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July 23, 2014

China Overtakes the US as the World's Largest Economy

China is set to overtake the US as the world's largest economy in 2014, with a significant impact on consumers and industries. Learn which industries will be the most affected and why by watching this video and downloading Euromonitor's latest whitepaper.

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July 21, 2014

Shopper Insights in Action Conference 2014 – IIR – Event Recap

Howard TelfordAnalyst Insight by Howard Telford - Beverages Analyst

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This past Wednesday, the 14th annual Shopper Insights in Action conference concluded in Chicago, Illinois. As always, the event focused on strategies to improve shopper activation across all kinds of consumer retail categories and channels, providing the shopper side of consumer marketing (and its research suppliers) an engaging forum to share ideas and success stories.

From a beverages and food service perspective, the three-day event at Navy Pier left me considering the need to address three, macro-level organizational challenges in the drinks industry:

1.       Using ‘big data’ more effectively

As the event’s exhibit hall demonstrated, there are a myriad of methodologically different ways to collect, measure and interpret the in-store responses of consumers to your products and shelves. As an industry that frequently delivers and merchandises its products through a two-tier bottling system (or other independent direct delivery partners), measuring the effectiveness of in-store activity - displays and product location - is vital. How can marketing and channel management teams demonstrate that ‘soft’ information on shopper response, preference or opinion is robust and indicative of volume growth or incremental revenue? Brands and their retail partners must work harder to interpret and contextualise data and insights in order to effectively advocate for change within their businesses.

Research focused and data literate leadership certainly helps. Keynote speaker Sir Terry Leahy, former CEO of Tesco plc, spoke about the need to improve the dissemination and understanding of data within large retailers and other organizations. As research tools become more powerful and useful – from generating understanding of potentially new, developing markets, to specific, localised consumer segments and their behaviours – it remains important that these insights are clear and actionable while reaching the right pairs of eyes.   

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July 14, 2014

Sweets & Soda: Can Carbonates Learn a Lesson from US Confectionery?

Howard TelfordAnalyst Insight by Howard Telford - Beverages Analyst

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Carbonated soft drinks and confectionery are two areas of the US consumer basket that contain high amounts of processed sugar and have duly attracted negative attention from public health advocates. Despite vulnerability to growing wellness concerns, the two categories have experienced divergent recent fortunes and future prospects, as a greater number of consumers adjust their food and beverage purchasing habits towards less frequent, more premium indulgences. Through the early incorporation of smaller packages and more premium products, the confectionery category has outperformed carbonates in terms of value growth. 

Value Sales: Confectionery potentially on par with Carbonates by 2018?

Source: Euromonitor International

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The Five Key Reasons Why the Reynolds/Lorillard Deal Is Taking Shape

Shane_MacGuillAnalyst Insight by Shane MacGuill - Tobacco Analyst

On Friday 11th July, the US’s second-largest tobacco company, Reynolds American (RAI) confirmed that it was in advanced negotiations with Lorillard (LO), the third-largest, for its acquisition. Any deal, facilitated by the increased stability in litigation facing US tobacco companies, is expected to be worth in the region of US$60 billion and is also likely to involve Imperial Tobacco Plc purchasing a congeries of tail brands from RAI (or perhaps even both companies) to help satisfy any anti-competition concerns on the part of the Federal Trade Commission who will have to approve the merger.

While there are inevitable question marks surrounding the deal (amongst which, the precise extent of economies realisable from the merger, the value for Imperial in its part of the bargain and the weighting being put on Lorillard's e-cigarette brand, blu) it is, in general terms, one which is likely to be beneficial to all parties, as a result of the following:

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July 9, 2014

Tapping into Demand for Gourmet Burger Cheese

Lianne van den BosAnalyst Insight by Lianne van den Bos - Food Analyst

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The US consumer’s love of the hamburger runs rather deep, with annual spending in fast food burger establishments reaching almost US$100 billion. To put this in context, that figure exceeds overall consumer foodservice spending in all but five countries. With premium cheese on the rise, Arla has launched blue cheese slices designed specifically for use with burgers in an effort to take a bite out of the enormous burger market in the US. Launched under its Castello brand, the product is already on the shelves of major retailers in the US and could be set to become a major phenomenon in markets with a similar penchant for gourmet burgers.

The Best Thing since Sliced Bread

A burger with blue cheese is a classic combination, and one that sells particularly well in the foodservice channel. However, there is one problem with blue cheese at retail level - it is difficult to cut. Providing pre-cut slices to complement burgers is a simple but very effective innovation. With convenience being one of the key selling points, it goes without saying that the simplest new product launches can sometimes be the biggest success stories.

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July 7, 2014

Hormel Acquiring Muscle Milk Highlights Importance of Protein Trend

 

Hormel’s acquisition of Muscle Milk manufacturer Cytosport is another in a series of ambitious moves by the company in recent years and highlights the importance of sports nutrition as a category of consumer health. The ready to drink protein segment will grow twice as fast as the overall sports nutrition category and massive opportunities exist outside of the US where this category is untapped. This could be the first of many acquisitions in sports nutrition as protein continues to be hot trend in packaged food and drink. 

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July 5, 2014

To Gain in the USA, Premium Carmakers Invest in Mexico

Neil-KingAnalyst Insight by Neil King - Automotive Analyst

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According to a Reuters news report on June 27, “Daimler AG and Nissan Motor Co are jointly investing $1.36 billion to develop premium small cars and build a factory in Mexico, the companies said on Friday, in a step that deepens cooperation between the Mercedes-Benz and Infiniti brands.” This was swiftly followed by a report on July 1, which stated that “Munich-based BMW said on Monday it would make an announcement in Mexico on July 3, all but confirming a widely expected decision to build a new factory to meet growing demand for premium cars, shortly after its rival Daimler announced similar plans.” Back in early 2012, before talk of the MINT economies, I identified Mexico as one of the MITE hotspots of future autos demand - along with Indonesia, Turkey and Egypt - and so these investment decisions hardly come as a surprise.

 

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June 30, 2014

The US Relaxes Restrictions on Crude Oil Exports

Giedrius RudisAnalyst Insight by Giedrius Rudis - Industrial Analyst

This week, the Wall Street Journal reported that the US Commerce Department has issued separate private rulings allowing two Texan companies, Pioneer Natural Resources Co and Enterprise Products Partners LP, to export a type of ultra-light oil known as condensate. Although exports of condensate will not offset the overall increase in US crude oil output, the move gives the industry hope of a further easing of the crude oil export ban.

Under current regulations, companies can only export US refined fuel like gasoline or diesel, but not crude oil. The embargo only excludes Canada. There are also certain exceptions that require a special licence to export crude oil to other countries, but as of 2013 almost all the crude oil exported from the US was destined for Canada. However, under the recent private rulings, condensate can also qualify as a refined product. Therefore, some ultra-light oil could be reclassified as fuel after it has been minimally processed, thus easing the export ban.

The willingness to relax the restrictions was likely prompted by the recent expansion of crude oil production in the US. As of March 2014, crude oil production in the country stood at 8.2 million barrels per day, up from 5.6 million barrels a day three years ago. Most of this expansion can be attributed to soaring light crude oil production. According to US Energy Information Administration estimates, this growth momentum is projected to be maintained in the coming years.

Soaring Light Crude Oil Production

Lightoil

Source: Euromonitor International from the US Energy Information Administration

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June 29, 2014

Confectionery Trends and Innovations at the 2014 Convenience U CARWACS Show in Toronto

Frank JiangAnalyst Insight by Frank Jiang - Contributing Analyst

One of the most attended industry trade shows for convenience store and forecourt retailer operators in Canada, the Convenience U CARWACS Show concluded on 19 March 2014 in Toronto after a busy couple of days.

The convenience store channel continues to play an important role in a number of product areas in Canada, including beverages, tobacco and packaged food. Within the latter, confectionery is one of the key categories, driven by impulse purchases, and its performance in convenience retail is drawing considerable attention from manufacturers, distributors and marketers of sweets and chocolate.

Euromonitor International participated in the event and exchanged views with industry players, with a particular focus on confectionery products.

Sharing Occasions and a Return to Large-Sized Chocolate Bars

A noticeable trend observed by a number of industry participants in Canada is the increasing sharing of sweets and chocolate with family and friends as well as to connect with other people. Subsequently, manufacturers of confectionery are seeking to tap into this trend and encourage purchase by increasing the size of individual bags/pouches of selflines/softlines.

Furthermore, in categories like tablets and countlines, smaller pack sizes and portion-control products have failed to excite many consumers in Canada, including the female consumers the products sought to target. This is leading to changes in product development and marketing activities, with a return to regular and large-sized chocolate bars to support sales.

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June 28, 2014

How to Corner a Mature Category: Rumchata Taking Over the US

Spiros_MalandrakisAnalyst Insight by Spiros Malandrakis - Senior Alcoholic Drinks Analyst

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Is maturity induced decline irreversible? How can a seemingly clinically flatlining category exit the state of complacency suffered in the grip of the leading brand’s absolute dominance? Can a small regional player challenge an industry behemoth and not merely survive to share the tale but actually shift the balance of power in its favour?

This is not another story about craft beer’s ascent. It is the remarkable story of a small regional cream based liqueur brand that tinkered creatively with a recipe steeped in millennia of heritage to witness roaring success where Diageo struggled or even failed spectacularly. There were no major promotional campaigns, no Super Bowl commercials and no celebrity endorsements. And yet Rumchata succeeded in securing a fifth of the entire US market within 3 short years. Here is why it happened.

Continue reading "How to Corner a Mature Category: Rumchata Taking Over the US" »

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Recent Posts

China Overtakes the US as the World's Largest Economy

Shopper Insights in Action Conference 2014 – IIR – Event Recap

Sweets & Soda: Can Carbonates Learn a Lesson from US Confectionery?

The Five Key Reasons Why the Reynolds/Lorillard Deal Is Taking Shape

Tapping into Demand for Gourmet Burger Cheese

Hormel Acquiring Muscle Milk Highlights Importance of Protein Trend

To Gain in the USA, Premium Carmakers Invest in Mexico

The US Relaxes Restrictions on Crude Oil Exports

Confectionery Trends and Innovations at the 2014 Convenience U CARWACS Show in Toronto

How to Corner a Mature Category: Rumchata Taking Over the US