Mexico: Leading the Way in Latin America - Gutierrez

Report
MEXICO
LEADING THE WAY IN LATIN AMERICA
Germán Gutiérrez
Cluster Leader for Mexico and Central America
September 30, 2014
AGENDA
1 Mexico in the world
2 Key strategies to succeed in the Mexican market
Global Trends: Some global trends represent great growth
opportunities for Mexico
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Mexican market: Idiosyncrasy and economic capacity determines
consumer behavior
3 Highlights: Final thoughts
2
MEXICO IN THE WORLD
U.K.
2X Mexico’s GDP
U.S.
13X Mexico’s GDP
CHINA
7X Mexico’s GDP
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
BRAZIL
~2X Mexico’s GDP
MEXICO
GDP
More than 120 million potential consumers + 12 million overseas
*IME - http://www.ime.gob.mx/es/resto-del-mundo // GDP: IMF, USD
3
MEXICO: GREAT ECONOMIC EXPECTATIONS
“ Chrysler announced they
$1.3
billion to open plants in
Mexico, and Audi has
also invested over $1 billion to
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
were investing
build their luxury cars in San José
Chiapa.”
Reuters UK
“China’s share of the American
import market has also declined,
and Mexico has rushed to claim it;
their trade with the United
States has grown to over
$500 billion annually.”
Forbes
“ In February,
Moody's MCO +0.3%
granted Mexico its first
ever A3 rating for its
government bonds, an expression
of confidence the market has in
Mexico’s reforms.”
Forbes
4
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
MEXICO IS APPOINTED AS A RISING STAR
NOW
2030
Mexico occupies the
14th position in terms of
GDP: $1.3 trillion*
Mexico will occupy the
8th position above France
and U.K.*
Tax
Reform
Energy
Reform
Labor
Education
Competition
Politics
STRUCTURAL REFORMS
* FMI 2013 // *PricewaterhouseCoopers (PwC).
5
KEY SUCCESS STRATEGIES FOR THE MEXICAN MARKET
GlobalGLOBAL
Trends TRENDS
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Older
Consumers
Obesity
Working
Women
Young Households
Without Kids
Online
(E-commerce & Social
Media)
LOCAL KEY SUCCESS FACTORS
Mexican Roots
Limited Pocket
Mom & Pops
Aspirational
6
OLDER CONSUMERS
40+ POPULATION SEEKING HEALTHY PRODUCTS
% Over 40´s population
30.7%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
2014
35.9%
44.4%
40.5%
2024
CONSUMPTION
66% of households consume
products for health care reasons
Source: INEGI2014, PROFECO 2012 Nielsen Homescan July 2014 vs July 2013
2034
44.4%
2044
HEALTH
+35% per home in health
expenditures
8
OBESITY
OPPORTUNITY TO DEVELOP HEALTHY
PRODUCTS TO HELP CONSUMERS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Since January 1,
2014,
+8% tax on highcalorie products
Cereal Bars
Soda & Juices
:
Cereals
Cookies
Snacks
Health is a growing concern: Spend per occasion on healthy goods has increased 24%
Source: Nielsen Scantrack 2014
10
NOW, 11% FMCG PRODUCT SALES ARE RELATED TO
WELLNESS
WELLNESS MIX
MAINLY
COOKIES
& SODA
17%
16%
30%
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MAINLY
EGGS &
YOGURT
1%
36%
Functional
Light
Reduced
Healthy
Organic
Reduced & organic increased above Nielsen Basket (6% & 8% respectively)
Source: Nielsen Scantrack SS, RY April 2014 vs RY April 2013
Nielsen Basket growth 5.2%
11
WORKING WOMEN
34%
WORKING
FEMALE
HOUSEHOLDS
2010
1990
NECESSARY TO DEVELOP CONVENIENCE
PRODUCTS FOR THIS GROWING SEGMENT
49%
CANNED & DEHYDRATED SOUPS
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Working Female
Households
+9% more
WORKING
FEMALE HH
NON-WORKING
FEMALE HH
penetration in
Working Female
Households**
40% of growing categories are related to convenience
Nielsen Homescan 2014* /// Nielsen Scantrack 2014**
13
FAMILIES WITHOUT KIDS
YOUNG HOUSEHOLDS WITH NO KIDS
Not the highest income, but interesting
% of 2050 population
VS 2010
18%
+9%
Mono component
Household
Great Opportunity
Youth with income living with their
parents
10%
Avg. monthly Income
20-29 w/o kids
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DINKS
$385
DLLS
$381
Low SEL HH
Source: CONAPO, INEGI and “El Economista”. Income – Estimated from ENOE
15
YOUNG HOUSEHOLDS WITH NO KIDS
Not the highest income, but unencumbered
% of 2050 population
VS 2010
18%
+9%
Great Opportunity
Mono component
Household
Focus on brands 19-25 years old
% value sales growth in Mexico
10%
36.7%
Avg. monthly Income
20-29 w/o kids
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DINKS
22.4%
13.9%
12.1%
10.6%
Snack
Personal
Care
12.6%
$385
Food Beverages
DLLS
$381
Alcoholic
Drinks
Total
Low SEL HH
ONAPO, INEGI and “El Economista”. Income – Estimated from ENOE Nielsen Baskets 2013
16
Need to start the targeting and
communication process 10
years before
CONNECTED CONSUMERS
ONLINE: HOW DO WE REACH THE CONNECTED CONSUMER?
52% of Mexican population has an Internet connection
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
% Internet users – SEL
Mexico
21%
20%
36%
27%
43%
53%
2011
2013
D+D
ABC+
PERCENT OF USERS BY DEVICE
36%
LAPTOP
44%
PC
33%
SMARTPHONE
13%
TABLETS
C
19
CONVENIENCE IS A MAJOR DRIVER OF ONLINE SHOPPING
•
•
5th
In the U.S., more than 128 million people
connect to Facebook each day
largest
market for
Facebook
In Mexico, Facebook has +28 million web
users and 20 million mobile users per day
Millennials – Y Generation (born 1976 to 1990)
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Because…
WHO
≈ 50%
will buy online
Facebook: Netmedia // Source: Nielsen Global Survey of E-commerce, Q1 2014
WHY
1) It’s convenient
2) It’s fun
3) I get notifications
20
KEY SUCCESS STRATEGIES FOR THE MEXICAN MARKET
GlobalGLOBAL
Trends TRENDS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Elderly
Needs
Obesity
Households With
Female Working
Young Households
Without Kids
Online
(E-commerce & Social
Media)
LOCAL KEY SUCCESS FACTORS
Mexican Roots
Limited Pocket
Mom & Pops
Aspirational
21
MEXICO: COUNTRY OF TRADITIONS, COLORS,
FLAVORS AND AROMAS
A COUNTRY OF COLORS, FLAVORS AND AROMAS
DIET
ACTIVITIES
FAMILY TIME
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Preferred
activity for
spare time (66%
of households)
TRADITIONS
Religious celebrations
TORTILLAS
>1kg per
family per day
DAY OF
THE DEAD
STRONG
FLAVORS
POSADA
(Christmas
Holiday)
SOFT DRINKS
Per capita
consumption
of 180 liters
THREE WISE
MEN DAY
Average number of people in household: 4
23
MEXICAN ROOTS: A BRIGHT SPOT
Candles
Religious
candles: one of the
most popular
+9%
vs 2013
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in this market
2013
2014
Market size comparable to the soft drinks market*
Sales Value MX (´000)
SS+Wors+CC+Drugstores
*A. Nacional de Velas
24
IMPLICATIONS OF THE MARKET
Every Mexican eats an average of
15 pounds of chiles per year
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Value for consumers
Less price
elasticity
25
EFFIE AWARDS 2014
TIGHT AND LIMITED POCKET
MEXICAN POPULATION: TIGHT AND LIMITED POCKET
0
High SEL
10
60
Low SEL
30
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Medium SEL
HOUSEHOLD STRUCTURE
Source: ENIGH 2012 and 2010/ BBVA Research 2014.
*Monthly Average Income (USD)
28
MEXICAN POPULATION: TIGHT AND LIMITED POCKET
INCOME STRUCTURE
High SEL USD $3,012*
27
10
Low SEL USD $381*
60
36
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
30
37
Medium SEL USD $1,050*
HOUSEHOLD STRUCTURE
U.S. Average: USD $4,300
Source: ENIGH 2012 and 2010/ BBVA Research 2014.
*Monthly Average Income (USD)
29
AND HOW DO THEY DISTRIBUTE THEIR INCOME?
Transportation
House Cleaning
10%
6%
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Low SEL
Food, Tobacco
H&B
52%
11%
Others
21%
69%
Others= House, Education, Clothes & Health
Source: ENIGH 2012
30
MOM & POP STORES
MOM & POP STORES
Main purchase channel
for 60% of population
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Almost daily purchases
Consumers receive a “trustworthy credit”
Source of self-employment
32
MOM & POP STORES
A channel defined by high frequency and small packages
SALES STRUCTURE ACCORDING TO PRICE POINTS
Cookies. Value Sales. RY July 2014
8.9
8.7
38.0
22.4
90.3
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44.6
68.4
16.0
Supermarkets
< 1 dlls
Traditional
< 2 dlls
< 4 dlls
Convenience
4 dlls +
Nielsen Retail index
33
THE DIFFERENCE A PESO MAKES
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10 pesos
≈ USD 80
cents
5 pesos
≈ USD 40
cents
5 pesos
34
TRADITIONAL STORES WILL REMAIN VERY
RELEVANT IN THE LONG TERM
907,000 Stores
Modern: 31,700
Modern
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Traditional
Price points
Small sizes
35
THE ASPIRATIONAL CONSUMER
DESPITE LOW-INCOME FAMILIES AND PRICE POINT
IMPORTANCE, MEXICAN CONSUMER IS ASPIRATIONAL
GROWTH RATE
VS ´13
CSDS MARKET LEADER
AMONG ALL SEL
+10.4%
10%
Luxury cars
+19.3%
30%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Smartphones
60%
+22% av. price
81% of Mexican consumers say quality is the most important factor in purchase (Global 78%)
Source: Nielsen Scanning and Universal Newspaper
37
AS LONG AS THE CONSUMER CAN FULFILL HIS
NEEDS HE WILL BE WILLING TO PAY MORE
Total Premium Basket
Total Basket NPC
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vs
5.2 %
8.7 %
Value Growth
Value Growth
Mexico is HIGHLY UNDERDEVELOPED on PRIVATE LABELS consumption in LatAm (+5% SOM)
RMS, Scanning - Sales Structure: //Premium basket: products 15% above average category
38
The value equation is key
for the Mexican consumer
FINAL THOUGHTS
“Global trends are shaping our reality now, but the winner in the market will be
the one who truly understands Mexico’s colorful society”
NEED
Affordability
Price points: Different disbursement alternatives
Availability
Multi-channel strategy: Modern and traditional trade are very different
Aspirational
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HOW
and have different consumer behaviors, so different strategies must be applied
Fulfill aspirational needs: Understand what consumers value in order
to move beyond tipping points
Engagement
Connect with Mexican consumers by understanding their cultural values
Value
Value propositions vary with socioeconomic levels – consider specific
Connectivity
Invest in digital – Mexican consumers are more connected every day
needs
40

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