The five biggest trends in FMCG in the next five years
05 November 2014
A new report by Canadean analyses future trend scenarios for the FMCG sector, identifying the best opportunities in consumer markets over the next five years. Ronan Stafford, analyst at Canadean, explains why emerging economies will play such a huge role in the years to come.
The value of emerging economies
According to Canadean, the next wave of emerging economies will have one of the deepest impacts on global consumer markets in the next five years. The impact of changes in consumer behaviour and industry practices in countries such as Mexico, Thailand and Egypt, and innovations from these countries that are transferred back to developed economies, will be worth up to US$1.66 billion worldwide in 2018. Ronan Stafford, analyst at Canadean, says: “Companies have already seen the value in setting up innovation centres in emerging economies to help tailor their products to consumer needs. However, innovations from emerging economies are now also transmitted back to developed countries.”
Frontier for new packaging and flavours
Canadean finds that brands see the new markets in Latin America, Asia and Africa as a frontier for packaging innovation and exciting new flavours. “We increasingly see pack formats developed to keep costs low in emerging economies used to target austerity-minded consumers in Europe. Meanwhile, consumers are now highly aware of global culinary trends and want more experiential flavours. This means that Far Eastern and African flavours and ingredients are high in demand,” Stafford says. "The more big brands invest in targeting consumers in Lagos, Jakarta and Hanoi, the better they will meet the value and experience-seeking needs of consumers in New York, London, Madrid and Sydney," he adds.
Low income, 45+ women are early adopters
According to Canadean, women aged 45 and over from low and middle income households in urban areas will be early adopters of innovation arising from companies investing in the next wave of emerging economies. Stafford says: “The low incomes of many early adopters in the next emerging economies means that manufacturers need to simplify formulations. This includes strategies such as using fewer ingredients to lower costs or investing in lightweight packaging that is still robust enough to withstand poor quality supply chains.”
Companies need to target the next emerging economies now
In addition to measuring the value of targeting early adopters in 2018, the Canadean report evaluates the likelihood and impact on business practices of each scenario. When all three dimensions are analysed, one scenario rises head and shoulders above the rest: The deep impact the next wave of emerging economies will have on consumer markets. Stafford adds: “These opportunities in the next emerging economies need to be targeted now, or companies will lag behind their competitors on not just opening up new markets, but in better meeting the needs of their current customers.”
All numbers used in this text are based on Canadean's report 'Early Signals: Future scenarios that will drive consumption and product innovation over the next five years.'
In order to identify the best opportunities in consumer markets over the next five years, Canadean analysed 14 different scenarios across three dimensions: The value of successfully targeting early adopters in each scenario, the likelihood of it occurring, and the impact it would have on business practices. Canadean studied the consumption habits of over 30 different consumer groups in order to identify the early adopters of innovative products arising from the evolution of each scenario.
For more information
Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 207 936 6536 or email firstname.lastname@example.org.