24 Jun 2024 16:51

Advertising & Marketing

2018 Shows Promise For Global Product Companies

2017 was a good year for global consumers, with consumer confidence ending the year at a near-record level, according to the fourth-quarter 2017 Conference Board® Global Consumer Confidence Survey, which is produced in collaboration with Nielsen.

Notably, 51 markets finished the year with higher confidence than they did in 2016, and the gains were bigger than 2 points in 46 markets.

Among the world’s 10 largest economies, China, Japan, France and Italy experienced gains in confidence of more than 5 points last year. Comparatively, confidence in India, the U.S. and the U.K. saw confidence declines of more than 5 points. These three markets, however, remain among the most confident in the world.

In many markets, the upbeat sentiment helped bolster the sales of fast-moving consumer goods (FMCG), but inflationary pressure remains in certain markets and many consumers continue to focus on saving instead of spending.

So what does the landscape look like for brands, manufacturers, businesses, marketers and retailers? That’s where our global Quarter by Numbers report series comes in, which combines macroeconomic data, consumer insights, spending patterns and market commentary at both a regional and country level to help identify areas of opportunity around the world.

Here, we look at overarching trends in select countries.


Confidence across Europe increased steadily throughout last year, and many markets saw notable value growth in FMCG sales. GDP growth and low unemployment bode well for 2018 prospects, yet consumers have not unilaterally accepted price increases due to inflation.

Among the myriad economies across Europe, the Netherlands is worth noting, as the Central Bureau of Statistics reported that the Dutch economy saw the fastest growth of the past 10 years. Almost 60% of Dutch consumers (58%) say they feel positive about their personal finances, and just over half are positive about their future job prospects.

Backed by stabilized confidence, the Netherlands’ FMCG market grew by almost 2% last year (1.9%), with relatively strong second-half performance offsetting some contraction in the first half. Price remains a strong driver of growth, though volume sales are declining as a result of the developing hotel/restaurant/café industry and e-commerce adoption for certain categories.

The out-of-home dining and home delivery channels are particularly noteworthy; they’re growing into strong competitors with retailers, especially among Millennials. In 2016, the Netherlands’ market for delivered food totaled EUR420 million, while estimates for 2017 range from EUR1.3-1.4 billion.

Overall, the growing economy and ample consumer demand sets the stage for opportunity and experimentation in terms of price, innovation and premium concepts. For manufacturers and retailers, fresh food shows significant growth potential in the Netherlands, particularly for vegetables, fruit and cheese. Branded produce can also be a great avenue to drive sales and influence store choice as Dutch shoppers look to product quality when choosing where to shop.


In Latin America, GDP was up more than 1% in the fourth quarter of 2017, and prospects look good for 2018, with private consumption a heavy growth driver. However, consumers are investing less and wary about inflationary pressure; a number of presidential elections across the region slated for this year add additional uncertainty.

Performance in Brazil significantly outpaced the overall region, posting GDP growth of 2.4% in the final quarter of the year. Inflation remained low at 2.9%, allowing for a slight bounce-back in household consumption levels. Brazilians are also feeling optimistic about their finances going into 2018.

Brazilian household spending is up with respect to small purchases in the self-service and cash-and-carry channels, largely as a means to cover immediate needs and urgent item replacements. Despite the somewhat reserved consumer spending, however, the country’s FMCG volume sales did recover slightly at the end of 2017. But consumers maintain a savings-oriented mindset, and prospects for a greater recovery will depend on the speed and intensity of declining unemployment and how the market will react before presidential elections later this year.


Confidence across Asia-Pacific in 2017 was improved from 2016, but consumers remain cautious about excessive spending. They are optimistic about their personal finances and job prospects, but still have a savings-oriented mentality, which is having an effect on the FMCG industry.

Backed by a consumer confidence index score of 114, China ended 2017 on a positive note, with domestic consumption beating projections. GDP for the world’s second-largest economy continued its stable trajectory at almost 7% in the fourth quarter of 2017, and strong consumer sentiment and job market optimism fueled a willingness to spend.

The country’s shift toward consumption, services and innovation, combined with two large e-commerce festivals in late 2017 help power overall FMCG sales (online and offline) growth of 15% compared with fourth-quarter 2016. The dairy and beverage categories were big growth drivers, generating sales gains of 10% and 12%, respectively. On the online front, China’s massive Double 11 festival propelled online sales growth of 30% in the fourth quarter, driven in large part by purchases in the personal care category, which grew 35%.

Currently, offline still accounts for 73% of FMCG sales in China. E-commerce, however, is driving total growth and will continue doing so going forward. Importantly, as digital channels evolve and develop creative ways to connect with consumers, retailers and manufacturers will need to focus on creating “frictionless” consumer experiences, regardless of format. Ultimately, consumer experiences will drive channel success, and players that put the customer at the center are the ones that will come out on top.


Across Africa and the Middle East, global financial headwinds repressed growth in the fourth quarter of 2017, yet early indicators suggest an upswing in economic outlook and consumer sentiment this year. Inflation pressures are easing in several markets, and fewer consumers are citing the economy as a top concern. With a more positive mindset among consumers, retail sales should increase.

In Saudi Arabia, a massive national transformation plan is underway, much of which centers around the government’s Vision 2030 plan. The mid- to long-term outlook for the market is bullish: The economy should benefit from higher oil prices and a reduction in subsidies. Additionally, improved fundamentals have bolstered consumer confidence, which increased 6 index points to 99 in fourth-quarter 2017, just below the optimism base of 100.

Transition is never easy, however, and short-term challenges include lower personal income growth and inhibited spending power due to reduced subsidies and the implementation of new taxes (value added and sugar). The depressed sentiment is evident in FMCG sales, and the Saudi Arabian retail environment will require some time to adjust and normalize.

Amid the changes, Saudi consumers are trying to maximize value for their money. Promotional intensity is high, and preference for brands is growing. In many categories, manufacturers will need to identify the right price point and then develop a product to match.


Confidence across North America was down in the fourth quarter, largely as a result of concerns about job prospects and personal finances. The economy remains a top concern in both the U.S. and Canada, but to a lesser degree than in 2016. Amid a soft and challenging FMCG market, brands need to focus on messaging that speaks to individuals.

Navigating the FMCG industry remains difficult for U.S. manufacturers and retailers. And it’s not simply a matter of complexity around the path to purchase. The playing field is evolving as well. Notably, for the first time since 2009, the total number of brick-and-mortar stores in the U.S. declined. And that showcases the need to manage distribution between online and offline platforms, especially as we see a contraction in the number of physical stores.

As of 2016, 23% of consumers reported purchasing food, beverages or both online. Historically, 20% penetration has been a tipping point for industries to accelerate to online maturation. The online marketplace would be considered at a mature state when 70% of consumers are engaged. So now, we are past the tipping point and well on our way to reaching critical mass. Amidst predictions of digital food retailing saturation, it begs the question: Are retailers and manufacturers ready for e-commerce?

On average, a typical grocery store contains about 39,000 items. This leaves a world of decisions, not only for consumers, but for manufacturers and retailers, too. And in today’s retail environment, where we’re seeing entire aisles of the store posting flat or negative performance, it can be hard to sort through and find the right opportunities. In many cases, stagnant categories can be surprisingly expandable, but analyzing slow-performing items and using science are key to uncovering where there’s potential.

The challenges we’ve seen just signal heightened competition and the need to evaluate all potential avenues for growth in 2018.

(Visited 1 times, 1 visits today)