Global Consumer Trends

The 10 mega-trends shaping the future of consumer packaged goods

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Agenda
Introduction The 10 mega-trends

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Introduction
Why global? Why consumers? Why trends?

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The determinants of consumer behavior

Latent Applied

Thoughts

Values

Attitudes

Actions

Occasions

Behaviors

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Rule #1

Trends last at least 10 years

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Distinguishing between trends and fads

Factor Trends
Substantive drivers e.g. Demographics Lifestyles Values Technology

Fads
Transitory factors e.g. Pop culture Celebrities Fashion Media

What is driving it?

How accessible is it?

Accessible to the mainstream

Limited to a target niche

How broad is it?

Crosses product category and industry boundaries as well as demographic groups

Limited to very specific product categories and rarely crosses demographic groups

How long it lasts

At least 10 years

A few seasons at most

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Age complexity
Kids growing up young Age-specific psychological states among children are contracting, thanks to media and marketing Youths aspire to be older: US Youths: Current age 12 13 14 15 16 17
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Aspired age 17 17 18 18 18 19

Sources: Developmental Differences in Children and the Challenge of Developmental Compression, Cohen and Cahill, International Journal of Advertising and Marketing to Children; Teenage Research Unlimited
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Age complexity
Kidults adults acting younger Contemporary adult attitudes and behaviors increasingly reflect a youthful disposition

While the age gap between generations has never been bigger as people have children later in life, the attitudinal gap has never been smaller IJMAC, October 2003 Seniors enjoying a 2nd youth

Wild elderly retirees who cant take their age seriously and want to have fun
Seniors see themselves as 12-15 years younger than they actually are
Sources: Advertising Age; MORI
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Age complexity
Products for kids growing up young
Solero Shots swigging action to mimic adults drinking Junior Horlicks adult brand repositioned for children

Adults acting younger

Macleans 40+ Sun Valley String Cheese with real olives LAngelica Anti-Age tea

Ageless marketing
Evian Makes you feel young at heart Weetabix Energy for Everyone Nescafe Energo - a universal fortified coffee drink for energizing mind and body
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Rule #2

For every trend there is a counter-trend

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Age complexity

Counter-trend: age as identity Some seniors are proud of their age They want to demonstrate their superior wisdom and abilities the fact that they have mastered the art of living

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Gender complexity
The feminization of society and men
Increasing economic wealth of women

Men taking a more active role in parenting

Metrosexuality among men
Men have now claimed the right to think and act for themselves. Trendsetters and celebrities have broken stereotypes giving men the freedom and confidence to revolutionize the image that they want to portray of themselves. (Brand manager, Parfums Jean Paul Gaultier, quoted in Cosmetics International, July 2003)
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Gender complexity
Counter trend: gender as identity Among men: Lads mags as a backlash to the feminization of society

Among women: Independence from men

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Gender complexity
Counter trend: gender as identity Products targeting gender as identity

Nestle Yorkie bar

LUNA bars

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Lifestage complexity
Demographic complexity is creating more fragmented family structures across Europe

(Millions of Europeans living as) Singles Couples Without Kids Nuclear Families Single Parent Empty Nesters Overall

1995

2000

CAGR 95-00

2005

CAGR 00-05

70.4 77.5 154.1 27.4 54.5 383.9

75.6 80.6 143.9 28.4 58.9 387.4

1.4% 0.8% -1.4% 0.7% 1.6% 0.2%

81.0 82.0 132.7 29.4 63.7 388.8

1.4% 0.3% -1.6% 0.7% 1.6% 0.1%

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Income complexity
High income groups spending on anti-luxury Downshifting and simplifying Getting a bargain Spending on needs and not wants

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Income complexity

Lower income groups spending on luxury on a budget Budget Living Sacrificial consumption

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Income complexity
Capitalizing on the increased desire for professionalism
Max Factor The makeup of makeup artists Orbit Professional chewing gum Praveks Herbal Slimming Tea developed by Ayurvedic doctors

Aspirational products for mid-income consumers

Wolfgang Puck Soups Frozen Dessert souffls from the Bistro Garden restaurant

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Convenience: values and attitudes

Fitting in many competing demands on time
Percentage of global respondents that consider the following to very important in their life
90% 80% 70% 60% 60% 50% 40% 30% 20% 10% 0% Family Work Friends Leisure Religion 40% 35% 27% 83%

Source: World Values Survey

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Convenience: behaviors
Multitasking
One-stop shopping Consuming on-the-go Top-up shopping Eating light Grazing

Last-minute planning
Outsourcing Seeking quick fixes Pit-stopping Creating a home from home Compact living

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Convenience: behaviors
Fragmenting eating occasions across Europe
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Change in eating occasions per head 10 per year 2002-2007 8 10.6

6
4 2 0 -2 -4 -6 -8 -10

5.4

5.5

-1.7 -3.2

-7.3
Breakfast Morning snacking Lunch Afternoon snacking Dinner Evening snacking
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Convenience: best practice

Easy-to-use
Sotocos Spoonty is a tea spoon to replace the tea bag Itoham Foods ready meal comes in a disposable metal pan that acts as the heating pan and the bowl

Space efficient
Coca Colas Fridge Pack Vendor Kirin Tarunama Ichiban Shibori

On-the-go innovation
Self-heating Hotcan ready meals Aldo's Pizza Bar pizza to heat in a cup Campbells Soup At Hand portable soup H2O No Gas water in a slim hip flask with belt clip
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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Health: values and attitudes

Greater value is being placed on healthiness and wellbeing

Health awareness and concern is growing

Ageing populations mean greater health concerns

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Health: behaviors
Exercising
Adopting regimes

Self-medicating
De-stressing

Dieting
Seeking nutrition

Acting holistically
Seeking total solutions

Information seeking

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Health: behaviors
Seeking nutrition
Natural and organic food and drink consumers in Europe (m)
350
300 250 200 150 100 50 0 42.6 2002 Occasional users Loyal users
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CAGR 7.8% 226.3 166.7 78.0 2007

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Health: best practice

Functional drinks and cosmeceuticals:
Pokka Amino Lemon drink helps the over 50s retain a youthful appearance Orchard Maid and Addera Probiotic Drink with a probiotic straw Kanebo Collagen Suplipet drink with collagen Inneov fermete skin firming tablets SP Marine Super P anti-hypertension drink Yakults Lemorea anti-hypertension drink Benecol cholesterol lowering dairy drink
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Health: best practice

Better for you food for kids:
Congelados Patitas drumstick shaped breaded vegetables McCain Smiles pre-cooked in a polyunsaturated oil and are cholesterol free

Natural health innovation

Frito-Lay Natural snacks Asahis Aqua Blue made with deep sea water

Total health solutions

Wisdoms YerbaMate Royale natural tea for losing weight, boosting energy and alertness Campbell's Ignite Frozen Entree no artificial flavors; 16 essential nutrients; 2 servings of veg; high in protein
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Rule #3

There are rich pickings when products satisfy two or more mega-trends
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Health: crossover trends

Health on-the-go
Putting healthy products into on-the-go formats
Norwegian Jake's BackPack Lunch in a canister Deli Dashers Salad Bowl Friesland Breaker yogurt in a resealable pouch

Jt Aka Oolong RTD tea enriched with vitamins in a resealable bottle can

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Sensory: behaviors
Seeking experiences
Going to extremes

Trading up
Experimenting

Seeking sensations
Exploring new cultures

Seeking authenticity
Not compromizing

Seeking professionalism

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Sensory: best practice

New taste sensations
Authentic: Steaz Green Tea Soda micro-brewed Authentic: Farm Route Food Pot Pie from named farms

Novel: Strathmore Still Spring Water in chocolate flavor

Ethnic: Lurpak with Mediterranean herbs

Flavor cues in packaging

Pom Wonderful juice in pomegranate shaped bottle

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Sensory: best practice

Extreme and intense
Percol Rocket Fuel tea with an explosive caffeine kick

Sprite on Fire with an unique burning ginger sensation

Magma Cinnamon Schnapps Liqueur with a hot peppery taste

Virgin Sours sour soda

Herman Goelitzs Harry Potter yuck flavor sweets

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Sensory: best practice

Interactive sensations
KP Skips with fizz sensation that turns tongue yellow Nestles Jambos lick jam to reveal picture

Sakito Juice Drink Thumb it, punch it, drink it

Experiential products
LOccitane holiday scents perfume Crest Whitening Expressions

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Rule #4

Fads when underpinned by a mega-trend are a good way to maintain interest

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Sensory: crossover trends

Sensory + Convenience = Fast casual dining Fresher, better than quick service restaurants but quicker, less formal service than full service

Driving growth in the foodservice industry

Sensory + Health = Mediterranean diet Has been promoted as a healthier alternative to traditional diets since the 1960s Considered to be tasty as well as healthy, driving it to a value of 117bn in Europe

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Individualism: behaviors

Getting rich quick

Being individual

Being exclusive

Multi-lifestyling

Living alone

Having it your way

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Individualism: best practice

Customization innovation

Jones Soda create your own labels

Coca-Colas Style-a-Coke shrink wrap system

Lavazza pod tea bags

FreshDirect offers a customized online shopping experience

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Homing: values and attitudes

The value placed on home and family Increasing importance of the home In the western world there is a growing desire for family life although family values have remained strong in Asia and Latin America Links between home, family and tradition

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Homing: behaviors
Cocooning Pampering Everyday treating Bringing third places home

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Homing: best practice

Products that offer at-home third place experiences

Kraft Parmesan restaurant-style shaker

Pizza Express restaurant pizzas in supermarkets

Nichirei Beef Stew based on recipes from Tokyos famous Nihonbashi Taimeiken restaurant

Heineken Beer Tender

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Homing: best practice

Indulgent products for everyday treating
Coca-Colas Barqs Floats is a treat not a thirst quencher Pepsi Vanilla nostalgic sweet indulgence

Cadburys Almond Biscotti dream with premium ingredients

Innovation in safety
Cloud Juice water bottled from pure rain Black Forest Pearl Mineralwasser mild, low sodium bottled water ideal for babies and older people

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Homing: trend clash

The debits and credits consumer Behavior characterized by moving between periods of unhealthy behavior (debits) to healthy behavior (credits) Represents a clash between health and indulgence

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Rule #5

If manufacturers cannot straddle two trends, consumers will

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The 10 mega-trends
Age complexity Gender complexity Lifestage complexity Income complexity

Convenience
Health Sensory Individualism Homing Connectivity
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Connectivity: values and attitudes

Beyond family and friends Communities Community feeling Nations Ethnocentrism The world Environmental concerns
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Connectivity: behaviors

Being connected Replacing family with friends Being cool Word-of-mouth

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Connectivity: best practice

Shareable product innovation
Masterfoods Celebrations Doritos Friendchips Eat Smart Vegetable Party Tray

Products that facilitate connections

Britvic J2O fit in with alcohol drinkers Molson Twin Label beer socializing aid on label P&G Pringles with Trivia Pursuit printed on crisps

Cool packaging
Asymmetric bottle that evokes the fluidity of water Shasta Shotrz in funky shorts design and size
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Connectivity: crossover trends

Connectivity + Homing = Entertaining at home
Entertaining at home occasions in Europe and the US will grow at 1% p.a. Related spending will grow at 3-5% p.a.

Product innovations
Fosters CoolKeg targets the barbecue occasion Stella Artois Dining Pack Spa Reine Rolling bottled water

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Conclusions
Use the rules
1. Track long-term mega-trends 2. Spot early opportunities amongst counter-trends 3. Find crossovers that combine two or more trends 4. Use fads when they allow you to reinterpret mega-trends 5. Look for unmet needs where consumer behavior is contradictory

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