Anticipating Inflation in Asia

2022 & Beyond

Worldpanel Asia

Windy Anggayasti
Kacey Lim
Jake Chua
Nadine Narciso

March 2022
We want to thank our key industry
experts for their contribution

Felicia Julian Kyle Artz Nirupama Kannan Alpana Titus

Marketing Director Frisian Flag Vice President of Strategy, Head of Category Leadership, Vice President for Foods &
Indonesia, FrieslandCampina Greater Chinese Mainland & Mars Wrigley Asia Refreshment - Unilever SEAT
Mongolia Operating Unit, The
Coca-Cola Company

2
What Now: Highest mobility increase with shoppers returning to workplaces and visiting
grocery stores; Time spent at home also relatively lower now compared to previous years.

Google Mobility Trends, 17th Feb 2020 – 17th March 2022

Residential Workplaces Grocery & Pharmacy Stores

80 80 80 Malaysia
Indonesia
60 60 60
Thailand
40 40 40 Philippines
Vietnam
20 20 20
Korea

0 0 0
Taiwan
India
-20 -20 -20

-40 -40 -40

-60 -60 -60

-80 -80 -80

Source: Google COVID-19 Community Mobility Trends – Last updates 17 March 2022 3
Consumers are generally more confident now vs. a year ago being adapted to the new realities
coupled with the increased mobility. However, sentiment level of some markets have fallen
slightly in latest quarter potentially driven by growing concerns over rising prices.
ASIA – Consumer Confidence Index (100 indicates neutrality)

2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4

160

140

120 119
120 113
104
99
100

80 73 76

60
46
40

20

0
Chinese Mainland Korea Taiwan Indonesia Malaysia Thailand Philippines Vietnam

4
Inflation fears
creeping in as prices
and cost of living are
expected to go up.

5
Average price increase seen across most markets with volume slowdown; whilst shoppers in
Chinese Mainland, Indonesia and Philippines potentially switching to cheaper products.

ASIA – Take Home FMCG Growth Rates FY 2021 v. YA

Average Pack Size Average Price in KG/L Volume

North Asia Southeast Asia

Chinese Mainland South Korea Taiwan Indonesia Thailand Pen. Malaysia Philippines Vietnam (U) Vietnam (R) India

8.0%

7.0%
6.7%
5.4%

5.3%

4.5%

4.1%
4.1%

3.7%
2.9%
2.9%

2.6%

1.7%

1.2%

1.2%
1.0%
0.8%

0.8%
0.6%

0.2%

0.1%
-0.2%

-0.8%
-0.9%

-1.6%

-2.5%
-2.7%
-4.3%

-5.2%

-8.3%
7
SEA markets forecasted with steady FMCG growth despite price increase as likely due to the
opening of local economy. Chinese Mainland market forecasted to be ‘soft’ in Q2 before
rebounding in Q3.
SEA – Take Home FMCG Quarterly Growth Chinese Mainland – Take Home FMCG Quarterly Growth

Lockdown stay at Vaccination roll out + Endemic and inflation Lockdown in Q1 Vaccination roll out Inflation
home in most markets restriction relaxation
12%
12%
10%
10%
8%
8%
6%
6%
4%
4%

2%
2%

0%
0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-2%
-2%

-4% -4%

-6% -6% Actual

Price change as is
-8% -8%
Price slightly increased
Price increased

8
What we will cover

How exposed am
I to pressured
shoppers?

How will my
shoppers react What could be my
when prices silver linings that
increase? lead to growth?

9
What will happen
when prices
increase?

10
Post-pandemic shopping behavior continues.
How will it change when inflation hits?
ASIA – Take Home FMCG Growth Rates of Average Shopping Trips v. Basket Size

Spend per trip Occasions Total Growth

Chinese
Korea Taiwan Indonesia Thailand Pen. Malaysia Philippines Vietnam (U) Vietnam (R) India
15% Mainland

10%

5%

0%

-5%

-10%

-15%
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021

North Asia Southeast Asia

11
Different strategies or levers shoppers can use to save money.

Shopper behaviour of a category/sector in times of uncertainty

Repeat buyer behaviour New/ Lost Buyers

Drop or enter a
Buy less/ more volume Switch channels Buy cheaper products category

Increase/ reduce
overall category Increase/ reduce Increase/Reduce Switching brands, non Product Mix
volume bought repertoire of segment Promotional reliance branded, PL (sectors, pack sizes)

12
 12 w/e 2019/03/24
12 w/e 2019/04/21

68.9

23.8
42.1
31.9
89.6
12 w/e 2019/05/19

Forecasted
12 w/e 2019/06/16

Actual trend
12 w/e 2019/07/14
12 w/e 2019/08/11
12 w/e 2019/09/08
12 w/e 2019/10/06
12 w/e 2019/11/03
12 w/e 2019/12/01
12 w/e 2019/12/29
12 w/e 2020/01/26
Thailand

12 w/e 2020/02/23
Thailand F

12 w/e 2020/03/22
Increase/ reduce overall category volume bought

12 w/e 2020/04/19
12 w/e 2020/05/17
especially with price increase.

12 w/e 2020/06/14
12 w/e FMCG Actual and Forecasted Frequency

12 w/e 2020/07/12
12 w/e 2020/08/16
12 w/e 2020/09/13
12 w/e 2020/10/11
12 w/e 2020/11/08
Indonesia
Indonesia F

12 w/e 2020/12/06
12 w/e 2021/01/03
12 w/e 2021/01/31
12 w/e 2021/02/28
12 w/e 2021/03/28
12 w/e 2021/04/25
12 w/e 2021/05/23
12 w/e 2021/06/20
12 w/e 2021/07/18
Malaysia
Malaysia F

12 w/e 2021/08/15
12 w/e 2021/09/12
12 w/e 2021/10/10
12 w/e 2021/11/07
12 w/e 2021/12/05
12 w/e 2022/01/02
Forecast 1
Forecast 2
Forecast 3
Phillipines

Forecast 4
Phillipines F

Forecast 5
Forecast 6
Forecast 7
Forecast 8
Forecast 9
Forecast 10
Forecast 11
Forecast 12
Forecast 13
Frequency in most SEA markets are unlikely to recover to pre-COVID level anytime soon,

Vietnam (U)

Forecast 14
Vietnam (U) F

Forecast 15
67.7

20.3
25.5
35.4
68.9

13
WHAT ABOUT OUT OF HOME?
During the pandemic, there is a higher incidence of
planned shopping trips thereby limiting impulse purchases
in-store. Shoppers are focused on shopping with a pre-
planned list of items to purchase and hence there is less
browsing and top ups to their purchases. On-the go
consumption has also reduced hence usage occasions
have changed and this has impacted the category
performance.
Nirupama Kannan ,
Head of Category Leadership, Mars Wrigley Asia

14
Increase/ reduce overall category volume bought

Hence protecting and winning each trip will be key as shoppers continue to maximize

VIETNAM
each shopping trip.
Vietnam (U) – Take Home FMCG Growth Rates FY2021 v. YA
40%

52% of categories in Growth :

30% ΔSpend per trip > ΔNumber of trips
Change in Spend per trip

20%

10%

0%

11% of categories in Growth :

-10%
38% of ΔNumber of trips > ΔSpend per trip
categories
in decline
-20%
-40% -30% -20% -10% 0% 10% 20% 30% 40%

Change in Number of trips Each Dot is an CPG Category

(267 int total covering all grocery and toiletries)

15
Increase/ reduce overall category volume bought

How brands have successfully drive growth whilst addressing frequency challenge.

VIETNAM VIETNAM INDONESIA

1. Create new usage / occasions 2. Drive heavier baskets 3. Deliver experience

New launch from ORION C’est
Bon strongly emphasize on the
‘Convenient Meal & Breakfast’
message to create new usage
occasion for the category
which mainly serves for
snacking occasions
CHINSU launched 7-days
breakfast package with
different types of noodle and
flavors
TEA+ launched 1L multi-serve
pack to capture In-Home
consumption
KOKOMI launched bigger
pack 90gr on top of their 65gr
/ 75gr SKUs
Nescafe Can released it’s Nescafe
Ala Café variants with the unique
selling point of bringing the café
experience wherever you are. With
the limitation of brand activation
during pandemic, they launched a
virtual concert targeting the audience
of Young Adults.

Contributes
+8% +65% +6.4 PTS 72% +570K
incremental occasions for spend growth in P6M and penetration in less than a households within 7 months of
the category in P1Y help drive brand recovery year of launch (since March volume uplift in the past 2 launch.
2021) years

16
FOOD FOR THOUGHT

Giving consumers the right

reason to buy/consume is key to
continue being part of their basket;
not only during usage but also
total experience.
Felicia Julian,
Marketing Director at Frisian Flag Indonesia

17
Increase/ reduce repertoire of sectors

Potential for more collaborations of adjacent categories as shoppers are also optimizing each
trip by picking up more categories.

FY 2020 FY 2021
North Asia Southeast Asia
Average #
4% 4%
categories
bought per 2% 2% 2%
1% 1%
year 1%
0% 0% 0% 0%

0%
-1% -1% -1%
-2% -2% -2%
-2%

9%
Average #
categories 4% 5% 4% 5%
4%
bought per 1% 2% 2% 1% 2% 1%
0% 1%
trip

-1% 0%
-3% -3%
-4%
-7%
Chinese Korea Taiwan Indonesia Pen. Malaysia Thailand Philippines Vietnam (U) Vietnam (R) India
Mainland

18
Product Mix (sectors, pack sizes)

MAINLAND
In China, we saw shoppers responded to inflation mostly by trading down on product

CHINESE
choice – where do you think your category or brand stands?

Chinese Mainland % Contribution to FMCG Household Spending 12 w/e Trended % Product Choice Contribution
Change – 12 w/e Dec 2021
Shopper Responses to Price Inflation
5.0%
+5.8% -1.1% 3.5%
3.4%
-7.1%
+0.1%

-0.2%
+1.9%

-2.8%
-3.3% -3.0%
-0.4% -4.5%

Inflation HH Volume Store Choice Promotion Product HH Spend -6.7% -6.7%

-7.1%
Change Choice Choice Change -7.6%
Overall like-for- Shoppers are Shoppers are Less promotion Shoppers are Shoppers are
like price increase buying a more buying in less events or lower choosing a less spending slightly
for existing SKUs FMCG categories premium stores / discount expensive less on FMCG vs -9.8%
and / or a higher channels product last year
volume within
certain categories 21P1 21P2 21P3 21P4 21P5 21P6 21P7 21P8 21P9 21P10 21P11 21P12 21P13

Source: FMCG Household Panel China National Urban 12 Weeks Rolling 19

Product Mix (sectors, pack sizes)

Shoppers are exposed to different trajectory of price changes that are often polarized even
within the category.
Take Home FMCG Average Price Growth 12 w/e Dec 2021 v. YA

CHINESE
MAINLAND VIETNAM
25% 40%
Sugar
Coffee
20%
30%
15%

10% 20%

5%
10%
0%

-5% 0%

-10% Wet Tissues

-10%
-15%

Baby Wipe
-20% -20%

20
Food For Thought: Winning brands continue to invest even in
times of high inflation
Despite the significant levels of price inflation in 2008, brands that gained
share invested much more than losing brands in new products.

GLOBAL – Winning v. Losing share brands (2011 v. 2008)

Number of
new products
35%
more

Innovations %
contribution to brand
48%
higher

Renovations %
contribution to brand
25%
higher

Source: BG20 2700 brands in 8 countries (Austria, Belgium, Denmark, France, Netherlands, Spain, Sweden, UK)
Innovation = new brands/sub-brands; Renovation = new sizes, types, varieties
21
FOOD FOR THOUGHT

Sometimes changing consumer

dynamics and inflationary
pressures force us to be our most
innovative.
Alpana Titus ,
Vice President for Foods & Refreshment at Unilever SEAT

22
Switching to PL

Stronger presence and performance of Private Label in high Modern Trade and high ‘trust’
markets. Notable growth in Chinese Mainland partly driven by the emergence of O2O model.
ASIA – Take Home FMCG Private Labels % Spend Contribution and Change

Total Private Labels Spend Change +2.5 Mio +16 Mio -21 Mio -1 Mio 39 K +235 Mio -4 Mio
(USD) – FY 2021 vs. 2020

3.4% 3.5%

3.0%
2.6%
2019 2.1%
2020
1.9%
2021

0.8% 0.7%
0.6% 0.6%
0.5%
0.3% 0.2% 0.2%

Taiwan Korea Pen. Malaysia Thailand Vietnam Urban Chinese Mainland Philippines

Private Labels
Penetration % - FY2021
81% 87% 75% 36% 46% 36% 21%

23
Switching to PL

MAINLAND
Private Label is not always about being cheaper. Development of O2O, premiumization

CHINESE
and new categories/innovations help to accelerate Private Label growth in Chinese
Mainland.
Chinese Mainland – Take Home FMCG 52 w/e Trended Private Label Spend Growth and Price Index

8E+09
Price Index v. Branded Spend Price Index 100

140%
17%
O2O FMCG Sales Incrementality
7E+09 4 types of O2O platforms and major players
120%

6E+09 101%
100% Horizontal marketplaces Vertical grocery

Price Index v. Branded

serving retailers & Ecommerce apps with
Spend Growth

5E+09 79% brands with O2O self-owned stores and

80% distribution capabilities delivery capabilities
4E+09
60%
3E+09

40%
2E+09
Offline retailers offering Community-based
1E+09 20% O2O services via self- group buy platforms
owned or 3rd party with ‘community
0 0%
delivery capabilities captains’ coordinating
order, delivery and
52 w/e 2020/04/17

52 w/e 2021/08/13
52 w/e 2019/12/27

52 w/e 2020/01/24

52 w/e 2020/02/21

52 w/e 2020/03/20

52 w/e 2020/05/15

52 w/e 2020/06/12

52 w/e 2020/07/10

52 w/e 2020/08/14

52 w/e 2020/09/11

52 w/e 2020/10/09

52 w/e 2020/11/06

52 w/e 2020/12/04

52 w/e 2021/01/01

52 w/e 2021/01/29

52 w/e 2021/02/26

52 w/e 2021/03/26

52 w/e 2021/04/23

52 w/e 2021/05/21

52 w/e 2021/06/18

52 w/e 2021/07/16

52 w/e 2021/09/10

52 w/e 2021/10/08

52 w/e 2021/11/05

52 w/e 2021/12/03

52 w/e 2021/12/31
offline pick-up points

24
FOOD FOR THOUGHT

Brands need to create the right

balance between value and price.
Because affordable not always
mean ‘economical’, yet the ability to
justify the value it offers with its price.
Felicia Julian,
Marketing Director at Frisian Flag Indonesia

25
Switching to PL

MAINLAND
Private Label is now expanding beyond personal and home care categories.

CHINESE
Chinese Mainland – Take Home FMCG Private Label Spend Growth

Fast growing PL categories Bubble: FY2021 Penetration %

180%

KITCHEN ROLLS

CHINESE PASTRY PACKAGE WATER

130% GENERAL CANDY
Spend Growth – FY 2021 v. 2020

BISCUIT JUICE
LIQUID MILK
80%
YOGURT
ALCOHOLIC
COOKING OIL SAUSAGE
SESAME OIL
30% SOY SAUCE
DISH WASH
FROZEN FOOD
WET TISSUES
HAND WASH
BREAD
-20%

H&S (HERB & SPICE)

-70%
-100% -50% 0% 50% 100% 150% 200% 250% 300% 350% 400%

Spend Growth – FY 2020 v. 2019

26
Understanding innovations and their impact

Brand innovations Private Labels innovations

Economy PL

Impact on
introductions

Brands
Hurt each other rarely hurt brands

Standard &
Private Labels
Premium PL
Impact on

Only top brand introductions

can hurt PL hurt other PL

27
 x 10000000

-
1,200
1,400
1,600
1,800
2,000

1,000

200
400
600
800
12 w/e 2019/12/29

NA
12 w/e 2020/01/26
Switch channels

12 w/e 2020/02/23

12 w/e 2020/03/22

SEA
12 w/e 2020/04/19

12 w/e 2020/05/17

12 w/e 2020/06/14

12 w/e 2020/07/12
depend on category.

12 w/e 2020/08/16

12 w/e 2020/09/13

12 w/e 2020/10/11

12 w/e 2020/11/08

12 w/e 2020/12/06

12 w/e 2021/01/03

12 w/e 2021/01/31

12 w/e 2021/02/28
EC Emerging SEA (MY, VN U, TH)

12 w/e 2021/03/28

12 w/e 2021/04/25

12 w/e 2021/05/23

12 w/e 2021/06/20

12 w/e 2021/07/18

12 w/e 2021/08/15

12 w/e 2021/09/12

12 w/e 2021/10/10

12 w/e 2021/11/07

12 w/e 2021/12/05

12 w/e 2022/01/02
-
EC Developing SEA (ID, VN R, PH)

10
20
40
50
60

30
ASIA – Take Home FMCG 12 w/e Trended Ecommerce Spend (USD)

x 10000000
0
5
10
15
20
25

4 w/e 2019/01/27
4 w/e 2019/02/24
4 w/e 2019/03/24
4 w/e 2019/04/21
4 w/e 2019/05/19
Penetration

4 w/e 2019/06/16
Vietnam (U)

4 w/e 2019/07/14
4 w/e 2019/08/11
4 w/e 2019/09/08
4 w/e 2019/10/06
4 w/e 2019/11/03
4 w/e 2019/12/01
4 w/e 2019/12/29
4 w/e 2020/01/26
Pen. Malaysia

4 w/e 2020/02/23
4 w/e 2020/03/22
4 w/e 2020/04/19
4 w/e 2020/05/17
offers will need to be differentiated in order to drive incremental reach.

4 w/e 2020/06/14
4 w/e 2020/07/12
Thailand

4 w/e 2020/08/16
4 w/e 2020/09/13
4 w/e 2020/10/11
4 w/e 2020/11/08
4 w/e 2020/12/06
4 w/e 2021/01/03
4 w/e 2021/01/31
4 w/e 2021/02/28
4 w/e 2021/03/28
4 w/e 2021/04/25
4 w/e 2021/05/23
4 w/e 2021/06/20
4 w/e 2021/07/18
4 w/e 2021/08/15
4 w/e 2021/09/12
4 w/e 2021/10/10
For North Asia markets where Ecommerce is more established and routinized, the return back to offline will

4 w/e 2021/11/07
4 w/e 2021/12/05
Early sign of Ecommerce slowing down in SEA. As shopper mobility increases, Ecommerce

4 w/e 2022/01/02
EC Emerging SEA – Take Home FMCG4 w/e Trended Ecommerce

28
 x 10000000

-
1,000
1,200
1,400

200
400
600
800
12 w/e 2019/12/29

12 w/e 2020/01/26
Switch channels

12 w/e 2020/02/23

12 w/e 2020/03/22

12 w/e 2020/04/19

12 w/e 2020/05/17

12 w/e 2020/06/14

12 w/e 2020/07/12

12 w/e 2020/08/16

12 w/e 2020/09/13

12 w/e 2020/10/11

12 w/e 2020/11/08

12 w/e 2020/12/06

12 w/e 2021/01/03

12 w/e 2021/01/31

12 w/e 2021/02/28

12 w/e 2021/03/28

12 w/e 2021/04/25

12 w/e 2021/05/23

12 w/e 2021/06/20

12 w/e 2021/07/18

12 w/e 2021/08/15

12 w/e 2021/09/12

12 w/e 2021/10/10

12 w/e 2021/11/07
SEA – Take Home FMCG 12 w/e Trended Proximity Spend (USD)

12 w/e 2021/12/05

12 w/e 2022/01/02

x 10000000
0
10
20
30
40
50
60

12 w/e 2019/12/29

12 w/e 2020/01/26

12 w/e 2020/02/23

12 w/e 2020/03/22

12 w/e 2020/04/19

12 w/e 2020/05/17

12 w/e 2020/06/14

12 w/e 2020/07/12

12 w/e 2020/08/16

12 w/e 2020/09/13
promotion mechanisms will be important to drive more traffic in MT.

12 w/e 2020/10/11

12 w/e 2020/11/08

12 w/e 2020/12/06

12 w/e 2021/01/03

12 w/e 2021/01/31

12 w/e 2021/02/28

12 w/e 2021/03/28

12 w/e 2021/04/25
whilst trips in Hypers Supers are recovering slow, therefore the right pricing and

12 w/e 2021/05/23

12 w/e 2021/06/20

12 w/e 2021/07/18

12 w/e 2021/08/15

12 w/e 2021/09/12

12 w/e 2021/10/10

12 w/e 2021/11/07
Shoppers likely to continue value Proximity channels for convenience and cheaper prices;

12 w/e 2021/12/05

12 w/e 2022/01/02
SEA – Take Home FMCG 12 w/e Trended Hypers + Supers Occasions

29
FOOD FOR THOUGHT

We need to think differently about

how we balance our investments
across channels and across the
portfolio.
Kyle Artz
Vice President of Strategy, Greater Chinese Mainland & Mongolia
Operating Unit, The Coca-Cola Company

30
FOOD FOR THOUGHT

In terms of channel shift, online shopping which has

gained significant penetration in the past two years will
continue to play a prominent role in driving FMCG
growth. This growing visibility and convenience of
the online vs. in-store value proposition, has
pushed the in-store channels to become more
competitive in terms of pricing/promo to increase
store traffic and footfalls.
Alpana Titus ,
Vice President for Foods & Refreshment at Unilever SEAT

31
Increase/Reduce Promotional reliance

Promotions recovery mainly driven by Ecommerce, except in Malaysia where it’s highly
Modern Trade skewed. Shoppers are also expected to seek out for more value when they are
under pressure with prices increase.
ASIA – Take Home FMCG % Promotion Contribution and CAGR

Promotion Spend CAGR +5% +3.6% +5.2% -2.5% +1.0% +2.3% +9.5% -16.3%
FY2019 - FY2021

40%
37% 36% 37%

28%
25%
2019 23% 23%
2020
19% 19%
2021

6% 5% 5%
4% 3% 2%

Taiwan Korea Chinese Mainland Pen. Malaysia Thailand Vietnam (U) Indonesia Philippines

32
Increase/Reduce Promotional reliance

Promotions help to generate more spend and trips hence how to drive it effectively

KOREA
will be key.
South Korea – Take Home FMCG in Modern Trade South Korea – Take Home FMCG in Modern Trade
Category Spend Growth v. Spend Growth on Promotion Category Occasions Growth v. Occasions Growth on Promotion

80 80
71% 72%
of growing categories have of categories increasing trips
60 more spend on promotion 60
have more trips on promotion

Promotion Occasions Growth %

40 40
Promotion Spend Growth %

20 20

0 0

-20 -20

-40 -40

-60 -60

-80 -80
-60 -40 -20 0 20 40 60 -60 -50 -40 -30 -20 -10 0 10 20 30 40
Total Occasions Growth %
Total Spend Growth %

33
Increase/Reduce Promotional reliance

PEN. MALAYSIA
Promotions will need to play a different role by categories and their respective
growth trajectories. Important to ensure promotions are delivering incrementality.
Peninsular Malaysia – % Take Home FMCG in Modern Trade

41% 57% 14% 4%

100.0
On Promotion %
90.0
Off Promotion %
80.0
% Categories
increasing
70.0
volume on 64.8
promotion 72.0 74.2
81.2 60.0

50.0

24.4% 40.0

30.0
Total FMCG Promotion %

20.0
35.2
28.0 25.8
18.8 10.0

0.0
Growth in 2020 & 2021 Decline in 2020 & Growth in 2021 Growth in 2020 & Decline in 2021 Decline in 2020 & 2021

34
FOOD FOR THOUGHT

Focusing only on Quality promotions that

drives mutual benefits for retailers,
manufacturers and shoppers will be a
critical unlocker of value for the category
Nirupama Kannan ,
Head of Category Leadership, Mars Wrigley Asia

35
Driving growth by maximizing Incremental and minimizing Drag effects of Promotions.

Understand the roles of

Promotion for your category
and shoppers (How promo
sensitive and which cohorts

INCREMENTAL
/ channels are driving that?)

Leveraging promotion levers

to drive incremental growth Extra trips Expansion Steal
(depth of discount, length of
promotion, mechanics, etc.)
DRAG

Cannibalize Displace Subsidize

36
Shoppers will react in different ways in order to cope with prices increase.

Shopper behaviour of a category/sector in times of uncertainty

Repeat buyer behaviour New/ Lost Buyers

Drop or enter a
Buy less/ more volume Switch channels Buy cheaper products category

Increase/ reduce
overall category Increase/ reduce Increase/Reduce Switching brands, non Product Mix
volume bought repertoire of segment Promotional reliance branded, PL (sectors, pack sizes)

37
How exposed am
I to Pressured
shoppers

38
Greater risks of inflation in markets with larger composition of low income households,
who would not have much capacity to increase spending in lieu of price increase.

ASIA – Take Home FMCG Cash Outlay (USD) of Low Income Households
FY2020 FY2021

87%
51%
34%
% Low Income 13.7
Population 12.111.6 12.7

9.2
8.3
6.56.8

3.6 3.9
1.9 1.8 2.3 2.6 2.4 2.8
1.0 1.1 1.11.1

Indonesia India Philippines Thailand Vietnam (R) Vietnam (U) Pen. Malaysia Korea Chinese Mainland Taiwan

39
FOOD FOR THOUGHT

We continue to have plenty of

opportunity in mix-driven revenue
growth. It remains a key pillar of
our growth strategy.
Kyle Artz
Vice President of Strategy, Greater Chinese Mainland & Mongolia
Operating Unit, The Coca-Cola Company

40
 PHILIPPINES
In pressured times, lower SEC households are rationalizing spend by cutting back
category repertoires. Ensuring category relevance by addressing affordability will
be key.
Philippines – % Take Home FMCG by SEC cohorts

CAGR
FY2019 - FY2021 -3.8% -4.1% -3.3% -0.7%

Decline in 2020 & 2021

39% 32%
51% 48%
Growth in 2020 & Decline in 2021

13%
41%
Decline in 2020 & Growth in 2021 14% 16%
33%
22% 24% 14%
Growth in 2020 & 2021
12% 12% 15% 13%
National Philippines Low SEC Mid SEC High SEC
(83%) (13%) (4%)

Average number of categories

bought (2019 ➔ 2021) 54 ➔ 52 63 ➔ 60 65 ➔ 66

41
 PHILIPPINES
Four clusters of categories observed in Philippines that could evolve differently
with inflation in 2022 onwards.

Philippines – Take Home FMCG % Spend of Low Income HH vs. Spend Growth FY2021 v. YA
100%
High de-consumption risk Risk of downtrading
95%
Floor Cleaner/Wax
Baby Food
Talcum/ Baby Powder
Baby Diaper Salt Vinegar
90% Laundry Bar Shampoo
Instant Noodles
Spend contribution of Low-income HH

Soy Sauce Alcohol

Infant Milk/Formul Sugar/Other Sweeten. Instant Coffee Powd Gum Hair Treatment
MSG/ Vetsin
Gelation Bar Bath Soap Oil Meal Flavorings
Cologne/Perfume Hard Candy Family/Adult Milk Nail Polish
85% Deodorant
Can./Bot./Foil.
Laundry Fish
Powder Powder Juice Cooking Oil
Toner/Astr./Exfo. Toothpaste
Breads Corn Snacks
Instant
LotionCreamer Cereal Bev.
Cotton Softdrink Soft Candy
Coffee Total Biscuits/Crack
Baby Peanut
Wipes/Wet
Hair Powder Butter
Tiss
Choco Water
Conditioner Sinigang Mix
Face Cream/Moist. Bottled/Packd
Catsup Fabric Softener Nuts
Lip Cosmetics Total Razors PastaFlour/Baking Soda/et Rub.Alcohol/Hand San Bleach
Potato Snacks
80% Growing-Up Milk Condensed Milk SanPro/Feminine Care Fish SauceDeep Fry Coating Dishwash Ice Cream Soy Milk
Toothbrush Margarine
Evaporated Milk Marshmallow
Ground Coffee Pasta Sauce Can./Foil./P. Meat
Liquid Body SoapTomato Sauce Liquid/ RTD Tea Oyster Sauce
Chocolate All PurposeLechon Bouillon(Cube/Pwd/Li
Liquid/ RTD ChocoTotal Pest Cream Sauce
Scouring Pads Tomato Paste
75% Control
Mayonnaise/Salad Powder Tea
Dr. Products CulturdMi/ProbiotcD
Cheese Spread Cheese Gummy Candy
Face Wash Tea Bags/Loose Leaf
Can./Pack. Fruit/Veg Sandwich/Liver Spr. RTD Sports/Energy D
Liquid Juice Yoghurt
Hair Colorant SweetChili/HotSauc
Jam/ Fruit Spread Toilet Bowl Cleaner
70%
Face Cosmetics Pet Food Adult Diaper
Meal Mixes Oatmeal
Soup/ Rice Soup
Hair Styling RTE Breakf. Cereal Liquid Milk
65% Liquid Seasoning
Facial Tissue Toilet Tissue
Liquid Hand Soap Hand/ Kitchen Towel
60% Table Napkins
Mouthwash
Liquid Detergent
Multipurpose Clean. Air Freshener

55% Butter
RTD Coffee

Moderate de-consumption risk Moderate downtrading risk

50%
-60% -40% -20% 0% 20% 40% 60%
Spend growth

42
 PHILIPPINES
There are still mainstream brands in the country that delivers
double digit growth by delivering value.

Wings Powder MaxGlow Payless

+29% spend +20% spend +15% spend
MAT P13 21 vs YA MAT P10 21 vs YA MAT P13 21 vs YA

109
Low SEC index
102
Low SEC index
102
Low SEC index

43
FOOD FOR THOUGHT
Affordability is key and is defined by who and
where. For example, Traditional trade reaches the
lower SEC and hence affordability is about
having the right opening price point. Whereas in
Modern Trade affordability is in leveraging the
right price and pack architecture to facilitate
shopper recruitment.
Nirupama Kannan ,
Head of Category Leadership, Mars Wrigley Asia

44
Silver linings with
single households?
Small Households are growing to be an important group of shoppers especially in more
developed markets

ASIA – % Population and Spend Contribution of Small (1 – 2 Members) Households

Population % Spend Contrubition

47%
44%
41%
36%
31% 33%
30% 28% 27%
25%
23%
21%
17% 16% 16%
15%
12%
9%

Chinese Mainland Thailand Korea Pen. Malaysia* Vietnam Rural Taiwan Indonesia Vietnam Urban Philippines

Population Contribution
Change -1.7% +3.0% +0.1% -1.5% +1.3% +3.4% -0.1% +1.2% +5.0%
(2021 vs 2019)

*Malaysia data represents 1-3 Member HHs 46

Younger small HHs population is growing, and they are less likely to be exposed to financial
or inflationary pressures.

Chinese Mainland – 52 Take Home FMCG - 52 w/e Thailand – Take Home FMCG - 52 w/e

53% 17%
13%
Spend Growth 27% Spend Growth
(2021 v. 2020) (2021 v. 2020)
3% 6% 5% 10% 3% 3% 4%
Spend per Spend per
Buyer Growth Buyer Growth
(2021 v. 2019)
-4% -9% (2021 v. 2019) -1%
-4% -4%
T. National Younger Older 3+ Households
Singles/Couples Singles/Couples

T. National Younger Older 3+ Households

Singles/Couples Singles/Couples

3 4
Population % 2 Population %
Change in pts Change in pts
(2021 v. 2019) (2021 v. 2019) -1 -3
-3

47
Young Single/Couple households have a higher tendency for categories related to
convenience, pampering or indulgence

Chinese Mainland – Categories that Young Single/Couple Thailand – Categories that Young Single/Couple Households tend
Households tend to buy vs 3+ Households to buy vs 3+ Households

Highest Tendency Lowest Tendency Highest Tendency Lowest Tendency

Nail makeup Infant milk powder Eye moisturiser Infant milk powder

Female hair remover Baby diapers Toner Baby diapers

Mouthwash Chinese spirit/saki Salad dressing Cereal

Tampons Leather care product Wipeoff cleanser Stire fried sauce

Napkin Cheese Haircare treatment Multipurpose cleaner

Rtd coffee Adult milk powder Cereal milk Rice cracker

Eye makeup Hair colourant Alco pops Popcorn

Fragrance Battery Butter Rtd tonic food drinks

Deodorants Msg Body colonge Coffee creamer

Butter Ketchup Pantyliner Seaweed

Foreign spirit Oyster sauce Air freshener Jok

48
Young Single/Couple households are also more skewed to MT and Ecommerce and are equally,
if not more sensitive to promotions

Chinese Mainland Thailand

MT Contribution Ecommerce Contribution % Spend on Promo MT Contribution Ecommerce Contribution % Spend on Promo

100% 30 100% 30
25 25 26 26
90% 90%
23
25 25
80% 80%
19 18
70% 70%
20 17 20
60% 60% 55%
50% 45% 47% 45% 15 50% 45% 44% 15
43%
39%
40% 33% 40%
27% 28% 10 10
30% 30%
22%
20% 20%
5 5
10% 10% 4% 7% 4%
3%
0% - 0% -
Total National Younger Older Singles/Couples 3+ Households Total National Younger Older Singles/Couples 3+ Households
Singles/Couples Singles/Couples
Penetration% Penetration%

Modern Trade 98.6 99.2 97.8 98.8 Modern Trade 93.5 97.3 88.6 93.7

Ecommerce 89 90.1 85.5 90.3 Ecommerce 32.8 40.8 21.1 33.8

49
FOOD FOR THOUGHT

Innovation will continue to be the

name of the game – How do we
bring excitement to build
lifetime value.
Kyle Artz
Vice President of Strategy, Greater Chinese Mainland & Mongolia
Operating Unit, The Coca-Cola Company

50
What Next

51
SO.. HOW CAN BRANDS CONTINUE TO WIN SHOPPERS IN
CHALLENGING TIMES?

Brands can continue to win shoppers despite

inflation by justifying their value, continuing
to drive penetration and trial through
sustained mental and physical availability
and by driving consumption through reinforcing
brand relevance to the specific consumer
need or occasion.
Alpana Titus ,
Vice President for Foods & Refreshment at Unilever SEAT

52
What to Expect and How to Anticipate Inflation?
What to Expect? Key Take Out

Protecting and winning each trip will continue to be key –

Shopping frequency unlikely to return to pre-covid
Create new usage/occasion, drive heavier basket,
levels
delivering experience and work with adjacent category
Shoppers tend to switch to affordable products, but
Identify how price changes will affect your category
each categories are exposed to different price
growth and what will be the key drivers for growth/decline
change trajectory

Private Label could be an appealing choice during

pressured times and it is evolving – No longer just Monitor performance of the Private Label brand in your
about being cheaper and is expanding beyond category, make sure that it stays within your radar
Personal Care and Home Care

Proximity channel remains important; Ecommerce Beyond availability, making sure you have the right offer
continue to grow but likely at a slower rate in SEA in the right place to optimize shoppers’ basket; Also time
EC emerging markets as mobility increases to differentiate offers on EC to drive incrementality

Promotions is recovering and we are expecting

Driving growth by maximizing "incrementality” and
shoppers to seek out for more value with prices
minimizing “detrimental” effects of Promotions
increase

Low income cohort are rationalizing spend by Ensure your category relevance by understanding what
cutting back category repertoire affordability means to them and addressing it

Single HHs are emerging, throughout challenging Engage with this cohort with the right product, pack and
times they are still growing their spend price. Potential space for innovations?

53
Implication
SHOPPERS
will continue to cut back on frequency
whilst maximizing basket spend per
trip, therefore shopping missions could
be well planned prior to trip in store.
This will continue to benefit the big or
trusted brands hence communication
above the line as well as visibility in-
store need to be dialled up.
How will shoppers needs and behavior
change in the future?
ECOMMERCE
movement seems to be correlated to
mobility restrictions therefore
understanding the key drivers and
motivations will be important for brands
to win in the online space.
What are people looking for when they
shop online (Planning / needs /
benefits)?
How does their online purchase differ to
offline? After buying online, is there a
change in how they shop the category?
What’s the role of eCommerce in a post
Covid world?
INEQUALITY
among shopper groups evident
between the low SEC shoppers who
will be struggling versus those who
will be able to manage inflationary
pressures. This will affect and
determine who do we reach out to and
what to do to convert these cohorts.
Where are the growth opportunities?
Who are those seeking value? How do
we identify new target audiences?
VALUE
SEEKING
as shoppers trying to cope with
inflation, coupled with the potential
return of Modern Trade driven by
increased mobility. Leveraging the right
Promotional mechanics and activation
within the right categories and channels
is key.
How do I deliver value with increased
margin?
54
What Next
Key strategies for manufacturers to work with Inflation

1. Increase 2. Change 3. Reduce price 5. Reduce

list price product mix promotion 4. Innovate pack size

◼ What impact does price ◼ How to drive distribution ◼ Can we reduce frequency ◼ What additional product ◼ How does pack size
have on sales? of higher priced or depth of promotions? benefits could support a impact consumption rates
products? premium price? / longer term sales?
◼ How much would ◼ Which promotion events
consumers be willing to ◼ How do we optimize our support sales growth? ◼ What are the unmet ◼ Do smaller packs
pay? assortment to allow this? needs in the category / increase / decrease
developing niches? brand loyalty?
◼ Which SKUs can absorb
more of a price increase?
◼ How can we justify price
points to consumers /
customers?

55
Why work with us?
We are the only company to have a complete view of what influences people's purchasing decisions and how this changes over time.

We do this by building single-source views of the shopper journey using our vast purchase panel datasets combined with media
exposure, category usage data and information on how individual shoppers perceive different brands.

This unique capability will allow you to understand how every dollar you spend impacts your target shoppers’ purchasing decisions.

How people are exposed to brand messages and

which channels have the greater reach and
influence
SEE

What brand messages will support a decision to

buy a brand, by different audiences. Feedback on
the user experience and which product
benefits deliver meaningful superiority PURCHASE DECISION
THINK

How the in-store environment and

broader market factors support the
shopper’s decision to buy at shelf
SHOP

56