2017 Consumer Products

Industry Outlook

Economy Economy
Economic fundamentals for consumer spending ... However, the election cycle has
appear to be solid going into 2017… created uncertainty

The labor market continues to strengthen Policies suggested

could support
consumer spending
Tax cuts Infrastructure
spending

Others could have

Jobs Disposable personal income Average hourly significant impacts on
181,000 +3.4% earnings
consumer spending
on average added year ending October starting to accelerate2
per month in 20161 Proposed trade Health care Housing
restrictions

Enabling technology Enabling technology

3 ways enabling technologies can CPG companies slow $0.56
benefit CPG companies to adapt to digital of every dollar spent
influenced by digital
interaction3
Perform Become Stay
faster granular connected
Digital ad spend (2016 estimates)

7 opportunities for CPG companies to embrace Economy Enabling

technology
Platforms Consumer
mindset

the potential of enabling technologies

CPG Retail Auto Financial
Services
Develop strategies Engage
to influencing the Exploit the consumers with
digital consumer Manage your potential of wearables and
purchase journey brand on the
Internet
social media
marketing
artificial
intelligence (AI)
8.7% 21.9% 12.7% 12.2%

Optimize online
retailing
capabilities
Adapt
communication
strategies to the
Explore methods to
customize products Platforms Continuing shift towards
online retailing
Online CPG sales
projection growth:
digital world
E-commerce sales
Create platforms specific to CP that... $36b
7.5% 8.4%
Customization
$8b
4.6%
42% 19%
of consumers interested willing to pay a 10
in technology to percent price Help resources and participants Become catalysts for Are closely linked to
customize products6 premium for them6 become accessible participants enabling technologies 20104 2015 3Q 2016 20135 2018
(est.)

Consumer mindset
Consumer trends influencing CPG companies Engage with influential consumer segments: By 2025, prepare for a shift to a global marketplace
Disrupting the consumer food value chain is an evolving Hispanics that’s heavily influenced by Asia Pacific.
set of drivers (% of US population)

nearly 10% of the

global population will be
6.5% 7.3%8 29% in Asian Pacific cities14
(448 million people)
1980 2014 2050
Health and wellness Safety Social impact Experience Transparency 7
(projected)9

Gen Z Asia
North America
and Europe
Truly digital natives11 Middle class in Asia is
More conservative and worry about the economy above anything else12 projected to have a higher vs
Consumer immersion in the digital world:
disposable income16
All age groups join the ranks of digital users. $18b $12b

Ages: 15-21 Approx. 25% of US population By 2020 they will account

(largest demographic segment) for 40% of US consumers10

Baby
Boomers Gen X Millennials Gen Z Women
Spend more on shopping In 2013 US women
7 of the top 10 global
trips, contributing about reported having control or cities by population will
60% of the total amount
17% 22% 30% 28% spent on shopping across
influence over $8t—73%
of a total household spend
be in Asia Pacific15
different store types of approximately $11.2t13

[1] Deloitte US Economic Forecast, 3rd Quarter, 2016 and US Government (from Haver Analytlics). Unless otherwise noted, all data supplied [5] The Digital Future: A Game Plan For Consumer Packaged Goods, GMA August 2014 [11] “5 tips for marketing to Gen Z,” The Huffington Post, July 2016
by Haver Analytics, which compiles statistics from the US Bureau of Labor Statistics, the Bureau of Economic Analysis, and other databases. [6] Deloitte, The 2015 American pantry study, June 2015 [12] http://www.inc.com/hayley-peterson/heres-what-you-need-to-know-about-generation-z.html
See www.haver.com/databaseprofiles” [7] Capitalizing on the shifting consumer value equation, Deloitte, January 2016 in collaboration with FMI and GMA. [13] “Buying Power: Women in the US,” New York: Catalyst, May 20, 2015
[2] Ibid [8] http://www.pewhispanic.org/2016/04/19/statistical-portrait-of-hispanics-in-the-united-states-key-charts/ [14] Ibid
[3] Deloitte, 2016 digital influence survey, July 2016. [9] Ibid [15] http://www.geohive.com/earth/cy_agg2025.aspx
[4] Source: Retail Indicators Branch, US Census Bureau [10] “5 tips for marketing to Gen Z,” The Huffington Post, July 2016 [16] United Nations Global Population Prospects, 2015 Revision, http://esa.un.org/unpd/wpp

www.deloitte.com/us/2017-CP-Industry-Outlook

Copyright © 2016 Deloitte Development LLC.