Targeting Profitable Consumer Trends In Brazil, Russia, India and China

TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 3
The hot topic 3
The future decoded 3
Action points 5
CHAPTER 2 THE FUTURE DECODED 17
Context - understanding the BRIC region 17
The emergence of the ‘BRIC’ moniker 17
PESTLE analysis of the BRIC region 18
Socio-demographic overview 20
TREND: There is a burgeoning middle class emerging in the BRIC markets 24
The potential for middle class expansion varies by BRIC market 24
Brazil’s open and relatively stable democracy bodes well for the future development of the middle class 24
The once precarious state of the middle class in Russia is now stabilizing 30
Of all BRIC markets, India’s knowledge economy has the most stable middle class potential 34
China’s middle class is strongest in urban areas 37
TREND: There is an aging of BRIC populations 41
The rapid evolution of middle classes, combined with a demographic shift in favor of seniors, will enable BRIC countries to emulate Western markets 41
BRIC countries have broadly enjoyed young population bases in the past 42
Overall there is an aging of the BRIC region but there is some important variance 43
Brazil is experiencing a rapidly aging population 46
Russia - declining life expectancy and birth rates create a worrying population decline 48
India - the aging population is a concern for the longer term rather than the medium term 51
China - rapid aging of the population is having a fundamental impact 53
An aging population brings with it new needs 54
INSIGHT: Dietary patterns in the BRIC countries are highly diverse 57
Meat and fish consumption varies between BRIC countries 57
Fruit and vegetable consumption and preferences vary widely 58
Bottled water consumption is rising rapidly in India and China with slower growth in Russia and Brazil 63
INSIGHT: Health is a growing concern, particularly as ‘Western’ diseases proliferate in this region 68
Obesity and hypertension are increasingly prevalent in the BRIC countries 68
Sales of nutraceuticals and dietary supplements are growing across the BRIC region 71
INSIGHT: Convenience is of growing importance to select consumers on select occasions 73
BRIC consumers are beginning to embrace convenience focused meal solutions 73
Consumer attitudes towards frozen foods are developing as such foods become more widely available 77
A large proportion of BRIC consumers function without washing machines and dryers 81
Outsourcing laundry to domestic helpers remains prevalent in all BRIC countries 84
Approaches to washing and use of detergents varies between countries 85
Clothing odor and hygiene is a problematic issue for BRIC consumers 88
Dishwashers are seen as aspirational and are rarely used by BRIC consumers 92
INSIGHT: Sensory and pleasure focused consumption is increasingly prominent 94
Consumption of pleasure orientated food and drink is growing as more consumers are able to trade up 94
Food and drink flavor preferences vary slightly by country 95
Consumer packaged goods marketing claims highlight shifting preferences among BRIC consumers 98
Takeaway food occasions are becoming popular in BRIC countries 101
Local foods are the most heavily consumed while other ethnic dishes are gaining in popularity 104
INSIGHT: Consumption of food, drinks and personal care reveal significant age and gender differences 106
Personal care consumption by age and gender 107
Alcoholic drinks consumption by age and gender 109
Soft drink consumption by age and gender 111
Confectionery and savory snacks consumption by age and gender 113
Prepared meals consumption by age and gender 115
Conclusions 118
CHAPTER 3 ACTION POINTS 119
Introduction 119
ACTION: Prepare for the future with higher premium products as the middle classes broaden and deepen 120
Link aspirational brands with aspects of popular culture and fashion 120
ACTION: Take existing mature brands into new BRIC markets to develop as “cash cows” in select cases 122
ACTION: Take steps to protect intellectual property 122
Work with regulating authorities and joint venture partners to ensure the integrity of their brands 123
ACTION: Target aging populations via product development and marketing communications 123
Target the older consumer group - their strategic importance will only grow 123
Make older consumers more inclusive with “ageless marketing” 123
Respond to the veneration of seniors in certain societies 124
Companies that adapt the quickest will thrive 125
ACTION: Target the health and wellness trend 126
Look to re-formulate existing products and market them as better-for-you alternatives 126
Introduce consumer education programs about healthy eating and to build long-term brand trust 128
ACTION: Target the need for time-saving devices and services 129
Incorporate convenience orientated product attributes into your offerings 129
Promote convenient products as a way of allowing consumers to enjoy more family time 131
APPENDIX 133
Definitions 133
Research methodology 134
How to contact experts in your industry 134
LIST OF TABLES
Table 1: Population growth in the BRIC region (millions), 2000-2010 21
Table 2: Population by family status in the BRIC region (% of total population), 2000-2010 22
Table 3: Population by ethnic background in the BRIC region (% of total population), 2000-2010 23
Table 4: GDP per capita (US$), 2000-2010, Brazil and the US 25
Table 5: Gini co-efficient, 2000-2010, Brazil 26
Table 6: Income quintile distribution (US$), 2005, Brazil 27
Table 7: Home occupancy ownership (%) and average home price (US$), 2000-2010, Brazil and the US 28
Table 8: Gini co-efficient, 2000-2010, Russia 30
Table 9: Income quintile distribution (US$), 2005, Russia 31
Table 10: GDP per capita (US$ 1995), 2000-2010, Russia and the US 32
Table 11: Home occupancy ownership (%) and average home price (US$), 2000-2010, Russia and the US 33
Table 12: Gini co-efficient, 2000-2010, India 35
Table 13: Income quintile distribution (US$), 2005, India 35
Table 14: GDP per capita (US$), 2000-2010, India and the US 36
Table 15: Home occupancy ownership (%) and average home price (US$), 2000-2010, India and the US 36
Table 16: Gini co-efficient, 2000-2010, China 37
Table 17: Income quintile distribution (US$), 2005, China 38
Table 18: GDP per capita (US$), 2000-2010, China and the US 39
Table 19: Home occupancy ownership (%) and average home price (US$), 2000-2010, China and the US 39
Table 20: Brazil population forecast (millions) by age band, 2006-2010 47
Table 21: Brazil population by age and gender (%), 2006 and 2010 48
Table 22: Brazil life expectancy by gender, 2001-2010 48
Table 23: Russia population forecast (millions) by age band, 2006-2010 50
Table 24: Russia population by age and gender (%), 2006 and 2010 50
Table 25: Russia life expectancy by gender, 2001-2010 50
Table 26: India population forecast (millions) by age band, 2006-2010 52
Table 27: India population by age and gender (%), 2006 and 2010 52
Table 28: India life expectancy by gender, 2001-2010 52
Table 29: China population forecast (millions) by age band, 2006-2010 53
Table 30: China population by age and gender (%), 2006 and 2010 54
Table 31: China life expectancy by gender, 2001-2010 54
Table 32: Meat and fish consumption per capita in the BRIC region (kilograms), 2000-2010 58
Table 33: Fruit and vegetable consumption per capita in the BRIC region (kilograms), 2000-2010 59
Table 34: Most popular five vegetables and fruits by consumption, Brazil 2005 60
Table 35: Most popular five vegetables and fruits by consumption, Russia 2004 61
Table 36: Most popular five vegetables and fruits by consumption, India, 2005 62
Table 37: Sales of bottled water in Brazil by type (Liters, millions), 2000-2010 64
Table 38: Bottled water consumption in Russia (Liters), 2000-2010 65
Table 39: Sales of bottled water in Russia by type (Liters, millions), 2000-2010 65
Table 40: Sales of bottled water in India by type (Liters, millions), 2000-2010 66
Table 41: Sales of bottled water in China by type (US$m), 2000-2010 67
Table 42: BRIC countries, incidence of obesity (millions), 2000-2010 69
Table 43: BRIC countries, incidence of hypertension (millions), 2000-2010 71
Table 44: Nutraceutical and OTC vitamin & mineral sales in the BRIC region (US$ millions), 2000-2010 72
Table 45: Nutraceutical and OTC vitamin & mineral expenditure per capita in the BRIC region (US$/head), 2000-2010 72
Table 46: Ready meal sales per annum, Brazil, 2000-2010 74
Table 47: Ready meal sales per annum, Russia, 2000-2010 75
Table 48: Ready meal sales per annum, India, 2000-2010 76
Table 49: Ready market value by type (US$ m), China, 2000-2010 77
Table 50: Frozen food sales per annum, Brazil, 2000-2010 78
Table 51: Frozen food sales per annum, Russia, 2000-2010 79
Table 52: Frozen food sales per annum, India, 2000-2010 80
Table 53: Frozen food sales per annum, China, 2000-2010 81
Table 54: Clothing detergent sales by type in Brazil (US$m), 2000-2010 86
Table 55: Clothing detergent sales by type in Russia (US$m), 2000-2010 86
Table 56: Product features of clothing detergents launched in India, Jan 2001- Aug 2006 87
Table 57: Consumption of pleasure orientated food and drinks by volume in the BRIC region, liters million, 2000-2009 94
Table 58: Brazil: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06 95
Table 59: Russia: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06 96
Table 60: India: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06 97
Table 61: China: Top 15 flavors in new food and drinks launches (% of total launches), Dec 05-06 98
Table 62: Brazil: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06 99
Table 63: Russia: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06 100
Table 64: India: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06 100
Table 65: China: Top ten on-pack marketing claims in new food and drinks launches (% of total launches), Dec 05-06 101
Table 66: Takeaways in Brazil, 2004-2009 102
Table 67: Takeaways in China, 2005-2010 103
Table 68: Definitions of terms used in the report 133


LIST OF FIGURES
Figure 1: PESTLE analysis of Brazil 18
Figure 2: PESTLE analysis of Russia 19
Figure 3: PESTLE analysis of India 19
Figure 4: PESTLE analysis of China 20
Figure 5: Brazil’s economy is based on services and commodity resources 29
Figure 6: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, 1990 43
Figure 7: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, 2006 45
Figure 8: Over 50s as a proportion of total population (%), BRIC countries and Western Europe, forecast 2010 46
Figure 9: Still water dominates China’s emerging bottled water market, 2000-2010 67
Figure 10: Clothing detergents in Brazil highlight the fact that they are designed for use in washing machines 83
Figure 11: China’s laundry detergent market is fragmenting into specialist products 90
Figure 12: BRIC countries: value of personal care consumption by age group (% value), 2004 108
Figure 13: BRIC countries: value of personal care consumption by gender (% value), 2004 109
Figure 14: BRIC countries: value of alcoholic drinks consumption by age group (% value), 2005 110
Figure 15: BRIC countries: value of alcoholic drinks consumption by gender (% value), 2005 111
Figure 16: BRIC countries: value of soft drinks consumption by age group (% value), 2004 112
Figure 17: BRIC countries: value of soft drinks consumption by gender (% value), 2004 113
Figure 18: BRIC countries: value of Impulse consumption by age group (% value), 2004 114
Figure 19: BRIC countries: value of Impulse consumption by gender (% value), 2004 115
Figure 20: BRIC countries: value of prepared meal consumption by age group (% value), 2004 116
Figure 21: BRIC countries: value of prepared meal consumption by gender (% value), 2004 117
Figure 22: The affluence and needs of the middle class inevitably evolves 121
Figure 23: Unilever's healthy ice cream, Kibon Ades, has been launched in Brazil 126
Figure 24: Nestle's Maggi Na Zdorovye! Salad Seasoning was recently introduced in Russia 127
Figure 25: Nestle Rice with Lotus Seed is a new type of nutritious baby food in China 128
Figure 26: Instill these product attributes in offerings to capitalize on consumers’ convenience related needs and behaviors 131