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Mintel Key Market Size Analysis

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Mintel Key Market Size Analysis MINTEL KEY MARKET SIZE ANALYSIS Mintel’s team of global analysts evaluate the markets of four key economies – Brazil, China, UK and US. Why? To provide you with an overview of consumer expenditure, market opportunities and hidden potential in key sectors around the world. BRAZIL • CHINA • UK • US MINTEL KEY MARKET SIZE ANALYSIS MINTEL KEY MARKET SIZE ANALYSIS IN-HOME FOOD Generally, the higher the standard of living, the lower FOODSERVICE* the proportion spent on life’s necessities: so in China – A NECESSITY BUT in-home food accounts for a fifth of expenditure (19.9%), – CULTURE MEETS ECONOMICS compared with less than 6% (5.6%) in the US. Given the WITH TRADING growth in consumer economies in Brazil and China, it UP POTENTIAL should follow that the share devoted to this area would be declining while in the US and UK it would be steady. However, while Brazil and the US conform to the model (the share of spend fell from 10.6% to 8.7% in Brazil and from 5.7% to 5.6% in the US between 2008 and 2013), the share devoted to food has remained quite steady in This sector naturally goes hand in hand with the in-home the price differential between getting take-out or a meal China and in the UK it rose. This is largely because the food market and there are a host of cultural, social and in a restaurant and eating at home is quite low. This increasing numbers of urban Chinese consumers have economic factors which determine its importance to contrasts with Britain where the costs are much higher been trading up to Western foods and products with household budgets. The US accounts for the largest share - the share is just 3.1% in the UK. In three countries the health benefits and an assurance of safety. The UK, which of spend (4.5%), as consumers eagerly return to dining foodservice share of expenditure has been steady, but in of the four countries is most reliant on food imports, has out on a regular basis, fueling rapid growth of the fast China it has fallen. Although the data refers to consumer been hit by global price increases and rising VAT on many casual segment. Thus, well-known, fast casual brands, expenditure only, excessive business spend reduction packaged products in a time when, for many households, such as Panera, Chipotle and Corner Bakery, continue has meant that full service restaurants have had to woo real incomes were falling. to lead with innovation and growth and are joined by a the consumer with price cuts. Additionally, they have had proliferation of “better” burger and quickly prepared pizza to compete with more rapidly growing fast food formats chains. The US is, of course, the birthplace of the giant where prices are lower. IN-HOME FOOD SHARE OF SPEND, 2008-13(%) global brands of McDonald’s and Subway. Furthermore, *(eating out and non-alcoholic drinks) 2008 6.1 10.6 5.7 20 2009 7.1 10.7 5.8 19.6 2010 7.2 9.9 5.8 19.7 2011 7.3 9.3 5.7 19.6 FOODSERVICE SHARE OF SPEND, 2013(%) 2012 7.4 9.0 5.6 19.5 2013 7.3 8.7 5.6 19.9 3.1 3.3 4.5 3.4 UK BRAZIL US CHINA UK BRAZIL US CHINA © 2014 Mintel© 2014 Group Ltd. All rights reserved. Confidential to Mintel. 2 3 MINTEL KEY MARKET SIZE ANALYSIS MINTEL KEY MARKET SIZE ANALYSIS NON-ALCOHOLIC DRINKS ALCOHOLIC DRINKS - FIZZ IN THE MARKET - PRODUCT MIXERS This sector accounts for around 1- 2% of the household As with the components of the main drinks within this budgets of all four countries. Carbonated soft drinks market, so there is wide diversity in how much consumers dominate the markets in Brazil, US and UK, while in are willing to spend on the products, ranging from 1.8% China bottled water is top, in part reflecting the fears in the US to 4.9% in China. The Chinese consumer over food safety and the standard of tap water. However, alcohol market more than doubled between 2008-12. whereas Brazilians devote 2% of expenditure on the Although it slowed in 2013 with more subdued economic area it is just 1.1% in the US. This is despite US per growth, drinking out of home remains popular among capita consumption being well over twice of that of Brazil urban consumers in China. Meanwhile, imported spirits and is largely due to the much higher prices per litre of NON-ALCOHOLIC DRINKS with premium prices are also appealing. While there is carbonated soft drinks in the latter. SHARE OF SPEND, 2013(%) some evidence that these may be past their peak, total per capita spirits consumption in China is still much higher than in the other countries, largely due to on-trade sales. The amount devoted to this area is also linked to cost. ALCOHOLIC DRINKS In the UK, where taxes are high, the difference between SHARE OF SPEND, 2008-13(%) 1.8 2.0 1.1 1.8 prices on- and off-trade are large. UK BRAZIL US CHINA UK BRAZIL US CHINA 2008 3.7 3.4 1.8 4.4 2009 3.9 3.3 1.9 4.5 2010 3.9 3.3 1.8 4.8 2011 4.0 3.3 1.8 4.9 2012 4.0 3.5 1.8 5.1 2013 3.9 3.6 1.8 4.9 © 2014 Mintel© 2014 Group Ltd. All rights reserved. Confidential to Mintel. 4 5 MINTEL KEY MARKET SIZE ANALYSIS MINTEL KEY MARKET SIZE ANALYSIS BEAUTY & PERSONAL CARE CLOTHING & ACCESSORIES - CHANGE IN THE MAKE-UP - THE PRICE OF FASHION On face value, the Brazilians live up to their body-beautiful Although this could be counted as an essential, there is a image, being one of the few markets where expenditure huge discretionary element in the market. It is true that the on bodycare products outweighs spend on facial skincare. share of spend is higher in Brazil and China than in the Overall, cosmetics and personal care accounts for 1.9% US and UK. Nevertheless, the trends across the countries of Brazil’s sales in 2013, compared with 1.6% in China, are at odds. Undoubtedly, the Chinese market is the 1.5% in the UK and a mere 1.2% in the US. While the most dynamic. This is an area where growth has reached most expansionary Brazilian categories are deodorants, beyond the major Eastern urban areas to lower tier cities shampoos and conditioners, the highest spend is on the and where online retail has been a major contributor to relatively expensive fragrances, making Brazil the largest spreading fashion across the country. Consequently, fragrance market in the world. In contrast, colour nine RMB in every 100 is spent on clothing, footwear and cosmetics comes fairly low down the list, whereas it is accessories, as opposed to just over US$4 out of every the top-selling category in the UK and the US. China, 100. Prices are very competitive, particularly in low-priced meanwhile, is notable for its devotion to facial skincare, accessories which have proved popular. This contrasts and it is by far the largest market for this category. with the UK where, after years of very low inflation, A clue to the comparatively overall low spend in the US is prices have soared in recent years, pushing up the share the fact that many prestige brands are available in mass of spend. This is going in the other direction in Brazil market retailers at competitive prices. (although the market is still recording healthy growth) where clothing prices have not risen as fast as other areas which have captured spend, such as housing. CLOTHING & ACCESSORIES SHARE OF SPEND, 2008-13(%) UK BRAZIL US CHINA 2008 5.1 8.0 4.2 7.7 2009 BEAUTY & PERSONAL CARE 5.8 7.4 4.1 7.5 SHARE OF SPEND, 2013(%) 2010 5.9 7.5 4.1 7.7 1.5 1.9 2011 UK BRAZIL 6.0 7.3 4.2 8.0 2012 6.1 7.1 4.2 8.6 1.2 1.6 2013 © 2014 Mintel© 2014 Group Ltd. All rights reserved. Confidential to Mintel. 6 US CHINA 6.0 6.8 4.2 9.0 7 MINTEL KEY MARKET SIZE ANALYSIS MINTEL KEY MARKET SIZE ANALYSIS OTC PHARMACEUTICALS HOUSEHOLD CARE - DIFFERENT WAYS OF - A CLEAN SWEEP TAKING THE MEDICINE ACROSS THE WORLD Given the diversity in healthcare provision and attitudes This is a small but stable part of consumer spend in to health and wellbeing across the four countries, it is not most countries. The exception is China where not only surprising to see the differences in importance placed does it have the greatest percentage of spend but it has on the area within the household budget. The Chinese been slowly growing (from 1.4% in 2008 to 1.8% in 2013). are proportionally the biggest spenders. Government A major part of this is the hardware associated funding only covers the most basic prescriptions and with with household chores, such as basic cleaning tools. increased health awareness and an ageing population, But as households become better equipped, so areas the market has prospered. Brazil, although counting for such as machine washing detergents and specific, often considerably less proportionally, still accounts for 2.6% proprietary, cleaners grow. as few medicines are provided free of charge. This contrasts sharply with the UK, where a minute 0.3% is devoted to the area.
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