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PACKAGED FOOD 2018 EDITION: NEW INSIGHTS AND
SYSTEM REFRESHERNovember 2017
New Insights
Industry Overview
Latest Trends In Packaged Food
About Our Research
Asia Pacific and Middle East and Africa main global growth driversNEW INSIGHTS: INDUSTRY OVERVIEW
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World Packaged Food Top 10 Company Actual Sales USD Million 2012-2017 and CAGR
General Mills Inc
Kellogg Co
Lactalis, Groupe
Mars Inc
Kraft Heinz Co
Danone, Groupe
Unilever Group
MondelezInternational Inc
PepsiCo Inc
Nestlé SA
Global players in dairy and savoury snacks make gainsNEW INSIGHTS: INDUSTRY OVERVIEW
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.
Danone, Lactalis and PepsiCo benefit from their category presenceNEW INSIGHTS: INDUSTRY OVERVIEW
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Lay's Yili Men-gniu
Ara-wana
Kraft Knorr OscarMayer
MasterKong
Dori-tos
Heinz
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Packaged Food: Size and Strength of the Top 10 Global Brands
Retail Value Sales 2017 % CAGR, 2012-2017
2017 saw the continued
dominance of Asian
brands in the global
scene. Of the top five
packaged food brands,
three (Yili, Mengniu and
Arawana) come from
China.
However, the slowdown
in the Chinese dairy
market, as opposed to the
steady increase in the size
and penetration of the
global snacks markets,
has meant that PepsiCo’s
Lay’s is expected to
overtake Yili by the end of
2017.
Yili’s sales are projected
to contract by 1%, whilst
Lay’s is set to see value
growth of 4% in 2017.
Three of the top five global food brands are ChineseNEW INSIGHTS: INDUSTRY OVERVIEW
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.
Local brands are strong competition for leading international brandsNEW INSIGHTS: INDUSTRY OVERVIEW
Baby food, edible oils and savoury snacks are poster children for growthNEW INSIGHTS: INDUSTRY OVERVIEW
New Insights
Industry Overview
Latest Trends In Packaged Food
About Our Research
Eight most influential packaged food trends in 2017 and beyond NEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Healthy LivingRepositioning
IndulgencePersonalisation
Digital Convenience
Selling Trust Local over GlobalSeeking
ExperiencesSustainability
Healthy Living
It’s all about the process
Era of reformulation
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
this diagnosis is also driving sales of products such as dairy
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.
Health is the new premium in packaged foodNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Raw Chocolate, Planet Organic, London
Liquorice with added oats, containing “only 5 ingredients”
Orkla Confectionery & Snacks, Finland
Repositioning Indulgence
Quality over quantity
Bad for you, but good for the world
Functional indulgence
As a result of negative publicity on sugary snacks and increased
government pressure, manufacturers are having to rethink the
positioning of indulgent snacks. Emphasis instead is put on quality
ingredients, aiding social causes and functional indulgence to
make consumers feel better about consuming indulgent foods.
Sugar avoidance in snacks calls for a different indulgence strategyNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Premium ingredients –
focus on cocoa content and type: Ruby chocolate
Homeless people given the
opportunity to sell coffee
Czech Republic
Gabba chocolate,
Japan – to help with stress
Personalisation
Personalised products
Personalised labelling
Personalised nutrition
Personalisation has revolutionised the look and behaviour of
brands, creating a greater and deeper level of connection with
their audience. Personalisation manifests in itself in three key
forms – labelling/packaging, the product itself and personalised
nutrition.
Consumers want to have their sayNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
3D printing, Barilla Nutrigenomics in Real
Time: Campbell’s Personalised Meal Kit
Digital Convenience
Enhanced placement
E- and S-commerce
Local meets online
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
the internet as of 2016, and this is driving change in packaged
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.
Say it, scan it, buy it: New technologies for seamless transactionsNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
From online ordering to in-fridge delivery. ICA Infridge –
Sweden
Gifting through social media -
Starbucks and WeChat
Pointy – Ireland
Live stock information for
local shops
Selling Trust
Transparency
Regulation
Technology
Increased communication about food scandals around the world
has created a strong desire for consumers to know everything about
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).
A need to know everything about anything, everywhereNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Joe Seph’s premium
popcorn in transparent
packaging, UK, 2017
Mondelez switches Triscuit to Non-GMO
Verified.
The company communicated that consumer demand had
prompted the move, as more than half of
Americans are looking for non-GMO food
and beverages.
Block Chain:
A technology similar to Bitcoin that serves as a
distribution ledger which
records transactions between two
parties.
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
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.
Move away from big brands harmful for food multinationalsNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
The SuperBar fruit bar from
Greece prides itself on using
only locally produced fruits
Dr Oetker provides a platform to
connect consumers to
small local bakeries, Germany
Oreo Thins was initially launched in China to appeal to local consumers’
tastes. It was then rolled-out to
developed markets as a portion control
option.
Local over Global
Local sourcing
Provenance
Reverse innovation
Seeking Experiences
Retreat of the middle-classes
Less time
Children at older age
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
developed countries tracked by Euromonitor. The squeezed middle-
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.
Experience outside the home: Foodservice set to outpace retailNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Haribo store – Bonn
Anthony Bourdain’s USD60 million
international food hall development in NYC
Sustainability
Value-based consumption
Plant protein
Food waste
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
shop local, and buy eco-conscious/ethical products that make them
feel good. Over half buy from companies and brands that they trust
completely.
Value-based consumption gaining tractionNEW INSIGHTS: LATEST TRENDS IN PACKAGED FOOD
Doerrwerk buys up fruits that do
not meet the requirements of
the supermarkets
and turns them into fruit snacks.
Marin Candy Cheese: Marketed
as halal cheese candy in
Indonesia. As a country with a large Muslim
population, halal is trusted and
considered ethical.
Launch: early 2017 – Indonesia
Tyson Food bought a 5% stake in Beyond Meat, investing in the manufacturer of
“Beyond Burger”, which is made from
soya and peas.
New Insights
Industry Overview
Latest Trends In Packaged Food
About Our Research
Refined modelled market sizes
As part of this expansion in our country research
coverage, we have also recalibrated and refined our
modelled category sizes for the 110 countries that
are not directly researched. These modelled sizes
have been improved thanks to new in-country
research for the 20 markets listed, which in turn
has led to refined regional and global market sizes
for the packaged food industry and its respective
categories.
20 New Research Markets: Packaged Food 2018
Edition
Asia Pacific Africa Middle East
Latin
America
Bangladesh Angola Iraq Cuba
CambodiaCôte
d'IvoireJordan El Salvador
Laos Ethiopia Kuwait Honduras
Myanmar Ghana Lebanon Panama
Sri Lanka Tanzania Oman Paraguay
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.
20 new research markets added to the 2018 editionABOUT OUR RESEARCH
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%20 Newly Researched markets: Packaged food sales by type 2017
Snacks Dairy products and alternatives Cooking ingredients and meals Staple foods
New researched markets differ substantially in spending patterns ABOUT OUR RESEARCH
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.
Dairy key in Ghana, whilst staples most important in Côte d'IvoireABOUT OUR RESEARCH
Lianne van den Bos
Research Manager
Contributors:
Pinar Hosafci
Industry Manager
Raphaël Moreau
Analyst
Wiebke Schoon
Project Manager
Our Packaged Food TeamABOUT OUR RESEARCH
RELATED ANALYSIS Repositioning Indulgence To Remain Relevant In The Healthy Snacking Era – October 2017
System Refresher Premiumisation – August 2017Experience more – August 2017Connected consumers – August 2017Healthy Living – August 2017
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