QUARTER BY NUMBERS Q1 2018 - GLOBAL HIGHLIGHTS - Nielsen
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GLOBAL HIGHLIGHTS QUARTER BY NUMBERS Q1 2018 Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 1
CONTENTS
WELCOME............................................................... 03
REGIONAL HIGHLIGHTS
ASIA-PACIFIC.................................................... 04
NORTH AMERICA............................................... 10
EUROPE WEST.................................................... 14
EUROPE EAST.................................................... 20
LATIN AMERICA.................................................26
AFRICA/MIDDLE EAST....................................... 31
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 2
WELCOME
Around the globe, how companies do business is changing. Consumer
behaviors are evolving as demographics shift and advances in technology
open up new avenues for people to engage with content and brands.
These new connections are unlocking opportunities for marketers
to reach consumers. But knowing how and where to connect with
consumers in this increasingly complex marketplace can be challenging.
As multinationals seek growth across the globe and local companies look
beyond their borders, they need help identifying the opportunities that
are right for their business.
Our Quarter by Numbers reports help our clients do just that. This
quarterly series provides a global snapshot of what’s going on in our
markets today. In first-quarter 2018, we cover 62 countries across five
regions—and we’re adding more every quarter.
We produce five reports to help clients zero in on specific regions of the
world. The series is available free of charge to all Nielsen clients. They are
also for sale to non-clients. This lite report represents an overview of the
insights detailed in the five regional reports.
Our five market-level reports are as follows: Asia-Pacific (15 countries),
North America (two), Latin America (seven), Africa and Middle East (eight)
and Europe (30).
If you are interested in purchasing one or more of the individual regional
reports, please visit www.global.shopnielsen.com.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 3
ASIA-PACIFIC At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 4
THE BIG PICTURE:
ASIA-PACIFIC
The Asia-Pacific region remains a dynamic region of change. In recent
Laura McCullough
months, there was a flood of events that could fundamentally change
Marketing
the playing field in the region. The Korean Peninsula is on the precipice
Effectiveness & Sales
of change with April’s historic summit between the leaders of North
Effectiveness Practice
Korea and South Korea greatly increasing prospects of a formal peace
Leader: Developing
treaty. In May, a new political party was voted into power in Malaysia
for the first time in 60 years, heralding major political and economic
reforms. Meanwhile, China’s Belt and Road initiative continues to be a
major topic for countries and companies alike and is set to provide many
opportunities and challenges for the region.
Behind the headlines lies the relatively normal backdrop of continued
economic expansion and growing opportunities in many of the region’s
markets. With increasing populations, rising disposable incomes and
rapidly connecting lifestyles, the Asia-Pacific is quickly expanding its
influence on the global economy.
Across the region, Vietnam, India, China and the Philippines boasted
the highest economic growth for the quarter, supported by strong and
growing consumer confidence in these markets. While there is always a
myriad of reasons behind a country’s economic growth, there are some
commonalities between these markets that contribute to their healthy
outlook. For example, accelerating urbanisation and increasingly youthful
populations are creating bigger workforces with more disposable income,
which in turn is boosting domestic demand in these countries. Other
markets face more challenging economic situations, such as Japan, South
Korea, Australia and New Zealand. In these mature economies with aging
populations, finding new avenues of growth is more difficult.
But no matter the backdrop, whether younger or older populations
and positive or challenging economic environments, there are common
themes emerging across all Asia-Pacific markets. Consumers are
increasingly aware (and often more skeptical) about what products and
services they buy. As their lives become more connected, they are clearer
about what they want and what they don’t want in products and services
and will actively read reviews and compare prices before they buy.
Consumer expectations are edging higher and higher, and their voice has
never been louder as they hold companies accountable by voting with
their wallets.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 5
THE BIG PICTURE:
ASIA-PACIFIC
Emerging trends are shaping shopper choices. Health remains a top
concern among consumers. Across many markets, health categories are
growing fast while some categories with unhealthy products are flat or
declining. Sugar taxes have recently been introduced in the Philippines
and Thailand, and consumers in these two countries are more intent
than anywhere else in the region to actively reduce their consumption of
categories like sugary beverages (45% and 38%, respectively).
Meanwhile, more than half of consumers across the region actively
read packaging and nutritional information on products to inform their
purchasing decisions. Corporations are responding with more innovations
in this space, often led by niche players that seem most in touch with
evolving consumer needs in the health space.
Sustainability and waste avoidance is another emerging signal of
change. Almost three-quarters (73%) of consumers across Asia-Pacific
are concerned about food and/or packaging waste, and over 80% want
companies to improve their environmental footprint. A consumer
groundswell is demanding less plastic bags and packaging waste and
governments and companies are beginning to respond in many markets.
Signals of change surround us, and it’s essential that we connect the
dots between them and look at potential disruptors in and outside of
our industry. In doing so, we gain insights into how the future operating
environment might look and its likely impacts. With this knowledge in
hand, we can better prepare for change and futureproof our businesses.
ASIA-PACIFIC ASIA-PACIFIC
32%
Trying to reduce
consumption
83%
Want companies to
implement programs to improve
of sweet beverages* the environment*
*Nielsen Global Survey 2017
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 6ASIA-PACIFIC AT A GLANCE
ECONOMIC PULSE OF CONSUMERS AROUND
ASIA-PACIFIC
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer
confidence levels above and below a baseline of 100 indicate degrees of
optimism and pessimism, respectively.
CONSUMER CONFIDENCE INDEX
Q1 2018 Q1 2018
Q1 GDP % GDP % Q1
vs Inflation Inflation vs
2018 change pa change pa 2018
Q4 2017 Q4 2017
Philippines 128 -3 6.8 3.9 5.4 1.8 Malayasia 104 10
Taiwan 79 -3 3.0 1.6 7.4 2.8 Vietnam 124 9
New Zealand 104 -2 - - 4.3 0.2 Singapore 97 3
Korea 59 -1 2.9 1.3 5.1 3.4 Indonesia 127 2
Hongkong 107 -1 4.7 2.4 0.9 1.3 Japan 86 2
Thailand 110 -1 4.8 0.6 6.8 2.0 China 115 1
2.3 1.9 Australia 91 1
7.4 4.6 India 130 0
CONSUMER CONFIDENCE INDEX *NZ Q1 ‘18 GDP is not available
Countries where economic growth is highest also have
some of the most optimistic consumers.
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Source: GDP and Inflation reflects % change per annum to Q1 2018 Economist Intelligence Unit (EIU)/local governments where not available in EIU
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 7ASIA-PACIFIC AT A GLANCE
CONSUMER SENTIMENTS IN ASIA-PACIFIC
WHAT ARE THE TOP TWO CONCERNS IN THE NEXT SIX MONTHS? Q1 2018
Type of concern
Health
44 47
The Economy
38 41
35 32
30 23
26 28 27 25 23 27 28 26 22 26 23
19 22 20
15 15 14 17 17 18 16
13
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Health 1 2 3 -3 1 0 -1 -4 3 0 -2 3 1 5 1
The
2 -2 4 5 -2 0 2 1 -2 1 1 -3 -1 1 2
Economy
Bars reflect Q1 2018. Table shows comparison to Q4 2017
WHO’S SPENDING, SAVING AND INVESTING? Q1 2018
After living expenses, how is spare money spent
Putting into
savings 73
68 65 63 65 68 65 67 66
64 64 62 59
Holidays/ 61
vacations 53 54 48 51 49 46
43 44 41
37 39
33 30 31 32 32
APAC AU CN HK ID IN JP KO MY NZ PH SG TH TW VN
Putting into
0 -2 -1 3 -2 0 0 4 4 5 6 6 1 3 1
savings
Holidays /
3 3 2 4 0 4 6 9 -1 0 6 0 4 6 2
vacations
Bars reflect Q1 2018. Table shows comparison to Q4 2017
Savings continues to be a key priority for consumers across
the region with increasing focus in particular markets like
Singapore and Philippines.
IN = India ID = Indonesia
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 8LOOKING THROUGH
ASIA-PACIFIC’S FMCG LENS
FAST-MOVING CONSUMER GOODS MARKET DYNAMICS
Weighted average – APAC – 14 countries
Nominal growth
Volume Growth
Unit value Growth
5.9%
5.2% 4.9% 4.9%
4.8%
4.4%
3.5% 0.6% 3.6% 3.8%
2.9% 2.4% 2.2% 1.5% 3.4% 2.5%
1.4% 2.7% 2.9%
1.9%
2.1% 2.3% 1.8% 1.7% 2.3% 2.3% 2.4% 2.1% 2.3% 2.0%
MAT MAT Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
YA TY
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q4 2017 and Q1 2018
China (+3.7%)
Japan (-0.3%)
Korea (+0.4%)
Thailand (-4.7%) Taiwan (-0.4%)
Hongkong (-0.2%)
India (+8.1%) Philippines (+0.5%)
Vietnam (+0.9%)
Malaysia (+5%)
Singapore (-2.1%)
Indonesia (-0.9%)
Avg. volume growth
Australia (+1.5%)
decreasing versus last period
Avg. volume growth increasing
versus last period
New Zealand (+1.3%)
Color coding indicates growth or declining trend compared to same 6 month period year ago
Average volume growth of Q4’17 & Q1’18 vs Q4’16 & Q1’17. Vietnam represents latest annual growth; no 2016 % growth available for comparison
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 9NORTH AMERICA At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 10
THE BIG PICTURE:
NORTH AMERICA
AN OPTIMISTIC START TO 2018
CONSUMER CONFIDENCE
Fast-moving consumer goods (FMCG) across North America saw positive
dollar performance in the first quarter of 2018. This was met with an
FACTORS Q1 2018
uptick in optimism. Up four points from the end of 2017, North American
consumer confidence reached an index score of 121 this quarter. 71% 72%
67% 68% 65% 62% 64%
While Canadians hover just below the global average (106), with a consumer
53%
confidence index of 103, America soars over 20 points higher at 123. 46%
Americans are feeling better about their job prospects, and this has driven
positive consumer sentiment. The economy, terrorism and health remain
top concerns for U.S. consumers; however, they’re concerning to fewer
individuals than we’ve seen previously.
While the perception of job prospects has improved for Americans, financial Job Personal Good Time
position has driven optimism for Canadians. In fact, 65% of surveyed Prospects Finances To Buy
Canadians indicate that they feel positively about the state of their personal
finances over the next 12 months, up from 59% last quarter. North America Canada U.S.
It’s clear that job prospects and personal finances have each bolstered
American and Canadian consumer confidence, respectively. But confidence
does not rule out concern, as debt has become top-of-mind in both
countries. From an FMCG perspective, dissecting this consumer sentiment
to understand spending intentions, can help guide your next steps forward.
TOP CONCERNS
CANADA U.S.
24 24
22 22 25 24
19 19 20 21 21 20 21 19
17 18
16
13 14
9
Health Debt The Food Utility The Terrorism Health Debt Job
economy prices bill economy Security
Q4 2017 Q1 2018
The Conference Board® Global Consumer Confidence Survey is conducted in collaboraCon with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 11NORTH AMERICA AT A GLANCE
CONSUMER SENTIMENTS IN NORTH AMERICA
TOP TWO CONCERNS OVER NEXT SIX MONTHS
Q1 2018
CA U.S.
24
22 21 22 21
20 19 18
16 15 14
11 12 12 11
9
5 3 4
2
The Terrorism Health Debt Job Utility Crime Political Immigration Food
economy security bills stability prices
While both nations are most concerned about the economy
this quarter, Americans and Canadians diverge among
other top concerns across North America.
TOP AREAS FOR SPENDING SPARE MONEY
CANADA U.S.
Savings 48 45
42 43
36 28
Paying off debts
39 36
Q4 2017
Holidays 25 32 Q1 2018
34 36
Home improvements
18 23
19 28
Clothes
25 27
23 27
Compared to the end of 2017, more Americans are paying
off debt with their spare spending money, while increasingly
more Canadians are vacationing with their extra cash.
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 12CANADA FAST-MOVING CONSUMER GOODS MARKET DYNAMICS
Latest 52 Weeks - Q1 2018
Dollar % Change
Unit Inflation/Deflation
Unit % Change
3.0% 3.4% 3.5%
2.6%
1.7% 2.5% 2.3% 0.3%
0.8% 1.9%
1.4% 0.9% 1.7% 0.0%
1.7% 1.5%
0.9%
1.0% 1.7% 1.7% 1.6% 1.8% 0.6% 1.5% 2.3% 3.2%
0.9%
-0.1% 0.0% -0.4%
MAT MAT Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
YA TY
Source: Nielsen MarketTrack, National All Channels, 52 Weeks to March 31, 2018
Excludes Fresh Random weight - Canada
Q1 posts highest dollar and volume growth in over a year.
U.S. FAST-MOVING CONSUMER GOODS OFFLINE MARKET DYNAMICS
Latest 52 Weeks - Q1 2018
Dollar % Change
Unit Inflation/Deflation
Unit % Change
1.3% 1.0% 2.6%
0.4% 0.4% 1.4% 1.3%
1.1% 1.4% 1.8%
0.7% 0.7%
0.0% 0.4% 0.8% 0.7%
0.0% 0.2% 0.8%
0.4% 0.3% 0.3%
-0.4% -0.2%
-0.3% -2.2% -0.5% -0.6% -0.6%
-1.8%
MAT MAT Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18
YA TY
Source: Nielsen Retail Measurement Services, Total Food View, Total U.S. (All Outlets Combined (xAOC), 52 weeks to March 31, 2018,
UPC-coded and random-weight/non-UPC data
For the first time since late 2016, the market has shown
positive performance across both dollar and unit volume.
While growth remains modest, conditions have greatly
improved compared to a year ago.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 13EUROPE WEST At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 14
THE BIG PICTURE:
EUROPE WEST
With this edition of Quarter by Numbers, we are pleased to provide
an even fuller picture, as we now include seven new markets (Austria,
Denmark, Finland, Ireland, Norway, Sweden and Switzerland).
After tough times in the last few years, 2017 showed a dynamic economic
environment across Europe, with positive consumer confidence in the
Olivier Lamare region reaching some of the highest levels seen for some time. If Europe
Retail Services remains far below the global average for consumer confidence, early 2018
Developed Markets confirms the positive trend in markets like Germany, Switzerland and
Portugal (up 5 index points).
Among the national issues of greatest concern, health is high on the list.
Some countries, like Portugal, Finland and Ireland, show notable peaks, but
the whole region lists health as a concern, with great opportunities in this
field (organic items and stores, “free from” products, healthy innovations).
GDP growth across the European Union (EU28) slowed at the start of 2018
after a stronger-than-expected 2017, in a recovery phase after a decade
of financial and economic crises. Most countries saw their GDP growing
at a slower pace this quarter. The more sluggish economic growth (+0.4%)
in the first quarter was related in some degree to cold weather, but the
consensus is that this is the start of a normalization of growth after a
number of years of monetary stimulus by the European Central Bank
(ECB).
After a strong end to 2017, FMCG performance in the first quarter
weakened slightly, with volume growth receding to +0.9% (down from
+1.7% in Q4). However, this is still close to the underlying trend of the last
12 months. Value sales across Europe increased by +3.7%, down from
+4.4% in the fourth quarter. There was also a growth upside in the first
quarter from an early Easter in 2018 (calendar effect). A few markets lead
growth in the region, like Germany (+4.4%) and Portugal (+4.1%), with solid
growth in value. Inflation is feeding growth in every market, but volumes
are declining in several countries.
Putting money into savings is the first priority for the majority of markets,
and consumers continue to navigate the retail environment with a savings
mindset, seeking the best deals when shopping in terms of price and
promotions, but also brands and channels.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 15Private label and discounters are on the rise in many markets (France and
Portugal being the exceptions), pushing hard and gaining share. Many
retailers across the region have revamped their own brands, upgrading
ranges and investing in communication.
In a significant number of markets, FMCG leaders are also threatened by
small brands and local champions that are capitalizing on revived “local
pride,” leveraging an appeal from consumers toward local consumption
and a push from retailers.
Inflationary pressures continue with unit value growth of +2.8%. At the
moment, there is no indication across most of the bigger European
economies that FMCG spend is being affected by the continuation of
moderate inflation. Looking ahead, the second quarter will be a better
indication of both consumer sentiment and shopper behavior for the rest
of the year.
*European Growth Reporter Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 16EUROPE WEST
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer
confidence levels above and below a baseline of 100 indicate degrees of
optimism and pessimism, respectively.
CONSUMER CONFIDENCE INDEX
Q1 2018 Q1 2018
Q1 GDP (annual GDP (annual Q1
vs Inflation Inflation vs
2018 % growth) % growth) 2018
Q4 2017 Q4 2017
Spain 91 -2 2.9 0.9 2.0 0.8 Portugal 90 5
Denmark 114 -2 -0.8 0.7 2.3 1.3 Germany 108 5
Austria 100 -2 3.1 1.9 - 0.7 Switzerland 104 5
Italy 66 -2 1.4 0.8 1.6 1.5 Belgium 88 3
- - Sweden 99 2
2.1 2.0 Norway 89 2
2.7 0.8 Finland 82 2
3.1 1.2 Netherlands 101 1
1.2 2.4 UK 96 0
2.1 1.5 France 79 0
7.0 0.5 Ireland 103 0
CONSUMER CONFIDENCE INDEX
Consumer sentiment improves across most of Western
Europe’s key markets.
GDP and Inflation reflect % change per annum to Q1 or (-) indicates not available at time of publication
Source: Economist Intelligence Unit (EIU)/OECD/local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 17EUROPE WEST
MARKETS AT A GLANCE
CONSUMER SENTIMENTS IN EUROPE
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
Type of concern
Health
30 28 28 29 30
Job Security 26
20 22 20 21 21 20
19 18 17 18 18 17
15 13 17 16 15 16
12 11 11 13
8 8 9
6
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Health 0 3 3 5 3 -1 0 3 3 1 4 -3 1 -2 3 4
Job
0 -3 2 0 1 0 2 1 0 1 1 0 -3 2 1 -4
Security
Bars reflect Q1 2018. Table shows comparison to Q4 2017
WHO’S SPENDING, SAVING AND INVESTING?
After living expenses, how is spare money spent
Putting into savings
Holidays/vacations
New clothes
55 52 53 52 52
50 51 49 48
43 48 48 47 45 48 48 46
40 37 37 43 44 42 43
35 34 35 35 37 33 37 36 39 37 35 38
33 30
29 28 28 29 28 28 25
24 25 22
6
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into
2 0 2 1 1 -2 4 6 0 7 4 8 3 5 1 5
savings
Holidays/
1 -1 3 3 6 5 -1 2 6 5 1 -4 0 -1 5 3
vacations
New clothes 0 -2 0 2 -3 3 0 4 8 2 2 -2 0 -3 0 1
Bars reflect Q1 2018. Table shows comparison to Q4 2017
Saving remains a key priority for majority, with an
increasing focus for consumers in Italy and the U.K.
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 18LOOKING THROUGH EUROPE
WEST’S FMCG LENS
FAST-MOVING CONSUMER GOODS MARKET DYNAMICS – Q1 2018
Weighted average – West Europe – 15 countries
Nominal growth
Volume change
Unit value change
4.4% 4.1%
9.7% 0.8% 9.3%
3.3% 0.2% 8.2% 1.1%
3.1% 3.0% 2.9% 3.1% 3.2%
6.1% 2.6% 2.8% 0.6%
1.8% 1.8% 1.0% 0.8%
2.0% 2.6% 2.4%
1.4% 1.9% 3.4%
3.6% 0.8% 1.0% 2.0%
1.5% 2.1% 0.7% 0.6% 2.9% 0.3% 0.7% 2.0% 3.0% 2.6%
-0.7% -1.0% -1.0% -0.8%
-0.6% -1.3%
-1.3%
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
WHERE ARE THE FAST-MOVING CONSUMER GOODS GROWTH OPPORTUNITIES?
Average volume growth Q4 2017 and Q1 2018
Avg. volume growth
decreasing versus last period
Avg. volume growth increasing Norway (+0.7%)
versus last period
Finland (-0.2%)
Sweden (+0.6%)
U.K. (+0.9%) Denmark (-0.8%)
Ireland (+2.1%) Netherlands (-0.2%)
Germany (+0.8%)
Belgium (-0.5%) Austria (+1.4%)
Switzerland (-0.1%)
France (+0.3%)
Italy (+2%)
Portugal (+1.9%)
Spain (+1.6%)
Colour coding indicates growth or declining trend compared to same 6 month period year ago
Average volume growth of Q4’17 &Q1’18 vs Q4’16 & Q1’17.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 19EUROPE
CENTRAL AND EAST
At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 20THE BIG PICTURE: EUROPE
CENTRAL AND EAST
Myriad factors across Eastern and Central Europe are influencing
consumer sentiment and the performance of FMCG markets. Political
Daniel Chorbadjian unrest, new laws and government policies, inflation rates, Easter dates and
Managing Director even weather conditions are among the many mentioned by our market
Eastern Europe leaders in the first quarter.
Understanding how these affect FMCG market performance can be
challenging at times, especially when multiple drivers are often at play in
the one market. While our Quarter by Numbers indicators provide strong
clues to what is going on, sometimes we need to dig deeper and look at
the relationships between the different factors to really understand the
story.
In the first quarter, we see many such examples at the macro level.
For instance; the Czech Republic, Hungary, Latvia and Slovakia all have
growing GDP, relatively low inflation rates and increasing consumer
Roberto Pedretti
confidence. However, while FMCG growth in the first three countries is
Group Managing
relatively strong and balanced, retail spend slowed in Slovakia. Meanwhile,
Director Turkey
Kazakhstan, Turkey and Ukraine are also enjoying strong GDP growth,
and Central Eastern
but high inflation and other factors in these markets have dampened
Europe
consumer confidence and led to different FMCG results. In Kazakhstan,
rising inflation has pushed people into a savings mode and slowed FMCG
growth, while wage increases in the Ukraine offset inflation and led to
accelerating FMCG growth. Many influencing factors are even more
specific and unique to a country. In this quarter alone, we saw the impact
of minimum wage increases in Latvia, reduced Sunday trading in Poland,
and voluntary food labelling changes in Russia, just to name just a few.
Each quarter, our Nielsen market leaders help reveal the story behind the
numbers in all our focus countries. However, it’s more important than ever
for FMCG companies to also closely track the various dynamics at play
in each country where they operate. By doing so, FMCG players will have
clearer insights into how the market will evolve in the coming quarters and
be better positioned to develop the strategies needed to manage risks and
seize opportunities.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 21Despite the unique context of each market, regional trends are still
apparent. One clear insight is that smaller players in both the retailing and
manufacturing space are winning market share as they prove more agile
to adapt to short-term market cycles. With that said, it’s important to keep
an eye on the future and build longer-term strategies and capabilities.
Some of the general takeaways when we look across Eastern and Central
Europe are as follows:
• Many countries will experience population declines through 2025.
• All countries will become more urbanised, but many Central and
Eastern European countries will have large populations residing in
smaller urban centres.
• There will be a significant ageing in most countries.
• More of the population will be connected through technology.
These will not be new insights for most readers, and how FMCG companies
are integrating these factors into their planning and development varies
considerably. For example, some players are looking to develop age-
focused health products while others are intent on expanding their retail
outlets into smaller towns.
We hope our insights on the future macroeconomic environment and
“What’s Next” in the evolving consumer, retail and packaged goods
environment can help inform your strategies.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 22EUROPE CENTRAL AND EAST’S
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer confidence
levels above and below a baseline of 100 indicate degrees of optimism and
pessimism, respectively.
CONSUMER CONFIDENCE INDEX
Q1 2018 GDP Q1 2018
Q1 GDP (annual Q1
vs (annual Inflation Inflation vs
2018 % growth) 2018
Q4 2017 % growth) Q4 2017
Turkey 89 -23 7.4 10.3 5.2 2.0 Latvia 86 13
Bulgaria 81 -8 3.5 2.0 4.4 1.9 Czech Rep. 108 4
Ukraine 58 -3 3.1 13.8 4.4 2.0 Hungary 78 4
Kazakhstan 79 -3 4.1 6.8 3.6 2.4 Slovakia 90 4
Lithuania 77 -2 3.5 3.4 1.5 0.3 Greece 61 2
Russia 68 -1 1.0 2.4 4.0 4.7 Romania 91 1
5.1 6.0 Belarus 60 0
5.1 1.5 Poland 103 0
3.6 3.1 Estonia 81 0
CONSUMER CONFIDENCE INDEX
A mixture of regional tensions and improving economic
conditions have been the main reasons for Consumer
Confidence Index movement.
GDP and Inflation reflect % change per annum to Q1 2018 /latest available data
Source: Economist Intelligence Unit (EIU)/local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 23EUROPE CENTRAL AND EAST’S
MARKETS AT A GLANCE
CONSUMER SENTIMENT IN EUROPE
WHAT ARE THE TOP TWO CONCERNS IN THE NEXT SIX MONTHS?
Type of concern
Health
34 37
Job Security 33 33
28 27 27 28 29 27
24 25 24
22 21 20 22 22 20 20 23 22
19 18 20 19
14 14
10 11
4 6
EU BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
Health 0 2 6 3 1 0 2 4 -2 -4 3 -4 -1 0 -6 1
Job Security 0 -5 -1 1 -5 0 0 4 3 -8 2 -2 -1 4 1 -3
Bars reflect Q1 2018. Table shows comparison to Q4 2017
WHO’S SPENDING, SAVING AND INVESTING?
After living expenses, how is spare money spent
Putting into savings
Holidays / vacations
54
New clothes 48 48
47 45
40 38 40 39 40
37 37 36 36 38 37 37
34
31 32 30 30 33
29 29
33
30 29 27
32 31
27 24 26 26 27
25 25 22 23 23 21 25
19 18 21
17 15
EU BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
Putting 2 5 1 5 3 6 1 -2 2 -7 2 -2 -1 3 0 -2
into savings
Holidays /
1 4 -4 8 -1 5 2 0 2 -3 4 2 -4 2 -2 -4
vacations
New clothes 0 -2 -9 -1 -5 5 2 -3 -1 -4 6 0 -1 -3 4 -6
Bars reflect Q1 2018. Table shows comparison to Q4 2017
Putting money into savings is a leading response and
highlights a cautious mindset across Europe.
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 24LOOKING THROUGH EUROPE
CENTRAL AND EAST’S FMCG LENS
FMCG MARKET DYNAMICS
Weighted average – Europe Growth and Emerging – 19 countries
Nominal growth
20.8%
Volume change 2.3%
Unit value change
15.6%
10.5%
8.0% 2.6% 0.9% 8.3% 8.6%
5.7% 4.7% 4.7% 1.6% 5.1% 6.1%
4.9% 4.6% 4.6% 4.4% 5.8% 4.8% 3.0%
2.7% 2.8% 2.6% 3.5% 4.6%
3.1% 3.1% 3.7% 4.7% 3.8% 1.9% 3.9% 3.6% 1.2% 13.3% 10.4%
-1.9% -0.1% -3.1% -2.1% 0.9% 1.5% -1.8%
BG BL CZ EE GR HU KZ LT LV PL RO RU SK TR UA
*BL = Belarus
WHERE ARE THE FAST-MOVING CONSUMER GOODS GROWTH OPPORTUNITIES?
Average volume growth Q3 2017 and Q4 2017
Avg. volume growth
decreasing versus last period Russia (+2.1%)
Czech Rep. (+0.5%)
Avg. volume growth increasing Estonia (-2.9%)
versus last period Latvia (+1.1%)
Lithuania (-2.3%)
Belarus (+3.7%) Kazakhstan (-3.2%)
Poland (+3.8%) Ukraine (+9.8%)
Slovakia (+1.2%)
Romania (+3.7%)
Hungary (+4%) Bulgaria (+5.8%)
Turkey (+3.3%)
Greece (+5.2%)
Colour coding indicates growth or declining trend compared to same 6 month period year ago.
Average volume growth of Q4’17 & Q1’18 vs Q4’16 & Q1’17.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 25LATIN AMERICA At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 26
THE BIG PICTURE:
LATIN AMERICA
Across Latin America, economic recovery is looking promising in
a number of markets, with increasing optimism that will continue
throughout 2018 due to improved global FMCG performance, higher raw
material prices with increasing private and public investment in many
markets. However, experts from BBVA* forecast there may be economic
softness in countries like Argentina, due to the impact of severe drought
conditions affecting one of the world’s biggest producing soybean
countries, and Peru, as a result of recent political instability. Across Latin
America, 2018 is set to be a year of political change, which will bring
economic uncertainty, with many countries facing upcoming elections
and corruption scandals.
Inflationary pressure is easing across many markets, with the exception
of Argentina and Mexico, where levels remain high, but show signs
of improvement. The economy remains the No. 1 concern across the
region, creating a cautiousness in consumer spending. Consumers are
most likely to spend spare cash paying off debt and putting money into
savings. More than three in four consumers across the region are looking
to save money on household expenses by cutting down on out-of-home
entertainment, cutting back on clothes and switching to cheaper grocery
brands. To maximize the effectiveness of in-home consumption, Latin
American consumers are looking for smarter ways to manage their
budgets and seeking alternatives to manage higher prices. A robust
pricing strategy is critical in this environment. That will help drive short-
term consumption opportunities via promotions, multipacks, or larger
value pack sizes while planning ahead to ensure strategies that consider
channel diversification, smart marketing investment and innovation can
drive medium- to long-term success.
*BBVA: Bilbao Vizcaya Argentaria Bank
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 27THE ECONOMIC PULSE OF CONSUMERS AROUND
LATIN AMERICA
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer
confidence levels above and below a baseline of 100 indicate degrees of
optimism and pessimism, respectively.
Latin Focus Economics Consumer Confidence Index
GDP (annual % growth) Inflation Q1 2018 vs.
Q1 2018
Q1 2018 Q1 2018 Q4 2017
Brazil 2.2 2.9 88 3
Chile 3.6 2.5 95 -3
Mexico 1.6 5.1 93 5
Colombia 2.6 3.4 99 -1
Peru 3.6 1.0 95 -9
Argentina 3.3 24.1 83 -5
Costa Rica 3.3 2.4 83 -3
Political noise and negative sentiment toward future
economic prospects across the region contributed to a
decline in confidence
Sources: The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen
GDP and Inflation from Latin Focus, Q1 2018
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 28LATIN AMERICA AT A GLANCE
CONSUMER SENTIMENTS IN LATIN AMERICA
WHAT ARE THE TOP THREE CONCERNS IN THE NEXT SIX MONTHS?
Type of concern (%)
The economy 37 38
32 33 35 35 32 31 33
Crime 28 27 28 26 29 29
23 22 24 24 24
Job Security 18
15 20
11
Latam BR CL MX CO PE AR CR
The economy 0% -1% 0% -3% -1% -1% 6% 10%
Crime 1% 5% 1% 3% 0% 6% -6% -2%
Job security -3% 2% 2% -4% -8% -2% -1% 1%
Bars reflect Q1 2018 - Table shows comparison to Q4 2017
ACTIONS TAKEN TO SAVE ON HOUSEHOLD EXPENSES
Top 3 actions taken to save money (%)
Out-of-home
entertainment
New Clothes 60
58
54
Grocery Brands 49 48 47 49 47 49
44 42 42 44 44
40 39 37 40
35 34 36
30 32 30
Latam BR CL MX CO PE AR CR
Grocery Brands 2% -1% 4% 5% -2% 6% -1% 1%
Out-of-home
1% 2% -3% -2% 2% 5% -5% 8%
entertainment
New Clothes -2% -6% 5% -3% -4% 6% 0% 5%
Bars reflect Q1 2018 - Table shows comparison to Q4 2017
Consumers are seeking ways to deal with the high prices;
Chilean, Colombian and Argentinian are the most budget
conscious with FMCG.
Source: The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 29LOOKING THROUGH LATIN
AMERICA’S FMCG LENS
FAST-MOVING CONSUMER GOODS MARKET DYNAMICS
Nominal growth Weighted average – Latin America – 13 countries*
Unit Value Growth
Volume Growth
8.5
7.3
7.0
9.2 5.6
8.6 4.3 4.6 1.5
9.3 4.8 4.5 4.8
8.2
5.5 6.9 4.4 4.0 2.1
4.1
-2.2 -2.6 -2.3 0.6 0.1 0.9 0.6
-1.2 -1.2 -0.8
MAT MAT Q1 ‘16 Q2 ‘16 Q3 ‘16 Q4 ‘16 Q1 ‘17 Q2 ‘17 Q3 ‘17 Q4 ‘17
YA TY
(*) Mexico, Nicaragua, Panama, Costa Rica, El Salvador, Guatemala, Honduras, Colombia, Chile, Argentina, Brazil, Peru and Uruguay, data from Q1’14 until present.
Excluded: Venezuela, Puerto Rico and Dominican Republic.
WHERE ARE THE FAST-MOVING CONSUMER GOODS GROWTH OPPORTUNITIES?
Average volume growth Q4 2017 and Q1 2018
Mexico (+2.7%)
Costa Rica (+0.4%)
Colombia (-0.3%)
Brazil (-1.7%)
Peru (-5.3%)
Color coding -
Chile (-0.5%)
Average Q4 2017 & Q1 2018
VS. Q4 2016 & Q4 2017
Argentina (+8.3%)
Avg. volume growth decreasing
Avg. volume growth increasing
Color coding indicates growth or declining trend compared to same 6 month period year ago
Average volume growth of Q4 ‘17 & Q1 ‘18 vs. Q4 ‘16 & Q1 ‘17
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 30AFRICA AND
MIDDLE EAST
At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 31THE BIG PICTURE:
AFRICA AND MIDDLE
EAST
We expect 2018 to be a more prosperous year for many of the Africa and
Middle East (AME) markets, which faced numerous economic, political and
social challenges in 2017. Market conditions will continue to be fluid as
reforms and changes filter through to consumers, playing out in adjusted
shopping and buying behavior. Equally, manufacturers and retailers are
adapting to the altered consumer circumstances and actions by redefining
their positioning and offerings to meet the new and changing consumer
needs while pursuing growth.
The implementation of government taxation on consumer goods has
been high on the agenda in Saudi Arabia, United Arab Emirates and South
Africa. These markets have implemented Value Added Tax (VAT), sugar
taxes or changes in VAT tariffs. Consumers have responded with varying
degrees of pessimism, while manufacturers and retailers have responded
with tactics to minimise price increases. These manoeuvres will continue
to evolve during the year until a suitable equilibrium is achieved.
The easing of inflation in Egypt, Nigeria, Ghana and South Africa has
restored some growth to these markets, as consumers are increasingly
able to open up their wallets to products and categories beyond the day-
to-day essentials. Opportunities are abundant for businesses that can tap
into essential needs and provide small treats for consumers with growing
discretionary cash.
Retailing in AME’s markets will continue to be diverse and progressive,
with development not limited to modern trade formats. There are shifts
to formal, branded channels when they are established and where
assortment and pricing is more competitive. But there is also no shrinking
of traditional trade formats, which in tougher cycles, are flexible in
adjusting to smaller shopping baskets and fulfilling immediate or daily
needs.
Looking further ahead, Africa and Middle East will soon have the most
youthful population around the globe, and young, urbanised and digitally
primed consumers will have unique needs to satisfy, which all starts with
identifying the opportunities of tomorrow, today.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 32AFRICA AND MIDDLE EAST
AT A GLANCE
ECONOMIC AND CONSUMER PULSE
The Nielsen Consumer Confidence Index measures perceptions of local
job prospects, personal finances and immediate spending intentions.
Consumer confidence levels above and below a baseline of 100 indicate
degrees of optimism and pessimism, respectively.
CONSUMER CONFIDENCE INDEX
GDP GDP
CCI CCI CHG CCI CHG VS
(annual Inflation (annual Inflation
Q1 2018 VS P/Q Q1 2018 P/Q
growth) growth)
Morocco 67 -13 3.9% 2.5% 1.5% 4.1% South Africa 95 15
Nigeria 113 -9 1.9% 11.2% 5.0% 4.2% Kenya 102 8
United
Arab 110 -8 0.0% 3.4% 5.3% 11.6% Egypt 85 1
Emir
Nigeria 95 -4 -1.2% 2.8% 8.1% 10.4% Ghana 120 0
CONSUMER CONFIDENCE INDEX
GDP and Inflation are annualised, based on the latest quarter available GDP – Q3’17, Inflation Q4’2017
Consumer confidence responds favourably across most of the
AME markets as economic indicators improve and inflationary
pressure eases.
Source: Trading Economics: GDP and inflation, The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 33AFRICA AND MIDDLE EAST
AT A GLANCE
CONSUMER SENTIMENT
Top 2 concerns in the next six months
42% 45%
The Economy
Job Security 31%
27% 26% 28%
23% 23% 24%
17%
EGY MOR KSA UAE ZA
The Economy -3 0 -1 -5 2
Job Security 7 1 1 -5 6
Chart - Current quarter, Table – Change vs PQ Top Concern and Spending data unavailable for Ghana, Kenya and Nigeria
WHO’S SPENDING, SAVING AND INVESTING?
After living expenses, how are consumers using their spare money?
I have no spare cash
Putting into savings 46%
43% 43%
39%
30% 32%
22% 19% 16%
15%
EGY MOR KSA UAE ZA
I have no spare
0 3 1 -3 8
cash
Putting into
21 -2 21 23 -6
savings
Egyptians, Emiratis and Saudis are opting to save due to
uncertain economic conditions and rising prices.
Source: The Conference Board ® Global Consumer Confidence Survey is conducted in collaboration with Nielsen
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 34FAST-MOVING CONSUMER
GOODS RETAIL LENS
FAST-MOVING CONSUMER GOODS - MARKET DYNAMICS
Weighted average growth Q1’18 vs year ago
Nominal value growth
23.9%
Volume growth
4.6%
Unit value growth
2.8%
5.5%
4.9% 0.2%
19.3% 4.8% 2.2%
0.0% 1.3% -0.9%
-3.6% -11.5% -0.6% -0.3%
2.2%
-3.7% -4.2% -0.6% -3.8%
-6.6% -2.8%
-2.9%
EGY MOR KSA UAE ZA NGR GH KNY
WHERE ARE THE FAST-MOVING CONSUMER GOODS GROWTH OPPORTUNITIES?
Average volume growth Q4’17 and Q1’18 vs year ago
Egypt (-0.6%)
Morocco (-4.6%) United Arab
Emirates (-2.6%)
Saudi Arabia (-10.8%)
Ghana (+2.1%)
Nigeria (-8.6%) Kenya (-6.7%)
Avg. volume growth decreasing
Avg. volume growth increasing
South Africa (+3.4%)
Colour coding indicates growing or declining trend – Average Q4’16 & Q1’17 vs Q4’17 & Q1’18
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 35INTERESTED IN ADDITIONAL
INSIGHTS?
If you are interested in purchasing one or more of the
regional Quarter by Numbers reports, please visit
www.global.shopnielsen.com.
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 36ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data
analytics company that provides the most complete and trusted view
available of consumers and markets worldwide. Our approach marries
proprietary Nielsen data with other data sources to help clients around
the world understand what’s happening now, what’s happening next,
and how to best act on this knowledge. For more than 90 years Nielsen
has provided data and analytics based on scientific rigor and innovation,
continually developing new ways to answer the most important questions
facing the media, advertising, retail and fast-moving consumer goods
industries. An S&P 500 company, Nielsen has operations in over 100
countries, covering more than 90% of the world’s population. For more
information, visit www.nielsen.com.
THE SCIENCE BEHIND WHAT’S NEXT ™
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 37You can also read
