leading the way in latin america alfredo costa client services director, nielsen brazil september...
TRANSCRIPT
LEADING THE WAY IN LATIN AMERICA
Alfredo CostaClient Services Director, Nielsen BrazilSeptember 30, 2014
BRAZIL
Copy
right
©20
13 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
2
AGENDA
INTRODUCTION
BRAZIL MACROECONOMIC HIGHLIGHTS
FMCG’S PERFORMANCE
CONSUMER NEW SHOPPING DYNAMIC
OPPORTUNITIES TO GROWTH
REFLECTIONS AND OPPORTUNITIES
Copy
right
©20
13 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
3GDP and GDP per person, comparison between Brazilian states and world countriesSource: The economist, IBGE (Brazilian Institute for statistics and Geography) and IMF
A COUNTRY WITH CONTINENTAL DIMENSIONSFrom The Economist: Comparing Brazilian States With Nations (GDP and Population)
BRAZILIAN EQUIVALENTS – COMPARE-CABANA
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
4
DESPITE CHALLENGES, BRAZIL’S ECONOMY IS STRONGER
Sources: ABEP and IBGE
HOUSEHOLD CONSUMPTION
INCOME/CREDITINVESTMENTS
SOCIAL POLICIES
% of population by socioeconomic level
2008 2012
20%15%
24%23%
25%26%
18%22%
9% 10%
4% 4%0.60% 0.50%
DE C2 C1 B2 B1 A2 A1
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
5
FMCG CONSUMERS “TRADE UP”Categories that drive growth are developing in higher value segments
ACCESS
11
WO MOVE + TRADEDOWN
9
TRADE UP
53
20
2009
166
30
117
20
2013
39
170
239
ACCESS WO MOVE + TRADE DOWN TRADE UP
2009
166
2013
239
W. O. MOVEMENT
TRADE DOWN
TRADE UP
ACCESS MATURE
CATEGORIES LIFECYCLE
Source: Nielsen Retail Index and Homescan
FMCG SALES: R$
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
6
TRADING UP: FOUR KEY DRIVERS
Source: Nielsen Retail Index and Homescan
DEODORANTS YOGURT
CLEANSERSCONVENIENT BEERS
HEALTHY
INDULGING
TRADE UPSOFISTICATED
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
7
GLOBAL BRANDS FOLLOWING “TRADE UP” TREND
Source: Nielsen Retail Index - YTD 14 Avg Price vs T. Category – Based on 16 global brands
OPPORTUNITIES TO DRIVE SUSTAINABLE GROWTH
Global brands’ prices are an
average of 37% above category
The average relative distribution is around 17% (compared to category level)
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
8
2014 IS A CHALLENGING YEAR FOR BRAZIL
Sources: IBGE, FGV and Nielsen Homescan
INCOMEUSD
14.868EXPENSES
USD 15.844
MID-SOCIOECONOMIC LEVEL spends 15% more than it earns
Income vs Expenses
SOCIAL PROTECTION NETWORK EMPLOYMENT AND INCOME CREDIT
Average % of income committed to credit
MARCH'10 MARCH'11 MARCH'12 MARCH'13 MARCH'14
36.5 40.1 42.4 44 45.7
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
9
INFLATION COULD AFFECT CONSUMPTION
Sources: IBGE, FGV, Nielsen Analytics and Nielsen Homescan
Food & Beverages
1.5% Government-managed prices
8.5%6.5% HPC5.9%
IPCS2013
How much BR is sensitive to price?
129
100LatAm Average
Brazil
40% 31% 22%
SHARE OF POCKET OF FMCG EXPENSES(By Socioeconomic Level)
LOWSEL
MIDDLE SEL
HIGHSEL
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
10
-0.4
-2.6
0.3
2
-0.3
-3.6
2.6
9.3
WHOLESALERS PLAY AN IMPORTANT ROLE
Volume Change - 2013 vs. 2012 – Total Brazil - Source: Nielsen| Retail Index| Cash & Carry Scantrack
CASH & CARRY VOLUME CHANGE (2012-2013)
WHOLESALERDRUGBARTRADITIONALMINIMARKETS
SUPERMARKETS
HYPERMARKETS
TOTAL PRODUCT AREA
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
11
AND THERE STILL IS ROOM TO GROW
Wholesaler household penetration
% quarterly penetration in Wholesaler channelSource: Nielsen | Homescan
Channel still reaching only 20% of households across the country
Series1
18.8 19.417.9 18.7 18.9
20.221.9
20.6
Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
12
CHANNEL STRATEGY SHOULD BE REINFORCED
Volume Change - 2013 vs. 2012 – Total Brazil - Source: Nielsen| Retail Index| Cash & Carry Scantrack
Changes in trip frequency vs. average expenditure, 2013-2012
HYPER MARKET
SUPER MARKET
NEIGHBORHOOD WHOLESALER BAR/TRADITIONAL
GROCERY STORE
TOTAL CHANNELS
DRUG
-4
-17
1
7
1
-2
-11
3
6
-2
10
14
35
FREQUENCY AVERAGE TICKET $
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
13
PACK STRATEGY ALSO OFFERS AFFORDABILITY
60%of the top 20 categories
Family-sized packages have gained importance for
40%of the top 20 categories.
Smaller packages have gained importance for
+ =
Source: Nielsen Retail Index
DIVERSIFIED CHANNELS
Increasing importanceof larger packages
9.88.9
COOKIESup to 100g
3.7 4.8
BEERup to 349ml
LOWERFREQUENCY
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
14
CONSUMERS WANT TO MAINTAIN NEW LIFESTYLESThey are making choices to keep the level of comfort they have acquired
Diversify channelsLOOK FOR VALUE
Reduce trips to the point of purchaseMONTHLY GROCERY SHOPPING
Package sizesSPEND ALTERNATIVES
Switch to cheaper brandsTRADE-DOWN
Reduce volume RATIONALIZE PURCHASES
REDUCE OUT-OF-HOME CONSUMPTION and discretionary services
WHERE TO LOOK FORGROWTH IN THE NEXT YEARS?
STREAMLINEEFFORTS
BROADENHORIZONS
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
16
THE INTERIOR IS KEY TO FMCG’S FUTURE
ACTUAL GDP2013* vs. 2009
NIELSEN PRODUCT AREAS
2013 vs. 2009
+1.6% +3.0%
+4.0% +4.9%
Leading brands’average share
7.5%inferior
Key accounts’Average share
39%interior
Source: Nielsen Retail Index and IBGE
CAPITAL
INTERIOR
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
17
INTERIOR: STILL ROOM FOR FMCG DEVELOPMENTHigher access and trade-up are still great leverages to be used in BR interior
68
69
88
PENETRATION INDEX (INTERIOR/CAPITAL)
Source: Nielsen Homescan | Penetration of the interior divided by penetration of the capital
CONSUMERS IN THE INTERIOR ARE AT AN EARLIER STAGE OF CONSUMPTION
Soy-based beverage
Packaged Toasted Bread
Mouthwash
ACCESS CATEGORIES
118
READY-TO-DRINK JUICE
POWDERED JUICE
READY-TO-USE SAUCE
TOMATO PASTE
105
87
86
TRADE-UP IS CAPABLE OF REACHING MORE
HOUSEHOLDSTRADE-UP CATEGORIES
REFLECTIONS AND
OPPORTUNITIES
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
19
INFLATION SHOULD HOLD UP AND
CONTINUE THREATENING
CONSUMERS’ POCKET
THE INTERIOR SHOULD CONTINUE
TO PLAY AN IMPORTANT ROLE IN
GROWTH, AND LEADERS’ BRANDS
STILL HAVE ROOM TO GROW ACROSS SMALL CITIES
REFLECTIONSB R A Z I L
CONSUMERS ARE MAKING CHOICES TO
MAINTAIN THEIR LIFESTYLE LEVEL, SO AFFORDABILITY IS A KEY DRIVER TO BE
CONSIDERED
Copy
right
©20
14 T
he N
iels
en C
ompa
ny. C
onfid
entia
l and
pro
prie
tary
.
20
OPPORTUNITIESB R A Z I L
FOCUS ON PRICE AND PORTFOLIO
STRATEGIES TO DELIVER THE
AFFORDABILITY NEEDED BY THE
CONSUMER
SHORT TERM
DEVELOP BRAZIL’S “WHITE SPACES”
FOCUSING ON THE POCKETS OF
OPPORTUNITY IN ORDER TO SUSTAIN FUTURE MARKET
LEADERSHIP
LONG TERM
DELIVER QUALITY BRANDS, PUTTING
TOGETHER AS MANY GROWTH DRIVERS AS
POSSIBLE
MID TERM