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May 13, 2015

Hispanic Population Growth Not the Sole Driver of Mexican Beer Imports in the US

Eric PenickaAnalyst Insight by Eric Penicka - Research Associate

Euromonitor International data show premium imported lager in the US experienced volume growth of 4% in 2013, reaching 3.3 billion litres sold, and a five year CAGR of 1%. This comes in contrast to beer’s struggling performance overall, which declined by 2% in 2013, and with a 2008-2013 CAGR of -1%.  Companies with beer portfolios primarily composed of imported lager, as is the case with Constellation Brands, have reaped the benefits of the category’s exceptional performance. In its 2014 annual report, Constellation Brands attributed its astonishing 74% growth in net sales to its beer portfolio, which is almost entirely comprised of Mexican imports. In fact, driving the growth of the entire imported premium lager category are beers coming from south of the US border.

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A Brighter Future for RadioShack in Mexico

Amanda BoulierAnalyst Insight by Amanda Boulier - Research Analyst

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On March 27, Grupo Gigante announced it would be purchasing the approximately 250 outlets of RadioShack México for a total of US$32 million dollars from RadioShack Corp. the owner of the electronics specialist chain in the United States and elsewhere.  Grupo Gigante previously had partial ownership of the retailer in Mexico but sold its stake in the joint venture in 2008 in the context of a challenging macroeconomic outlook.

RadioShack’s struggles, ultimately leading to bankruptcy and the closing of thousands of outlets in the US, are well-known.  In recent years the retailer found itself with an overburdened geographic footprint and an underdeveloped internet retailing presence.  RadioShack México, however, operates a smaller network of stores in a retailing environment in which internet sales are still nascent.  This gives the chain a chance to learn from its US mistakes and develop a proactive strategy of e-commerce investment and controlled outlet expansion before the market dynamics in Mexico evolve, in contrast to the reactionary position the brand adopted in the US.

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May 11, 2015

The Global Terrain of Private Label

Agne ReklaiteAnalyst Insight by Agne Reklaite - Data Scientist

Private label has transformed the landscape of many FMCG industries. In the visual below, we have mapped the US$400 billion worth of private label sales across eight FMCG industries where private label is most prevalent. The mountain size shows the potential prize for retailers by targeting private label in each industry.

Private Label Sales Across Eight FMCG Industries

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Note: In the chart, each bar represents a category. Its width represents global market size for that category, or sales of all brands within the category, whereas height represents private label share of these sales. The area of the figures represents private label sales (product of category market size and private label market share). Additionally, the figures in brackets above the chart indicate total private label sales in every industry. All figures are in US dollars and refer to retail value sales. 

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Impactful Power of Internet over Personal Care Appliances

Thidathip TawichaiAnalyst Insight by Thidathip Tawichi - Consumer Appliances Analyst

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Due to increases in internet access and the growth rate of smartphones and tablets sales volumes, internet user numbers have greatly increased around the globe. In personal care appliances, the internet has become a significant selling channel for manufacturers as well as a marketing channel where products have been widely advertised and promoted. Owners of global personal care appliance brands such as Panasonic, Braun and Philips increasingly advertise their products via social media such as Facebook, Instagram and YouTube to introduce new products, launch beauty tutorials or share promotional campaigns and marketing activities. Since smartphones and tablets are expected to post higher volumes over the next five years, social media will therefore be continuously utilised as an impactful marketing platform by personal care appliance manufacturers.

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May 10, 2015

The ‘Thrill of Thrift’: From Circular Economics to Online Bargain Hunting in the Americas

Daphne KasrielAnalyst Insight by Daphne Kasriel-Alexander - Consumer Trends Consultant

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Buying used, recycled or re-manufactured items has no longer to do with saving up. For millions of consumers throughout the Americas, it is all about taking part in the new so-called circular economy, which implies the re-entry of previously used items in the production/sales cycle. Consumers are not alone in their ‘thrill of thrift’ – firms have joined them, forging alliances with their customers and adding value to used items. Meanwhile, the internet offers an unprecedented window of opportunity for bargain hunters, who shop with near-impossible discounts.

Key trends

  • The new clothing cycle;
  • Virtual communities;
  • The new outlet shops. 

Continue reading "The ‘Thrill of Thrift’: From Circular Economics to Online Bargain Hunting in the Americas" »

May 8, 2015

The UK Election: Now the Real Work Begins

Sarah-B-Banner

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Notwithstanding David Cameron’s return to Downing Street, the impact of the UK economy’s return to growth remains to be felt by large swathes of consumers. Much of the growth has been driven by an increase in population, and as a result the figures look less positive when looked at in per capita terms. In particular, low productivity growth has meant that the reduction in unemployment has failed to lead to increases in per capita disposable income.

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Continue reading "The UK Election: Now the Real Work Begins" »

Import Restrictions and Tissue and Hygiene Retail in Argentina

Horacio LarghiAnalyst Insight by Horacio Larghi - Contributing Analyst

In January 2015, Argentinean news outlets had much to say about the shortage of tampons in the South American country. The feminine hygiene product is not produced locally and the two principle manufacturers, Johnson & Johnson and Kimberly-Clark, which dominate the Argentinean market with nearly 90% of all sales, import their brands from Brazil, as well as from far-away Czech Republic. The government-imposed import barriers are the reason for the tampon shortage.

 

Reasons behind restrictions and daunting task of getting dollars into the country

Argentina’s external debt is denominated in US dollars, which stands at US$140 billion. The country’s reserves currently stand at less than US$30 billion, which is less than the cost of six months of imports. In October 2015, a bond payment of approximately US$4 billion will be due.

The situation, however, is exceptionally complicated. An interest payment made on 31 March 2015 will most likely not reach most bondholders, as US District Court Judge Thomas Griesa has barred the country from paying any interest on bonds restructured after the 2002 default, until it settles with US hedge funds that rejected a bond swap. This disagreement is at the root of the country’s latest default in July 2014. Therefore, it is essential that more dollars enter the country than exit, which explains the import restrictions.

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May 7, 2015

Sanctions and their Toll – How has Iran Fared?

Bassam-AounAnalyst Insight by Bassam Aoun - Consulting Analyst

Across the globe, the news has spread - there could soon be a new market in town.

Since agreeing on a framework for the easing of sanctions, world powers have indicated that Iran could soon be open for business. The implications here are myriad - foreign direct investment could spike, competition could go from local to international and Iranian consumers could soon find themselves spoiled for choice at the nearby grocery store. Yet the question of how much damage the sanctions have actually caused still remains, as politicians and economists alike argue the extent to which Iran was affected. Regardless of the debate's semantics, the numbers paint a fairly clear picture of the sanctions' toll on the Iranian economy.

The effect on the consumer is readable and more pronounced by the day. Currency woes have stifled purchasing power, dampening growth prospects for several industries. Specifically, between 2009 and 2014, the Iranian Rial has increased in value versus the US Dollar by 162.5%. Furthermore, this ratio is set to further depreciate the currency by 86.7% between 2015 and 2019.

Iran-Sanctions

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Discounter Gains and Single-Serve Drive Private Label Coffee

Howard TelfordAnalyst Insight by Howard Telford - Senior Beverages Analyst

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According to Euromonitor International’s latest estimates, private label accounts for about 10% of total global coffee volume. Private label share of the coffee market understandably rose over 2005-2012, during the worst of the economic downturn, but slipped slightly over the last two years of relative recovery. Private label coffee is still primarily a developed market option, sustained in large part by value priced modern retailers. Store-brand coffee has a negligible presence in Asia and Latin America, but a significant impact in Western Europe, where private label coffee accounted for 26% of total market volume in 2014, up from 22% in 2005.

This regional variance highlights several important factors behind the success of private label coffee: a growing, modern, discount oriented retail environment and a consumer preference for fresh, rather than instant coffee. Increasingly, a preference for pod based, single-serve coffee at affordable price points could generate even more momentum in private label. The rise of premium supermarket chains, like Whole Foods in the US, is potentially another factor influencing the future of private label ‘brands’ that are winning consumer acceptance.

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May 6, 2015

Future Watch: Global Stories - The Changing Expat Experience

Daphne KasrielAnalyst Insight by Daphne Kasriel-Alexander - Consumer Trends Consultant

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The world is an increasingly mobile place, with people criss-crossing the globe and living abroad in ever-greater numbers. However, the expat experience is changing – migrants are an increasingly heterogeneous group with a wide variety of goals and expectations. 

Future directions

  • An increasingly complex picture;
  • Not always a bed of roses;
  • A food in both camps;
  • Making sacrifices to build a future back home. 

Continue reading "Future Watch: Global Stories - The Changing Expat Experience" »

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