%

2.3%

Organic Revenue

Growth

R&D Expense

% of Revenue

Alcoholic Beverages

5.2%

0.3%

Organic Revenue

Growth

R&D Expense

% of Revenue

Fashion & Luxury

n/a

0.3%

Organic Revenue

Growth

R&D Expense

% of Revenue

Sample of Global Companies: 3 Year Average Growth and R&D Investment

Higher R&D spend

seems to drive

highest perceived

innovation in Home

& Personal Care, as

well as Food & Non-

alcobev

Higher innovation

has not driven

higher organic

revenue growth

Premiumization, vs.

new products, may be

driving alcobev growth

R&D spend is relatively low in Alcobev

and Fashion & Luxury, likely due to

business model and consumers valuing

heritage brand over the “excitement” of

continual new products

Switching to private label

during the recession may

depress organic revenues in

Food and HPC


• While consumers perceive significant pockets of “real”

innovation, this is not translating to significant revenue growth

‒ In developed markets, innovation may simply be driving

complexity, cost and a jaded and overwhelmed consumer

‒ Vibrant emerging markets are seeing the most innovation

• Consumers feel online channels are best for feedback;

however, a number still do not feel companies are listening

anywhere

• Digital engagement correlates with higher sales – but options

lag the opportunity

• Whether considered new or improved, “green” is important –

especially in countries where consumers value sustainability,

even to the point of paying more for these products

• Strong regional variations drive the need for different

innovation strategies

Conclusions


• In our sample, Food & Non-Alcobev and Home

& Personal Care companies invest the most

R&D as a % of revenue (1.3 and 2.3%,

respectively – compared to 0.3% in Alcobev)

• This seems to be boosting innovation

perception, as Food and HPC also have the

highest perceived “true” innovation of all

segments; ~50% of consumers are always/often

seeing “radically new products” (compared to

31% in Alcobev)

• However, organic revenue growth remains

sluggish – and Food and HPC are outpaced by

Alcobev (4.9% and 4.7% vs. 5.2% on average,

last 3 years)

Conclusions: Heavy investment in innovation ≠ heavy pay-off in revenue growth


CPG manufacturers are answering the call for innovation but most products don´t capture $10mn or more in year-one sales

In the US, Innovation is increasing

mainly with brands extensions…

…But a majority of new products fail to

capture $10mn or more in year-one sales

New Product Pacesetters are the Top 100 new banners (food and beverage and

non-food) based on year-one sales across multi-outlet geography

86% of new products are brand extensions, 14% are new brands (cross industry)

*

Source: IRI 2013 New Product Pacesetters


The number of new products that surpass $100 million in their first year is low but increasing due to a broader coverage of channels

MULO: ( Multi-Outlet) grocery, drug, mass, dollar, club and convenience channels, plus Walmart,

including Sam‟s & BJ's Club Stores, and military commissaries

FDM: Food, drugs and mass channels

Bud Light, Allegra & Dannon Oikos presented the highest sales in the US

Source: IRI 2013 New Product Pacesetters


In Western Europe, most innovations fail in scale and longevity

According to Nielsen, only 24% of all

innovations achieve 52 weeks of sales…

…Of 12000 new introductions in 2011-13,

only 7 sold more than €10mn in the first year

Distinctiviness: Deliver a new value

proposition to market

Relevance: Generate a minimum of £/€10

mn in year one sales

Endurance: Achieve at least 85% of year

one sales in year 2*

Source: Nielsen Breakthrough Innovation Report –

European Edition 2014


In innovation, quality (not quantity) drives revenue

There are big differences in innovation activity levels across categories and the

evidence shows that quantity alone can not drive category growth

% of total category sales from new introductions

(2013)

Value % growth of category 2013 vs. prior year

Focus need to shift toward

“bigger” (quality) as a means

to improve success rates and

category growth

Different innovation level

across categories

Index of revenue of BEST SKU vs. category average

revenue per SKU (UK 2013)

Source: Nielsen Breakthrough Innovation Report –

European Edition 2014


Too many choices:

• Almost 80% of the 2,818 subscribers said they’d found an especially wide range of

choices and 36% of those said they were overwhelmed by the information they had to

process to make a buying decision. On the other side, considering at a local Stop & Shop: If one

consumer eyeballed 53 varieties of a product, he missed 21 others.

Choice is attractive to consumers, but does not yield sales

More and More:

• Between 1975 and 2008, the number of products in the average supermarket swelled from

an average of 8,948 to almost 47,000, according to the Food Marketing Institute, a trade

group. (In the past few years, that number has fallen slightly, in part because of a growth spurt

among smaller stores.)

Less variety may be less attractive for consumers but may generate higher sales:

• An experiment was conducted at an up-scale grocery store's jam/jelly selection. They had

348 different kinds of jam. A tasting booth was setup at different times, one with 6 different

flavors of jam, and another with 24 different flavors.

• More people stopped and sampled with 24 samples of jam, however, only 3% of the

users actually purchased a jar of jam.

• With the 6 flavor option, less people stopped by, but 30% of those people purchased a

jar of jam

New launches are not noticed, not a good return for investment

• There were 1,330 new fragrances launched onto the market last year. When Edwards first

began monitoring launches in 1984, there were just 38.

• According to Datamonitor, only 1 in 10 consumers notice products launches in-store

According to Michael Edwards’

compendium, Fragrances of the

World 2013, Source: Factiva International 2014


Companies are shifting to different types of innovation such as technology, new business models and collaboration

More and more consumers

goods companies are

increasing focus on

technology by creating

dedicated innovation labs in

startup hubs such as Silicon

Valley, New York, and

London and investing in

startup accelerator

programs to establish

direct access to innovation

from entrepreneurs…

Other companies such

as P&G, combines a

novel business model with a tried-and-true

brand to

promote the creation of

fresh and profitable

services and solutions…

• P&G’s incubator, FutureWorks,

launched Multi-functional team

leading the scaling of Tide

Dry Cleaners and Mr Clean

Carwashes

• This team works with

franchisees to find sites, build

and open stores, and drive a

best in class retail stores

Open innovation—

collaboration by internal

company members with

external partners…

• In February, Coca-Cola

purchased a 10% stake in

Green Mountain for $1.25B

• In May, announced it would

increase stake to 16%

• Partnership is to co-invest in

cold-drink dispensing


Unilever puts greater focus on innovation to drive up prices

• In developed markets, most consumers are not seeing a

pick-up in the economy and they are increasingly value

conscious while competition is increasingly high.

• Unilever is taking balanced decisions on pricing,

always with a watchful eye on consumer

affordability

• Unilever is putting a greater emphasis on innovation

to drive up prices in European markets as sales for

the 2nd quarter has declined by 0.8%.

• Unilever is not increasing marketing spend in

Europe to boost sales, however, pouring more

marketing money into emerging markets.

Unilever says innovations such as

its compressed deodorant cans are

helping boost sales


Innovation is also not driving gross margin; HPC and Food have the highest innovation rates and stagnant/ declining margin

45

50

55

60

2008 2009 2010 2011 2012 2013

Alcobev

Fashion

HPC

Food & Non-Alcobev

% Gross Margin Evolution by Industry:

Sample Companies • Fashion presents the

highest % of gross margin

across the 4 industries

• Alcobev showed resilience

in recession, but with

recent dip

• Home & Personal care

margin has been stagnant

• Recession hit Food & Non-

Alcobev hard – with only

minor recovery


• The large and important Western European market

sees relatively low innovation, with average industry

scores ranging from 25 to 44% (and Sweden much

lower)

• By contrast, a significant number of Brazilians see

radically new products, ranging as high as 71% in

HPC

• Chinese consumers perceive the second highest truly

new innovation (vs. product improvements)

Conclusions: Vibrant emerging markets are seeing the most innovation


Companies are investing heavily in emerging market innovation

• PepsiCo opens food and

beverage innovation center in

DuBiotech to drive growth

across the Middle East

• The new facility is equipped

with an advanced culinary

center and test laboratories

focused on developing and

tailoring PepsiCo brands for

distinct, locally relevant taste

preferences throughout the

region.

• P&G opens $250 million

Innovation Centre in

Singapore to generate new

product formulations,

advanced packaging and

prototypes – uniquely

designed to deliver value for

consumers in Asia and the

rest of the world

• General Mills opened the

company's first innovation,

technology and quality center

in China, which is $15 million

facility

• It will focus on developing

high-quality products for

Chinese consumers including

snacks, convenient meals,

yogurt and super-premium ice

cream.

• Unilever’s global Enterprise

Support and IT Innovation

centre in Bengaluru

inaugurated

• Largest operating centre for

Unilever will support HUL as

well as the global Unilever

business

• The centre currently houses

1400 people including

Unilever employees & co-

located IT vendor partners


Unilever takes HUL strategies like small packs, cheaper variants to developed

markets. “If we had that in the US, there is no reason why we would be hit in a

recession. We have seen that we tend to do well in markets that have a wide portfolio

of brands in a category. So, we are trying to do the same in other markets," Polman

had said

Successful innovations are flowing from emerging markets to a global audience

• Grameen Danone produces a yogurt known as Shokti, which is fortified to meet 30% of

children’s daily requirements of vitamin A, iron, zinc and iodine. The goal was to

increase consumption of these yogurts by children in poor, rural areas of Bangladesh

• When fresh milk prices doubled in Bangladesh in 2008, Grameen Danone was forced to

raise the price of Shokti, and sales plummeted. Danone experimented with selling

nutritious foods to very poor people but struggled both to earn a profit and to

deliver nutrition. It responded to low sales by beginning to sell yogurts to wealthier

urban consumers, alongside in rural areas

• Urban sales grew quickly and they made up 80% of Grameen Danone sales. While

re-orienting sales had kept the company afloat, it had diverted it from its original purpose

of providing nutrition to the rural poor

• In Brazil, babies often sleep with their parents, and many families were poor. What

consumers really care about is keeping the baby dry all night.

• P&G launched an affordable, ultra water-tight nappy, without fussy details. It

developed a lower-priced diaper line to make it attractive for parents who couldn't

afford its more expensive diapers.

• The basic tier of products now exists around the world under different brand names,

such as Simply Dry in Western Europe.


• Depending on segment, 25 to 32% of consumers don’t feel like

companies are incorporating their feedback in product

development ‒ Emerging markets are the exception, especially Brazil, where an

overwhelming majority feel listened to, and most channels are rated

positively

‒ Japanese consumers feel most ignored, with ~60% feeling

companies are not incorporating feedback

• There is no consensus on the most effective channel; only 20 to

30% of consumers picked each channel

• ~Half of consumers feel company websites and/or social media

are the most effective channel(s); this is especially true in

emerging markets

• However, CG&S lags other industries in extent of investment in

social media, despite open innovation being the 2nd rated reason

for social media initiatives; CG&S also ranks last in using social

media to monitor trends for product development*

Conclusions: Consumers feel online channels are best for feedback; however, a number still do not feel companies are listening anywhere

Sources: Accenture Consumer Innovation Pulse Survey, 2014; Accenture Business Agility Study


• 50%+ of consumer feel company websites and social

media are the most effective channels for providing

feedback

• Only between 30 and 40% of consumers feel

companies perform well at providing digital options

‒ This is especially low in Western Europe

‒ Even in emerging markets, ratings barely exceed

50% at most

Conclusions: Digital engagement options seem to lag the opportunity


European countries present the highest Digital TV and internet penetration rates

Digital TV household penetration in

selected countries worldwide in 2012

Top 50 countries with the highest

internet penetration rate


But China and India are the next frontiers for digital and social media marketing of consumer goods and services

• Over the next decade, China is expected to reach 70-80% penetration and the

penetration rate in India is also expected to increase.

• The opportunities are endless for companies that are willing to embrace the next wave of

marketing and embrace digital and social media marketing

Large base of internet users (618 mn users in China & 164.81mn users in India with low

penetration rates 45.8% & 11.4% respectively)

Due to the relatively low rates of PC usage, both countries have a strong mobile

penetration, (number of Internet subscribers in India is 164.81, with 7 out of 8 accessing the

Internet from their mobile phones. In China, over 618 mn Internet users, 80% of which access

the Web via their smartphones)

Many users in both China and India are active social media users (India has c91mn social

media users or 55% market penetration. The penetration rate in China is 91%)

Both economies have large and growing middle classes whose increasing consumption of

everything from smartphones to degrees from overseas universities will play a large role in

driving domestic and international aggregate demand.

China and India have many similarities and differences within the digital and social media

landscape


Accenture research showed direct correlation between CPG brand

website usage and in-store purchase behavior

Online brand presence matters – as does fresh and engaging content

Brand visitors spend more

• CPG brand website visitors buy 37%

more in store and spend 53% more

on the entire category

• Consumers on the best evaluated

websites spent over 200% more on

the brand than non-visitors

• Price paid per unit in brand at the best

of the ten CPG brand websites was 2%

higher than for non-visitors in brand

Successful brand sites…

• Provide compelling reason to

buy (not just coupons)

• Update content at least weekly,

e.g., pulse surveys, user

generated reviews, status on

weight loss plans

• Engage visitors, e.g., demos, live

chat, apps and games

Sources: Accenture/ dunnhumbyUSA, comScore research, 2011


• May differentiate in a crowded market (Japan, alcobev)

• Significant number of consumers still perceive no green

products

• 55% of global respondents say they are willing to pay

extra for products and services from companies

committed to CSR (an increase of 1000 basis points in the

past two years) *

• “Green” is particularly important in emerging markets, with

about two-thirds of consumers in APAC, LATAM and MEA

saying they would pay more – and this figure is increasing

• Willingness to pay extra is lower in North America and

Europe (42% and 40%, respectively), but this number is

also increasing

• Products with sustainability claims or otherwise linked to

sustainability programs grew sales between 2 and 5%

from last year (vs. 1% for products without claims)

Conclusions: While “green”/ sustainable products are more seen as improved vs. new, this is becoming a required investment

Sources: Accenture Consumer Innovation Pulse Survey, 2014; “Doing Well By Doing Good’ – Nielsen, June 2014

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Contents

Executive Summary

Detailed Findings

29 Copyright © 2014 Accenture All rights reserved.

Consumers feel fast-moving Food & Beverages and Home & Personal Care lead in innovation, while Alcoholic Beverages lags

Q1. How often does each of the following types of companies address your needs by developing radically ‘new’

products versus making product improvements? ?

Top 2 : Always / Often

Base: All respondents (n=11360)

Alcoholic Beverages

Fashion and Luxury

Consumer Healthcare

Home & Personal Care

Food and Beverages

31%

40%

40%

51%

48%

Global

• Highly competitive and

commoditizing Food &

Beverages and Home &

Personal Care experience

highest innovation

• Brand dependent industries are

less likely to develop radically

new products

• Alcoholic beverages’ focus on

heritage brands results in few

truly “new” products



39% 26%

20% 31% 24%

28% 26%

Fashion and Luxury

46% 39%

36% 56%

32% 41%

36%

Consumer Healthcare

44% 32%

28% 55% 36%

39% 32%

Home and Personal Care

59% 47%

33% 71%

52% 49%

39%

Food and Beverages

53% 38%

Alcoholic Beverages

58% 42%

51% 41%

35%

40%

33%

36%

27%

36%

Germany China Sweden Brazil France US UK Japan



Emerging markets perceive higher innovation than developed – though US consumers also see more “new” products

• Note: Chinese consumers also

perceive more innovation (new

products vs. improvements)

than average – is this an

emerging markets bias?

Perhaps more new products

are entering the market – or

companies are innovating

more heavily – or there is more

competition (MNC vs. local)

• Japanese consumers have

unusually high perception of

innovation in Alcobev; is there

higher innovation in this market

which has been declining? By

contrast, they perceive the

lowest innovation in Fashion; is

this higher expectations?

• Emerging markets Brazil

and China see more “new”

products

• Of developed markets, US

consumers see the most

“new” products

• Brazilians perceive the

highest innovation, while

Swedes feel there are few

truly “new” products



Fashion and Luxury

Consumer Healthcare


Food and Beverages

Alcoholic Beverages



There seem to be clear regional biases in how consumers perceive existing innovation

Top 2 : Always / Often

39%

44%

32%

36%

25%

51%

49%

41%

39%

28%

58%

71%

55%

56%

31%

50%

53%

42%

41%

38%

W Europe US Brazil APAC

43%

44%

35%

35%

27%

55%

62%

47%

48%

37%

Developed Emerging


Consumers find online feedback most effective; a significant number do not feel companies are listening

Q2. Which method(s) do you feel is the most effective way that companies incorporate your suggestions and

feedback when they develop and/or enhance products? ?

None, companies

are not incorporating

my suggestions

Phone

Mail

In person

Social media

Company website

23%

24%

25%

11%

29%

26%

22%

25%

24%

11%

25%

30%

23%

23%

21%

11%

28%

28%

22%

23%

24%

10%

29%

29%

20%

32%

27%

10%

20%

22%

Food and

Beverages

Home and

Personal Care

Consumer

Healthcare

Alcoholic

Beverages

Fashion

and Luxury

Global


• Company websites are

still the top target for

feedback

• Social media is a strong

second choice

• Consumers feel phone

is the least useful

• Over a quarter of

consumers don’t feel

like companies are

listening; this is

strongest in Alcobev –

where innovation is also

lowest


Brazilians feel company websites are most effective, by a wide margin




25%

23% 24%

Fashion and Luxury 33% 26%

42% 24% 26% 26%

Consumer Healthcare 29% 28% 42% 25%

28% 25%

Home and Personal Care 34% 28%

42% 27% 29%

27%

Food and Beverages 30%

28% 40% 27%

27% 27%

25% Alcoholic Beverages

31%

23% 29%

29%

25%

32% 20%

22%

22%

30%

38%

30%

Company Website

China Japan Germany Sweden Brazil France US UK

• Brazilians are

significantly more likely

to find Company

Websites an effective

feedback venue

• Germans and Chinese

also support this

channel

• Japanese are least

supportive – though

they feel Company

Websites are

significantly more

effective than other

channels


In Social Media, there appears to be an emerging market bias, with Brazil and China both peaking




27%

28%

25%

29%

30%

Alcoholic Beverages

19% 17%

35% 15%

21% 21%

Fashion and Luxury

20%

20% 42%

17% 23%

22%

Consumer Healthcare

17% 16%

36% 16%

21% 18%


19%

20% 39% 18%

22% 21%

Food and Beverages

20% 21%

40% 18%

25% 22%

10%

11%

9%

9%

11%

Social Media


• Brazilians lead again in

finding Social Media

effective

• The UK and US have

the next highest levels

of support

• Japanese consumers

are significantly less like

to find Social Media a

good feedback tool


Again, Brazil leads in believing In Person feedback most effective; in most categories, the US and France also agree




10%

8%

22%

7%

22%

8%

24%

8% 21%

22%

27%

20% 28%

18%

24% 18%


22%

Alcoholic Beverages 18% 18% 32% 22%

21% 18%

Fashion and Luxury 19%

16% 34% 24% 24%

18%

Consumer Healthcare 21%

19% 37% 26%

25% 20%

Home and Personal Care 19%

16% 37% 28%

In person


• In Person remains a

relatively strong channel

for feedback

• Once again, Brazilians

lead in finding this

channel effective

• The US and France also

support this channel

• Similarly, Japanese do

not feel In Person

feedback works


French consumers find Mail to be an effective feedback channel, with Brazilians and Chinese also supporting




Alcoholic Beverages 22%

10% 27%

32% 14%

15%


15% 33%

35% 18%

17%


15% 33%

36% 19%

17%


15% 33%

40% 21%

17%


17% 33%

37% 20%

19%

9%

28% 7%

29%

27%

8%

7%

26%

27%

8%

Mail


• Mail is the channel

French consumers find

to be most effective for

feedback

• This is seconded by

Brazilians, Chinese and

to a lesser degree,

Germans

• The UK, US and

Sweden all do not

support Mail

• Again, Japanese

consumers are unlikely

to think Mail is effective


Phone is not widely favored as a feedback tool, with the Chinese standing out in their moderate support




20%

3%

3%

3%

3%

2%

21%

20%

18%

19%

7%

2% 4%

10% Alcoholic Beverages 7%

6%


3% 12%

7% 8%

5%


4% 15%

9% 10%

7%


3% 11%

10% 8%

7%


3% 12%

8% 8%

5%

Phone


• Almost all countries find

Phone the least

effective feedback

channel

• China supports Phone

almost as strongly as In

Person feedback

• Brazil’s support is

relatively low, though

higher than almost all


On average, over a quarter of consumers don’t feel companies incorporate feedback, with the Japanese significantly more negative




20%

61%

27%

21%

17%

59%

61%

18%

60%

63%

Alcoholic Beverages

34% 42%

15% 30%

37% 40%

Fashion and Luxury

31% 39%

7% 27%

29% 37%

Consumer Healthcare

32% 36%

7% 24%

27% 37%


28% 35%

5% 20%

25% 35%

Food and Beverages

30% 34%

6% 23% 24%

33%


None, companies are not incorporating my suggestions

• Japanese consumers do

not feel companies are

listening to feedback in

new product

development

• Emerging markets are

the most positive, with

most consumers feeling

that companies

incorporate feedback

• Consumers feel alcobev

companies listen least

to their feedback


Overall, digital options are surprisingly rare – given the ubiquity of digitization and the growth of mobility

Q3. How well do each of the following types of companies develop products that provide you a “digital option”

when using the product? ?






Top 2 : Very well / Well Global


• Consumers feel there are the

fewest options to engage

digitally with alcobev products,

perhaps due to regulatory

constraints

• Consumer health also lags,

somewhat – again, this may be

regulation-driven; however, it

seems a missed opportunity

given consumer focus on health

& wellness – and the desire for

product information



Fashion and Luxury

Consumer Healthcare


Food and Beverages

Alcoholic Beverages



Once again, consumers see digital options varying by region – with emerging market consumers perceiving significantly more

31%

30%

27%

28%

24%

41%

37%

35%

34%

27%

51%

53%

50%

52%

36%

40%

43%

34%

40%

34%


32%

31%

28%

28%

24%

47%

51%

42%

49%

37%

Developed Emerging

Top 2 : Very well / Well




13% 36% 25%

27% 22%


15% 52% 30%

34% 27%


14% 50%

35% 24%


29%

16%

21%

22%

17%

22%

15% 53% 35%

37% 26%


17% 51%

32% 41%

31%

45%

39%

37%

48%

50%



Brazil leads, with China also more satisfied with digital options

Top 2 : Very well / Well


• Brazilian consumers

lead in finding “digital

options”, closely

followed by China

• US and German

consumers also

perceive a relatively

high number of “digital

options”

• In Sweden, consumers

see a significant lack of

“digital options”;

Japanese perception

also lags







Q4. When each of the following types of companies develop green/eco-friendly/socially conscious products do

you feel these are new products or product improvements? ?

Consumers more likely think “green” products are improved vs. new; “green” products seem less common in highly “branded” categories

New Products Products Improvement

47%

44%

50%

54%

53%

Global


Companies Not Developing

Green Products

33%

30%

26%

20%

23%

Most perceived “green”

products in Food & HPC;

high incidence in HPC may

be driven by the many

“green” home care

products

Alcobev lags in perceived

“green” development, with

fewer category

opportunities and a

stronger emphasis on

heritage brands



Fashion and Luxury

Consumer Healthcare


Food and Beverages

Alcoholic Beverages



Consumers in Western Europe see the least “green” innovation, in sharp contrast to those in APAC

18%

20%

19%

19%

15%

28%

31%

27%

25%

18%

26%

31%

29%

30%

19%

28%

29%

26%

30%

24%


53%

55%

49%

44%

46%

50%

51%

46%

39%

38%

51%

51%

49%

45%

42%

54%

55%

54%

47%

54%


29%

25%

32%

37%

40%

21%

18%

27%

35%

44%

23%

18%

22%

26%

39%

18%

16%

20%

24%

22%


New Products Products Improvement Companies Not Developing

Green Products



Fashion and Luxury

Consumer Healthcare


Food and Beverages

Alcoholic Beverages



Both emerging and developed markets are more likely to see “green”

products as “improvements” vs. “new”; emerging markets perceive that

more companies are developing green products

50%

52%

47%

42%

43%

56%

57%

55%

48%

54%

Developed Emerging

New Products Products Improvement

26%

23%

30%

36%

39%

17%

14%

18%

21%

24%

Developed Emerging

Companies Not Developing

Green Products

23%

24%

23%

22%

18%

27%

30%

27%

30%

21%

Developed Emerging



14% 18%

16%

Fashion and Luxury

18% 20%

30% 18%

25% 19%

Consumer Healthcare

16% 17%

29% 20%

27% 22%


16% 17%

31% 23%

31% 23%


19% 26%

18% 28%

20%

Alcoholic Beverages

13% 17%

19%

27% 29%

26%

31% 27%

26%

31%

22%

26%

30%



European countries are least likely to feel “green” products are “new”

New Products


• Japan, the US, Brazil

and China all are more

likely to believe

green/eco-friendly/social

conscious products are

“new” vs. product

improvements

• Japan especially stands

out in seeing “green”

alcobev products as

“new”

• As a whole, the UK,

France, Sweden and

Germany don’t perceive

“green” products as

“new”



56% 43% 42%

48% 38%

36%

Fashion and Luxury 53% 41%

45% 43% 39%

38%

Consumer Healthcare 59% 48%

49% 49%

46% 40%

Home and Personal Care 61% 53%

51% 57% 51% 47%

Food and Beverages 61% 52%

51% 52%

50% 47%

Alcoholic Beverages

58%

43% 57%

49%

46%

57%

58%

38%

41%

44%



Across the board, consumers are more likely to see “green” products as “improved” vs. “new”

Products Improvements


• Germany and China are

significantly more likely

to perceive “green”

products as “improved”

• The UK and Japan are

the least likely to view

“green” products as

“improved”



27% 17%

27% 18%

31% 40% 39% 39%

44% 48%

Fashion and Luxury

30% 39%

26% 39% 35%

42%


35% 22%

31% 27% 37%


30% 18%

20% 18% 30%

Food and Beverages

25% 29%

23% 30%

21% 33%

21%

21%

29%

20% 30%

36%

Alcoholic Beverages



Given the importance of CSR, there is still a relatively strong perception that companies are not supporting this desire

I do not feel companies are developing green/eco-friendly/socially

conscious products


• The UK leads in feeling

that companies are not

developing “green”

products

• The Chinese and

sometimes Brazilians

and US consumers are

least likely to feel

companies are not

developing “green”

products

• Countries generally see

Alcobev companies as

developing the fewest

“green” products


Appendix


Conclusions - IRI


• Unilever’s Magnum brand

generated year-one sales of

$95mn & 2nd year, $136mn

• Kraft Foods' MiO generated

cumulative #1 & #2 year

sales of $268mn. New 30%

of buyers to the category

• Milo’s Kitchen Year-one sales

exceeded $75 million and year-two

sales grew past $100mn

• Hershey’s Reese’s Minis

generated over $100mn in year

one sales


• Winning in the Digital Channel: The E-Commerce Opportunity in Consumer Goods: http://www.accenture.com/us-en/Pages/insight-winning-digital-channel-

consumer-goods-ecommerce.aspx

• Redrawing the Frontiers: http://consumergoods.edgl.com/column/Redrawing-the-Frontiers92925

• Data Transformation: Winning and Retaining the Digital Consumer: http://www.accenture.com/us-en/Pages/insight-winning-digital-channel-consumer-

goods-ecommerce.aspx

• The Future Of Consumer Goods: Moving From Analog To Digital: http://www.slideshare.net/xavianaya/accenture-

cpgdigitalrevolutionmovingfromanalogtodigitaloperatingmodel

• Innovation in Consumer Products How to achieve high performance through new product innovation:

http://www.accenture.com/sitecollectiondocuments/pdf/consumerproductsgrouppov_103008_fnl.pdf

• Research Shows Digital IT Transformation Boosts CPG Profits: http://www.accenture.com/us-en/Pages/insight-digital-it-transformation-for-consumer-

packaged-goods.aspx

• Lacoste partners with Accenture to establish online presence in China: http://www.retailinasia.com/article/sectors/fashion/2013/08/lacoste-partners-

accenture-establish-online-presence-china

• Company will invest $200 million in its plan to upgrade fulfillment, mobile, and analytics capabilities: http://www.retailsolutionsonline.com/doc/belk-chooses-

accenture-to-aid-in-omni-channel-transformation-0001

• Digital Delivery: How CPG Companies Can Entice E-Consumers: http://consumergoods.edgl.com/column/Digital-Delivery--How-CPG-Companies-Can-

Entice-E-Consumers94784

Accenture PoV for reference

http://www.accenture.com/us-en/Pages/insight-winning-digital-channel-consumer-goods-ecommerce.aspx

















http://consumergoods.edgl.com/column/Redrawing-the-Frontiers92925
























http://www.slideshare.net/xavianaya/accenture-cpgdigitalrevolutionmovingfromanalogtodigitaloperatingmodel








http://www.accenture.com/us-en/Pages/insight-digital-it-transformation-for-consumer-packaged-goods.aspx



















http://www.retailinasia.com/article/sectors/fashion/2013/08/lacoste-partners-accenture-establish-online-presence-china















http://www.retailsolutionsonline.com/doc/belk-chooses-accenture-to-aid-in-omni-channel-transformation-0001




















http://consumergoods.edgl.com/column/Digital-Delivery--How-CPG-Companies-Can-Entice-E-Consumers94784
















