Flavours and Textures: How Local Consumer Taste Palates Are Defining Global Soft Drinks

Analyst Insight by Jonas Feliciano, Beverage Analyst at Euromonitor International

As global soft drinks companies compete with local manufacturers for share in developing nations, textures and flavours that cater to domestic consumer tastes take centre stage.

For generations, “a Coke and a smile” (and an unparalleled international distribution arm featuring local bottlers, licensed manufacturers, and a deep retail presence) was enough to capture significant market share in developing nations. The idea was simple. Much like blue jeans and rock and roll, Western beverages represented a lifestyle for which consumers in these markets would pay a premium. As of 2012, however, things have changed—growing consumer sophistication has put the focus squarely on developing products specifically tailored to consumer taste, to develop products with flavours and textures that local consumers find both familiar and satisfying. And, more often than not, these preferences are outside of the carbonate category.

Prada's Growth Model Shows the Way Forward

Analyst Insight by Rob Walker, Senior FMCG Analyst at Euromonitor International

Almost one year on from Prada's Hong Kong IPO debut, the ensuing volatility of its share price and, ultimately, the company's surging profitability, what are the lessons for luxury goods companies with an eye on a stock market listing?

A bumpy ride for Prada's yield hungry investors

Prada, the Italian luxury fashion house famous for making trendsetting handbags and footwear, raised US$2.14 billion from a Hong Kong IPO in June last year. That was around a fifth less capital than the company had planned for. As things transpired, retail investors were put off by the prospect of Italian capital gains and dividend taxes, which they were liable to pay (even though the listing was in Hong Kong).

Hard Value, Secondary Brands and BRICs Identified as Key Luxury Goods Themes in 2012

Analyst Insight by Rob Walker, Senior FMCG Analyst at Euromonitor International

The luxury goods industry has shown a high degree of insulation from global economic volatility over the past five years, but what is the prognosis for 2012, and what are the main trends, opportunities and company strategies to look out for? Euromonitor International makes some New Year predictions for five key categories.

Designer clothing and footwear: Growth of diffusion brands

In 2012, designer labels will be up against a new set of challenges due to a new era of austerity in the developed markets. We will see stronger investment in secondary (or diffusion) luxury collections as a means to drive demand in lacklustre consumption bases, specifically Western Europe, North America and Japan.

Priced to Sell - Intel powered Smartphone

Analyst Insight by Wee Teck, Loo

Intel Corp announced the launch of the first smartphone running on its Atom processor, the XOLO X900. The device, developed by Lava International Limited (Lava) in India, will be running on the Android OS, which is expected to garner 62% of the Indian smartphone market in 2012.

The XOLO X900 is priced at an attractive Rs 22,000 (US$448), which is similar to the Motorola Atrix 2 and Samsung Galaxy S2, both of which have been in the market for a longer time. In terms of specifications, the X900 is on par with its competitors, which definitely bodes well for Intel and Lava’s maiden effort in the smartphone market.

Porsche Powered by the Outlook for Households With an Annual Disposable Income in Excess of US$250,000

Analyst Insight by Neil King, Analyst - Automotive

Porsche produced just 95,000 cars in 2010, a lower number than rolled off its lines in 2008 and more than 20,000 units shy of the record 107,000 units produced in 2007.  However, output increased by over 25% in 2011, smashing the 2007 record, buoyed by phenomenal demand growth in China. Tweet this! Combined with a recovery in the US, where Porsche's sales were 15% higher than in 2010, the company is understandably upbeat.

Considering the development of Porsche's output level back to 2000, it essentially tracks Euromonitor International's data on the global number of households with an annual disposable income of over US$250,000 through 2008. Tweet this! From 2000 to 2002, Porsche's output equated to 0.4% of homes with an ADI in excess of US$250,000, but as a direct result of the introduction of the Cayenne SUV there was a notable jump in this ratio in 2003, whereby Porsche's production equated to 0.6-0.7% of the quarter of a million of these households over 2003-2008. However, through the global recession, output declined much more than the number of households with an ADI of over US$250,000 would have suggested as the number stabilised in 2009 and had already recovered to a record level of nearly 17 million homes in 2010.

Asia Pacific Markets Drive Pernod Ricard’s Growth

With net sales up by 11%, Pernod Ricard has unsurprisingly outperformed its major rival Diageo (7% growth) with its fiscal 2012 half-year results (July-December 2011). The company also achieved stronger volume growth. Although not reporting an overall volume growth figure, volume growth was in the high single digits, with the company's 14 strategic brands and 18 local brands, which accounted for 77% of net sales, both registering a 9% volume gain.

Packaging Profile: Coca-Cola

In the second of a series of reports looking at the packaging strategies of leading fmcg brands, Euromonitor International considers Coca-Cola, the world’s biggest selling carbonates brand. Coca-Cola’s packaging holds instant global recognition through its signature red colour, scripted lettering and contour shaped bottle that give it iconic global design status. Challenges to growth on health and affordability platforms require the brand to make the packaging appropriate to consumer needs.

Discover More>> Download a sample of Packaging Profile Coca-Cola

Diversification Can Take Different Forms

For most ingredients companies, diversification into speciality ingredients is becoming more important. Revenue derived from commodity-style ingredients can be unstable as prices and demand fluctuate from year to year, and even month to month. Carving a niche and becoming an expert in one or two areas can provide ingredients companies with more reliable and profitable sales.

Soft Drinks: The Future of the Top Ten Companies

Analyst Insight by Richard Haffner 

When looking at the largest soft drinks companies globally, the list looks a little different when comparing sales in value and volume terms. Besides the obvious top two global companies, Coca-Cola and PepsiCo, all of the remaining top 10 players in terms of value sales come from developed markets, with the exception of Tingyi Holdings Corp. Tingyi, which does business almost exclusively in China, ranked eighth in 2011 with a global off-trade value share of 1.9%.

Source: Euromonitor International 

Top Ten Foodservice Chains to Watch

Analyst Insight by Michael Schaefer

While US-based chains remain dominant in many markets, competition from local players has grown exponentially over the last five years, with local players across the globe growing in both sales and ambition.

In this article, Euromonitor International examines ten key growth chains to watch, with several well on their way to taking their place as major global players over the next ten years. While booming markets like China, Brazil, and India are well-represented on the list, real innovation is underway on every continent, from Latin America to Western Europe, as local stalwarts combine lessons learned from leading global chains with real advances of their own.