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The Future of Food - Business Model Challenges

This presentation file from Ipsos Agriculture Research and Consulting team looks at the current trends within the Food & Beverage industry and what they might mean for the future. The presentation delves into:

- Food in Modern Times
- How Far Can Marketing Bring Your Company to Success?
- New Business Climate and the 'Real Value' Offerings
- Responding to Business Challenges
- Global food consumption trends and implications
- The quest for health and well-being
- Implications for brand marketers

If you would like to discuss the issues raised within this presentation then please email our Agribusiness and Animal Health team on agribusiness@ipsos.com or email consulting.bc@ipsos.com

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The Future of Food - Business Model Challenges

  1. 1. Thailand.bc@ipsos.com THE FUTURE OF FOOD: BUSINESS MODEL CHALLENGES COLIN KINGHORN, CHIEF OPERATING OFFICER, IPSOS BUSINESS CONSULTING GORDON MILNE, MANAGING DIRECTOR – ASIA PACIFIC, IPSOS UU 25 JUNE 2014
  2. 2. Thailand.bc@ipsos.com 2 Better for the Planet Rising population and greater social awareness will bring fundamental change – but when?
  3. 3. Thailand.bc@ipsos.com BUSINESS UNIT STRATEGY COMPETITIVE INSIGHTS GO-TO-MARKET INNOVATION SCOUTING PARTNER EVALUATION SALES & MARKETING OUR SOLUTIONS FIND OUT MORE ABOUT IPSOS IN THAILAND visit us at www.ipsosconsulting.com
  4. 4. Thailand.bc@ipsos.com 4 Food in Modern Times How Far Can Marketing Bring Your Company to Success? New Business Climate and the 'Real Value' Offerings Responding to Business Challenges Global food consumption trends and implications The quest for health and well-being Implications for brand marketers Content The Future of Food
  5. 5. Thailand.bc@ipsos.com FOOD IN MODERN TIMES
  6. 6. Thailand.bc@ipsos.com 6 The Modern-Day Consumption of Food Taste? Nutrient? Convenience? Food in Modern Times
  7. 7. Thailand.bc@ipsos.com 7 Ingredient players need to be on top of the consumer trends to support the F&B brand owners need for competitive advantage Demand for Food Solutions Over Time CULTURAL, CATEGORY & CONSUMER TRENDS Food in Modern Times Regular Convenience Value for Money Health & Wellness Premium Natural Functional Ethical implications for brand Cost Optimization New Product Development Safety and Quality Urbanization Scandal of Melamine in dairy products Obesity Stroke Beauty Emerging class population EVOLVEMENT OF F&B Source: Ipsos Business Consulting
  8. 8. Thailand.bc@ipsos.com 8 Responding to Market Change R&D SHOULD CONTINUE TO BE LED AT A GLOBAL LEVEL, BUT UNDERSTANDING SPECIFIC CUSTOMER NEEDS IS CRUCIAL IF WE ARE TO UNDERSTAND THE DISCREET NUANCES THAT CAN HELP SECURE SUCCESS Food in Modern Times Product offering A handful of direct customers, especially in the beverage market Different lifestyles of end consumers in each nation The demand for food solutions has evolved over time •The top 10 companies account for approximately 40% of global beverage industry and have a significant global footprint •Ingredients players need to work closely with these global companies to continue to meet their needs •People are different! And those differences have implications on their eating habits •Cultural diversity significantly shapes the choice of food and beverage in each market •Sustained success in the business depends largely on anticipating the tastes and trends •Ingredient players need to be on top of the consumer trends to support F&B brand owners need for competitive advantage Source: Ipsos Business Consulting
  9. 9. Thailand.bc@ipsos.com 9 Jerome McCarthy's 1960 model Right Product Offering, Right Strategies The Marketing Mix Food in Modern Times Classic Model Today's Model Product Price Place Promotion Product Price Place Promotion Physical Facilities Process People Further key considerations, especially for the food service sector: •People - customer service orientation, employees, management, customer service •Process - uniformity of food service offering, delivery, IT support, timeliness •Physical Facilities - online experience, cloth, building, surrounding environment, temperature Booms and Bitner's 1981 model Source: McCarthy, Jerome E.
  10. 10. Thailand.bc@ipsos.com HOW FAR CAN MARKETING BRING YOUR COMPANY TO SUCCESS? A Case : Coca Cola
  11. 11. Thailand.bc@ipsos.com 11 A Case : Coca Cola – Advertising Strategies Marketing and Advertising Strategies Over Time Marketing to Success •1886 "Drink Coca-Cola" •The year Coca Cola was found •1904 "Delicious and Refreshing" •Marketing campaigns showing the happy beautiful women enjoying the refreshing new beverage made record growth and expansion •1928 Brand Awareness Raising •Coca-Cola appeared at the Olympics in Amsterdam, one of the first Olympic marketing campaigns •Coca-Cola neon sign in Times Square, New York •1971 "I'd like to buy the world a Coke" •Campaign featuring people from various cultures, all of whom enjoying Coca-Cola •1904 – present •Use of marketing by spokesperson. Endorsement by numerous sports stars and celebrities
  12. 12. Thailand.bc@ipsos.com 12 A Case : Coca Cola – Advertising Strategies Marketing and Advertising Strategies Over Time Marketing to Success The first Coca-Cola celebrity endorsement – Hilda Clark, a famous American model and actress The first appearance of Coca-Cola at the Amsterdam Olympics in 1928
  13. 13. Thailand.bc@ipsos.com 13 A Case : Coca Cola – Advertising Strategies Marketing and Advertising Strategies Over Time Marketing to Success The most recent Coca-Cola advertising campaign – FIFA World Cup 2014 The-go-global advertising campaign - I would like to buy the world a Coke in 1971
  14. 14. Thailand.bc@ipsos.com 14 Marketing to Success How is Coca Cola doing now?
  15. 15. Thailand.bc@ipsos.com 15 •Coca Cola Life with Natural Sweetener 'Stevia' –It was Initial launched in Argentina (along with Mexico, the U.S., Chile and Uruguay) –The products will be launched on some European markets, including France by end 2014 –It is produced with stevia, the plant originated in Paraguay previously known to be used in fruit-flavored drinks and sugar as sweeteners –It has less than half of the sugar and calories of classic Coke and packaged in green label on plant bottle (100% recyclable) –Coke life is marketed as the natural image of Coca Cola to attract health-conscious customers •Can this marketing campaign bring Coke to success? –The product aims to drive the carbonated soft drinks market which is struggling over times due to more health-conscious consumers and obesity concern such as in US where two of every three adults, and one of every three children is obese –Despite the tremendous growth in stevia usage in commercial products as alternative sweetener, Coca cola life has NOT been successful in terms of sale volume Case# 1 – The GREEN Coke Healthier Choice Offering Marketing to Success Sources : Siegel+Gale
  16. 16. Thailand.bc@ipsos.com 16 •The Ice-bottle Coke –It is Initial launched in Colombia especially on a beach in a hot climate –The bottle is made of silicone molds filled with micro-filtered water and wrapped with a branded elastic band to prevent your fingers stuck with the ice –The design is marketed as eco friendly since it melts after the Coke is consumed and no need to recycle –90% premium in price is added up as the cost is almost twice as much to produce than regular ones •Can this marketing campaign bring Coke to success? –Very successful as beachside vendors have sold an average of 265 bottles per hour –Customers are willing to pay a higher cost for the commodity of this refreshing packaging –Despite the environmental-friendly concept, the bottles are not cost effective to produce as it requires extra energy to keep the bottles frozen during distribution Case# 2 – The Ice Bottle Innovation-led Brand Promotion Marketing to Success Source: Bloomberg BusinessWeek, Coca-Cola Colombia
  17. 17. Thailand.bc@ipsos.com 17 •Names printed onto Coke bottles/cans –Thailand is the only Asian country to launch this campaign in September 2013 after Australia, UK, Italy, France and Brazil –People's nicknames and their expressions are printed on 250 million cans and bottles of Coca-Cola for the “share a Coke” campaign in Thailand –More than 80 nicknames and 10 expressions had been chosen by Coca Cola to print on its cans and bottles –The campaign aimed at encouraging young Thais to express their feelings and connect with one another as the Thais are believed to be reserved about expressing how they feel about other people •Can this marketing campaign bring Coke to success? –Coca Cola sales in October 2013 grew 24% compared to that of the same month in 2012 –169,000 Cans with specific name printed are sold within 1 month Case# 3 – Share a Coke! Symbolic Consumption Marketing to Success Source: The Nation, Coca-Cola Thailand
  18. 18. Thailand.bc@ipsos.com 18 Case# 3 – Share a Coke! Symbolic Consumption Marketing to Success Source: The Nation, Coca-Cola Thailand “feeling loved” ….. Sending Coke to me After a huge success of “share a Coke campaign”, another recent Coca Cola marketing activity is to print your photo on the “FIFA World Cup" bottle has been launched.
  19. 19. Thailand.bc@ipsos.com 19 Summarizing the Marketing Success Waves of Short-Term Boom Marketing to Success Coca Cola Life •The product still cannot drive the market growth for Coke especially in the sutured markets •Stevia cannot make the similar taste to the original Coke •Health-conscious consumers still not perceive it as healthy products Ice bottle Coke •Coca cola used packaging innovation to boost the brand image •The products are very successful at the points of sales at 265 bottles per hour sold on average in Colombia •There are concerns about the hygiene issue and the long- term impact on sales when this innovation become old and no longer exciting Share a Coke! •The campaign generated 24% growth in month-on-month sales in Thailand •Despite the excitement aspect, consumers received no real additional value from the products •It is expected that this campaign will be a short-term hit only
  20. 20. Thailand.bc@ipsos.com 20 Marketing to Success Can these campaigns sustain in the new business climate?
  21. 21. Thailand.bc@ipsos.com NEW BUSINESS CLIMATE AND THE 'REAL VALUE' OFFERING
  22. 22. Thailand.bc@ipsos.com 22 The Issue of the Sugar Content in Coke An Interesting Discussion from BBC newsnight The real value offering The Issue of the Sugar Content in Coke Video Click for the video http://www.youtube.com/watch?v=2uf8iTpX28o&feature=youtu.be
  23. 23. Thailand.bc@ipsos.com 23 Eating well is No.1 approach to being healthy However, the approaches vary by nationality, gender, and age The real value offering 76% 84% 74% Level of Health Concern Majority of women who are health conscious eat well and also exercise while men tend to eat healthy food only People age 18-44 tend to exercise while people over 45 years are more concerned about eating healthy food For most age groups, people who are health conscious will eat well and also exercise - apart from men age between 25-44 years old who prefer to exercise only In general, majority of women prefer to eat healthy food compared to majority of men who exercise more For most age groups, people who want to be healthy will eat healthy food and exercise. However, those 18-24 and 55-64 only need to eat well to stay healthy! For residents who do only one activity, we notice that men tend to exercise while women mainly eat healthy food Source: Ipsos survey with 2,500 people in USA, UK and Thailand
  24. 24. Thailand.bc@ipsos.com 24 TOP CAUSES OF DEATH in the world 1)Ischemic Heart Disease 11.2% 2)Stroke 10.6% 3)Lower Respiratory Tract Infections 6.7% 4)Chronic Obstructive Lung Disease 5.8% 5)Diarrheal diseases 4.7% 6)HIV/AIDS 3.0% 7)Lung Cancer incl. Trachea and Bronchus 2.7% 8)Diabetes 2.6% Demand for food solutions has evolved over time A demanding lifestyle does not have to be unhealthy Health Problems faced by Global Citizens Spreading of major diseases to every corner of the world The real value offering Source: World Health Organization
  25. 25. Thailand.bc@ipsos.com 25 Facts of Major Diseases in Asia The real value offering Source: World Health Organization HYPERTENSION •High blood pressure is the leading causes of stroke and heart diseases, which are the top two causes of death in the world •1 of 3 adults in South East Asian countries has hypertension •Wrong eating habit is the most critical cause of hypertension DIABETES in South East Asian Countries and India 2011 2030f Regional Prevalence 8.3% 10.2% Number of People with Diabetes 71.4 million 120.9 million Diabetes and hypertension as the major threat among South East Asian countries
  26. 26. Thailand.bc@ipsos.com RESPONDING TO BUSINESS CHALLENGES
  27. 27. Thailand.bc@ipsos.com 27 •Thai people nowadays spend less time cooking for themselves due to the changing lifestyle •For example, MK restaurants, a highly-recognized brand from Thailand –80% market share of all sukiyaki-type restaurants in Thailand –3 million people eat at MK everyday in Thailand –targets to be a "Regional Brand" in Asia Pacific in the next 10 years –359 branches in Thailand; 33 in Japan; and 1 in Vietnam, Indonesia, and Singapore •MK's key success factors: –Fresh ingredients for customers managed by efficient logistic and quality control systems –Value-based pricing that suits the qualities of food –Position as a healthy restaurant to attract general and health-conscious consumers Example# 1 – Eating Out Consumers How people seek restaurants that suit their needs Responding to challenges Source: Stock Exchange of Thailand, Enterprise Architerture, Modeling-Thammasat University, Ipsos' analysis
  28. 28. Thailand.bc@ipsos.com 28 How MK provides 'the Real Value' Responding to challenges Sufficient nutrition information •Nutrition and energy provided in each meal •Total ingredients provided to customers •Strengthening the healthy food concept Fresh and good quality ingredients •Deliver vegetable daily from supplier as they lose their freshness in one day •Efficient storage system with -18 c frozen storage in wagons •Efficient strategic DC location with each branch Brand Target - Family consumers - Health-conscious (fresh ingredient loving) consumers •Energy •Protein •Fat •Carbohydrate Eating Experience •Customized self-cooked food experience •Sharing of happy time with group-eating activities •Waiters and waitresses dance actively at certain times Source: Ipsos Business Consulting
  29. 29. Thailand.bc@ipsos.com 29 •Betagro launched S-Pure fresh food to target premium consumers – high income middle class as well as Japanese expats in Greater Bangkok and other tourism provincial hubs –15% annual sales increase or approximately THB 500 million since 2007 –80% market share of fresh food premium products in 2012 –80% of sales comes from pork and chicken, while eggs are expected to be the growing product sector •Betagro's key success factors: –Effective communication to health conscious consumers –Convincing packaging that communicates the benefits of consuming healthy products –Wide distribution channels through up scale supermarkets Example# 2 – Packaged Food Betagro’s S-Pure fresh food Responding to challenges Source: Positioning Magazine, Prachachat, BrandAge, Ipsos’ analysis “Our chicken is healthy, eating sufficient cereal and having no growth substances” “There is no chemical residue which is the major cause of drug resistance (in humans)”
  30. 30. Thailand.bc@ipsos.com 30 Example# 2 – Packaged Food Betagro's frequent TV commercial Responding to challenges Source: Positioning Magazine, BrandAge, Ipsos’ analysis TV commercials that display the food safety concept with a celebrity that represents high-income middle class customers
  31. 31. Thailand.bc@ipsos.com 31 Example# 2 – Packaged Food Food Value Chain – Different Origins Responding to challenges Source: Stock Exchange of Thailand, Enterprise Architerture, Modeling-Thammasat University, Ipsos' analysis Battery Hens Barn Hens Free Range Hens
  32. 32. Thailand.bc@ipsos.com 32 Current Food Service Providers Responding to challenges Health Taste BH EH BT ET Budget Concern Exclusive Experience Source: Ipsos Business Consulting
  33. 33. Thailand.bc@ipsos.com 33 Predicting the Future of Food Service Responding to challenges Health Taste Budget Concern Exclusive Experience BH EH BT ET Source: Ipsos Business Consulting
  34. 34. Thailand.bc@ipsos.com 34 Example# 2 – Eating at Home Consumers How people around the world define HEALTH and WELLNESS? Responding to challenges http://www.youtube.com/watch?v=0WPB6myXsXI Global Health Video Click for the video
  35. 35. Thailand.bc@ipsos.com 35 Understanding local needs is key to success Responding to challenges United States : The Fast-Food Nation •Today's Culture – Speed and Convenience –Americans are in the midst of a “lifestyle disease” epidemic •Lifestyle of Americans –Fast food consumption culture i.e. poor nutrition –Rising rates of physical inactivity as everything is convenient –Frequent alcohol consumption –Increased stress at work from ever increasing market competition Europe : The Health Conscious Region •Today's Culture – Natural and Organic Lover –Nature is best. Let's go back to basics! •Lifestyle of Europeans –Highest level of literacy translating to high concern for health and wellness –Willingness to pay more for healthier products –Culture that values regular exercise, fitness, and sports –Life under strict health-related law, rules, and regulations Asia : The Beauty Products Craze •Today's Culture – Consumption for Beauty –"Beauty, beauty and beauty" and "Beauty Comes From Within" •Lifestyle of Asians –Nutricosmetics and functional foods are driven by Asia Pacific, led by Japan and China –Urban consumers believe in the efficacy of nutricosmetics (USD 3 billion in sales) –Low/zero calorie product boom Source: Ipsos Business Consulting
  36. 36. Thailand.bc@ipsos.com 36 Current Food Manufacturers Responding to challenges Health Taste Budget Concern Exclusive Experience BH EH BT ET Source: Ipsos Business Consulting
  37. 37. Thailand.bc@ipsos.com 37 Predicting the Future of Food Manufacturing Responding to challenges Health Taste Budget Concern Exclusive Experience BH EH BT ET Source: Ipsos Business Consulting
  38. 38. Thailand.bc@ipsos.com 38 •From the major manufacturer of chocolate and ice-cream that could cause obesity and diabetes, Nestlé also aims to build a business on foods that treat those conditions •The goal is now is to make the “food as medicine”, the food that prevents or cure the major chronic diseases •Food companies rely on the fact that producing medical food is cheaper than bringing in new pharmaceuticals. Therefore, its next mission is to convince doctors, nutritionists, and society through facts •Nestle has acquired a number of nutritional products, and pharmaceutical companies to expand its product line to target more healthy products •Receptiveness in the medical food is on the rise and is the top factor to win the healthy food segment and the food market in general Example# 3 – Functional Food A new focus of Nestlé Responding to challenges Source: Bloomberg, Ipsos Analysis “Boost shakes” helping manage blood glucose level “Peptamen” powdered drink for critically ill obese patients “Nestle image now is more than the powdered hot chocolate drinks manufacturer as it did two generations ago. Now the company wants to be known as the health science foundation with long-range targets that include becoming a leader in medical food” Said Nestle Head of Health Science Unit
  39. 39. Thailand.bc@ipsos.com 39 Interesting Facts •The total value of the food service market in Southeast Asia was valued at USD 21 bn •There are over 1.3 million food outlets across Southeast Asia •Tourism industry and increase in earning of urban workers are the key driver of the growth in the food service sector in ASEAN •500 million people dine out at least once a year •Over 40% of ASEAN population are Muslim, making one of the biggest halal food market in the world Increased Competition in ASEAN Ongoing presence of food service franchise brands Responding to challenges Source: United Nation, Unilever Foodsolutions, Euromonitors
  40. 40. Thailand.bc@ipsos.com 40 •ASEAN people especially in the urban region are willing to pay more for the better quality to suit with the value for money due to an increase in revenue and countries’ urbanization rate1 Food Consumption Trends in ASEAN Responding to challenges Source: AseanAEC, WHO 19% growth rate of bourgeois consumption compared to 0.6% of developed countries •ASEAN consumers are more health and information conscious especially in the country with a high rate of aging population such as Singapore and Thailand making an organic, functional food and healthy restaurants are more popular •Full service restaurants, especially the strong brands, will continue to receive great attention from the public affected as a result of the eating out culture in many countries •ASEAN consumers like to try various kinds of foods and beverages from different countries but are familiar with the similar taste of their home dishes ASEAN Food consumption trend changes to the more quality and healthy segments
  41. 41. Thailand.bc@ipsos.com 41 Food Consumption Trends in ASEAN Responding to challenges Source: United Nation, Unilever Foodsolutions, Euromonitors Past 20 Years Next 20 Years The “still” dominance of global major food brand Emergence of microwave and frozen food Expansion of franchise food brands in emerging markets Prevalence of western disease to emerging markets Present (2014) Well-informed food packaging as consumers want more information Government to focus on food regulation, health products and ethical issues of food production real value offering proposed from manufacturing companies Minimal land available for cultivation Rising prices in agricultural commodities The future of food
  42. 42. The Future of Food June 2014
  43. 43. 43 Technology Health & Wellness Experimentation
  44. 44. A lot is changing around the world, in our homes Changes in Home Cooking Increasing % of working women Smaller, urban families Blending seamless time zones Socialization of cooking Singles, boomerang kids
  45. 45. Needs around meal slots BREAKFAST Divestment of food Seek palate formats (i.e. hot/cold/ dairy/etc) On the go, converged (bars, liquids, 3-in-1s , etc) MODULAR DINNER Globalization of food Ethnic menus ‘Low’ Tea Snacky EXPERIMENTATION LUNCH The core meal – still governed by traditional/ethnic moorings In home: Seeking the ‘complete’ meal option - likely to also be the main cooking occasion Out of home: Mobile substitutes that ‘complete’ the meal e.g. Sandwich fillings Implications: different food needs by meal structure Greater scope to get into breakfast/dinner space vs lunch space for cooking With internationalization of time zones and new lifestyles, different food options may emerge
  46. 46. Thailand.bc@ipsos.com POWER BREAKFAST Propositions of power and energy added to convenient formats for new lifestyle
  47. 47. Thailand.bc@ipsos.com CONVERGENCE Offering interesting combinations of nutrients, formats and tastes for breakfast
  48. 48. Thailand.bc@ipsos.com MASHUP More frequent, smaller meals A quick afternoon pick-me-up meal
  49. 49. Thailand.bc@ipsos.com DISTRACTED DINING Meals for singles, eat-alone’s
  50. 50. Thailand.bc@ipsos.com GLOBAL FOOD More international cuisines, mix n match with palates
  51. 51. Thailand.bc@ipsos.com FINGER FOOD Bite size, handheld, on the go, frequent
  52. 52. New sources, new role models Loss of tradition and traditional sources Seek authenticity, traditional recipes Look for same output with lesser effort, time Return to cooking from scratch in some societies Singles’ households with specific food needs New sources for home cooking – from ‘people like me/my mom’ Social cooking – procuring through social networks Hobby cooking Engagement of other family members in cooking – male, kids … Implications: new role models, new sources for credibility, new food offerings, new target groups
  53. 53. Thailand.bc@ipsos.com GENERATIONAL COOKING The rise of millenials in home cooking
  54. 54. Thailand.bc@ipsos.com FOOD PORN INDEX Interactive site tracks #foodporn mentions in real- time Source: Trendwatching.com
  55. 55. Demands of experimentation, engagement Working, less time, multiple roles Less knowledge, fewer references Health, safety pressures and challenges New demands of ‘good looking’ food Emotions around cooking: anxiety, apathy, boredom, lethargy The new housewife
  56. 56. Thailand.bc@ipsos.com CHEERIOS Cereal brand's campaign helps families connect at breakfast Source: Trendwatching.com
  57. 57. Thailand.bc@ipsos.com HUMANIZING COOKING Taking the pressure off perfect cooking, sharing fails "I wanted to make the really cute deviled eggs that looked like chicks for Easter. I realized quickly it wasn't as easy as it looked. Trying to get the yoke out of the small opening mostly meant that the white split. Or I would try to slit the top of the egg off only to find the yoke right there or at the other end. There was no consistency where the yoke was as evidenced by the odd shaped egg chicks in the picture."
  58. 58. Thailand.bc@ipsos.com New needs around food Special food Super food Fresh food ‘Clean’ food ‘Clean’ cooking Gorgeous food Niche foods Diet foods (gluten free, vegan, etc) Diabetic Vegetarian Organics Unique nutrients Packed with minerals, vitamins Anti oxidants Collagen Rich New processes and sources for freshness in food Food clean of ‘bad’ elements like calories, cholesterol, fat, etc New, healthier cooking processes that preserve inherent goodness of foods Good looking food, packaging
  59. 59. Thailand.bc@ipsos.com SUPER FOODS Power packed with nutrients, rich in minerals, calcium, vitamins …. Maple Water Greek Yogurt Freekeh and Teff Grains Coconut Oil Cauliflower Kale
  60. 60. Thailand.bc@ipsos.com FARM FRESH Vending machine sells a range of healthy, locally sourced fresh foods Source: Trendwatching.com
  61. 61. Thailand.bc@ipsos.com FRESH MONITOR Color-changing labels monitor food freshness Source: Trendwatching.com
  62. 62. Thailand.bc@ipsos.com GROW FRESH Aquaponic cabinet allows homeowners to grow fresh food from their kitchen Source: Trendwatching.com
  63. 63. Thailand.bc@ipsos.com FRESH LABELS Increasing need for transparency in food labels indicating quality and freshness
  64. 64. Thailand.bc@ipsos.com ‘CLEAN’ COOKING Sous vide machine can be programmed remotely Source: Trendwatching.com
  65. 65. Thailand.bc@ipsos.com ‘CLEAN’ VICE Fast-food chain's menu features ‘healthier’ fries Source: Trendwatching.com
  66. 66. Thailand.bc@ipsos.com ’CLEAN’ VICE Ice cream brand unveils vegetable-flavored desserts Source: Trendwatching.com
  67. 67. Thailand.bc@ipsos.com QUESTIONS AND COMMENTS? www.ipsosconsulting.com www.linkedin.com/company/ipsos-business-consulting www.facebook.com/ipsosbc
  68. 68. Thailand.bc@ipsos.com CONTACT US AUSTRALIA PERTH Ground Floor, 338 Barker Road Subiaco, WA, 6008 Australia australia.bc@ipsos.com Telephone 61 (8) 9321 5415 SYDNEY Level 13, 168 Walker Street North Sydney 2060 NSW, Australia australia.bc@ipsos.com Telephone 61 (2) 9900 5100 GREATER CHINA BEIJING 12th Floor, Union Plaza No. 20 Chao Wai Avenue Chaoyang District, 100020 Beijing, China china.bc@ipsos.com Telephone 86 (10) 5219 8899 SHANGHAI 31/F Westgate Mall 1038 West Nanjing Road 200041 Shanghai, China china.bc@ipsos.com Telephone 86 (21) 2231 9988 HONG KONG 22/F Leighton Centre No 77 Leighton Road Causeway Bay Hong Kong hongkong.bc@ipsos.com Telephone 852 3766 2288 FIND YOUR NEAREST IPSOS OFFICE INDIA MUMBAI 5th, 6th and 7th Floor, Boston House Suren Road, Andheri (East) 400- 093 Mumbai, India india.bc@ipsos.com Telephone 91 (22) 6620 8000 NEW DELHI C-1 First Floor Green Park Extension 110 016 New Delhi, India india.bc@ipsos.com Telephone 91 (11) 4618 3000 INDONESIA Graha Arda, 3rd Floor Jl. H.R. Rasuna Said Kav B-6, 12910 Kuningan Jakarta, Indonesia indonesia.bc@ipsos.com Telephone 62 (21) 527 7701 JAPAN Hulic Kamiyacho Building 4-3-13, Toranomon Minato-ku, 105-0001 Tokyo, Japan japan.bc@ipsos.com Telephone 81 (3) 6867 8001 KENYA Acorn House 97 James Gichuru Road, Lavington P.O. Box 68230 00200 City Square Nairobi, Kenya kenya.bc@ipsos.com Telephone 254 (20) 386 2721-33 MALAYSIA 18th Floor, Menara IGB No. 2 The Boulevard Mid Valley City Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia malaysia.bc@ipsos.com Telephone 6 (03) 2282 2244 PHILIPPINES 1401-B, One Corporate Centre Julia Vargas cor. Meralco Ave Ortigas Center, Pasig City, 1605 Metro Manila, Philippines philippines.bc@ipsos.com Telephone 63 (2) 633 3997 SINGAPORE 11 Lorong 3 Toa Payoh Block B #03-26/27/28 Jackson Square, S319579 Singapore singapore.bc@ipsos.com Telephone 65 6333 1511 SOUTH KOREA 12th Floor, Korea Economic Daily Building, 463 Cheongpa-Ro Jung-Gu 100-791 Seoul, South Korea korea.bc@ipsos.com Telephone 82 (2) 6464 5100 THAILAND 21st and 22nd Floor, Asia Centre Building 173 Sathorn Road South Khwaeng Tungmahamek Khet Sathorn 10120 Bangkok, Thailand thailand.bc@ipsos.com Telephone 66 (2) 697 0100 TURKEY Centrum Is Merkezi Aydinevler No:3 34854 Kuçukyali 3 Istanbul, Turkey turkey.bc@ipsos.com Telephone 90 (216) 587 1111 UAE 4th Floor, Office No 403 Al Thuraya Tower 1 P.O. Box 500611 Dubai Media City, UAE uae.bc@ipsos.com Telephone 971 (4) 4408 980 UK Minerva House 5 Montague Close SE1 9AY London, United Kingdom uk.bc@ipsos.com Telephone 44 (20) 3059 5000 USA 31 Milk Street Suite 1100 Boston, MA 02109 United States of America us.bc@ipsos.com Telephone 1 (617) 526 0000 VIETNAM Level 9A, Nam A Bank Tower 201-203 CMT8 Street, Ward 4 District 3 HCMC, Vietnam vietnam.bc@ipsos.com Telephone 84 (8) 3832 982
  69. 69. Thailand.bc@ipsos.com 70 In the US, two of every three adults, and one of every three children is obese. In Mexico, diabetes kills 70,000 people annually. Western diets—particularly processed food, artificial ingredients and sodas—are bearing most of the blame. In an effort to reverse this trend, health-conscious customers are drinking less and less sugary, carbonated sodas that clock in at about 250 calories per 600mL bottle. New York City Mayor Michael Bloomberg has even tried to ban the bucket-sized soda portions. While Coke has attempted to address diet and obesity issues through its communications to customers via informative videos on health like this one, they are often met by a mocking parody. When it comes to health, soda continues to be the bad guy. So how do soda brands remain successful, when their very foundation is under fire and sales are steadily plummeting? Enter the new Coca-Cola Life, a new soda with only 108 calories per bottle that uses stevia as a sugar substitute. With less than half the calories of classic Coke, Coca-Cola Life is an appealing option for those seeking a healthier alternative. Promoted as “green” and “natural,” the beverage is sold in a recyclable PlantBottle, made from 30% plant-based materials. The initial launch occurred only in Argentina—no surprise, as the country is currently a top consumer of sodas (along with Mexico, the U.S., Chile and Uruguay). Branding reinforces the idea that the new beverage is “natural,” a theme now ever-present in the food and beverage industry in an attempt to attract health-conscious customers. The traditional red on the Coke label is replaced by an avocado- green hue, and images are treated with a natural, sepia tone. Advertisements depict blissful consumers in sunlit fields next to antique wooden crates filled with bottles of the new beverage—perhaps a nod to earlier times, before soda was accused as being one of the leading factors of obesity. Even the name Coca-Cola Life suggests that this new product is a healthier, more spirited choice when compared to full-calorie sodas. Coke is not the first soda company to enter this territory. Dr. Pepper TEN has had some success in the US, and Pepsi Next was introduced in Australia in 2004. These strategic product decisions—especially Coke’s—signal that consumer demands for healthier, more sustainable options have been heard, and brands will have to respond if they want remain relevant. How have other food and beverage brands reacted to this health trend? Who has adapted successfully, and do you think will have trouble? Can you think of any new brands that have emerged as a result of this trend? Appendix I Coca-Cola Life: A healthy brand extension, but will it succeed?
  70. 70. Thailand.bc@ipsos.com 71 During its ice bottle giveaway in Colombia, Coca-Cola (KO) gave away an average of 265 frozen bottles an hour, the company says. Here’s how they did it: “Micro-filtered water” is poured into silicone molds, then frozen to -13°F. The ice bottles are shipped empty; servers fill them with soda right before handing them over. (So in fact it’s more like a bottle-shaped glass.) To prevent your delicate fingers from getting stuck to the ice, each bottle is wrapped with a branded elastic band, which Coca-Cola hopes you’ll wear as a bracelet after you’re done with your drink. That’s one way for the company to make the most of this marketing effort, as the ice bottles cost almost twice as much to produce than regular ones. “This is not an industrial package,” says spokesman Marco Llinas, to our disappointment (but not our surprise). The company is promoting the bottles as easier on the environment (less waste), though it’s worth noting that they do require more refrigeration. Llinas says he is not aware of plans to offer it elsewhere Appendix II Ice Bottled Coke
  71. 71. Thailand.bc@ipsos.com 72 Coca Cola launches ‘Be Fizzy, Be Bold, Share a Coke’ campaign in Thailand. This is a really interesting and fun campaign, which aims to bring Thai people closer and be able to express themselves more Nick names of people and Thai expressions are printed on 250 million cans and bottles of Coca Cola. The company wants Thai people to be able to connect more with Coke as a brand. It also wants to improve its marketing and sales in the country. More than 80 nicknames and 10 expressions, such as “Kon Naa-rak”, “Kon Jing-jai”, “Kon Pi-sed”, “Kon Suay”, and “Kon Lor”, have been chosen by Coca-Cola to print on its cans and bottles. With an investment of Bt140 million, the campaign will run until the end of the year. “We know that Thai people are positive and happy … But they are also very reserved about expressing how they feel about other people, especially when those feelings are mixed with special emotions or are particularly complimentary. We want to make it easier for people to spread positive feelings and goodwill towards those they love or admire, because that is one of Coca-Cola’s most special brand attributes,” said Konstantinos Delialis, marketing director of Coca-Cola (Thailand), in his first interview with local media. Coca-Cola (Thailand) posted Bt30 billion in sales last year. According to Nielsen, Coca-Cola sales grew by 21 per cent year on year as of June. Coca-Cola (Thailand) last month introduced special-edition cans with the word “Mum” on them to mark Mother’s Day. The campaign received strongly positive consumer response, with more than 5 million cans sold. Delialis said Coca-Cola operated in 200 markets around the world and each market learned from the others. Originated in Australia, the “Share a Coke” campaign is now in 50 markets around the world. However, Thailand is the first country in Asia with the personal-nicknames campaign. The ‘Share a Coke’ campaign has been a phenomenal success in Australia, the UK, Italy, France, Brazil, Austria, Germany, Greece and Israel too,” he said. Appendix III Share a Coke Campaign
  72. 72. Thailand.bc@ipsos.com 73 Nestlé Health Science aims to pioneer a new industry between the traditional nutrition and pharmaceutical industries through the development of science-based personalized nutritional solutions and shaping a new approach to disease prevention and management. Acquisitions Pamlab: Acquired in 2012, specialises in medical food products for use under medical supervision in the nutritional management of patients with mild cognitive impairment, depression and diabetic peripheral neuropathy. Read more: New US acquisition for Nestlé Health Science will strengthen Brain Health and Metabolic Health portfolios with new medical foods Prometheus Laboratories: Acquired in 2011, specialises in diagnostics and licensed speciality pharmaceuticals in gastroenterology (GI) and oncology. Read more: CM&D Pharma: Acquired in 2011, specialises in the development of products for patients with chronic conditions like chronic kidney disease and gastrointestinal. Vitaflo: Acquired in 2010, develops and markets clinical nutritional solutions for infants, children and adults with genetic disorders that affect how food is processed by the body. Nutrition Science Partners Limited (NSP): A 50/50 joint venture formed between Nestlé Health Science and the pharmaceutical and healthcare group Chi-Med in 2012. NSP focuses on gastrointestinal health and may in the future expand into the metabolic disease and brain health areas. New partnership gives Nestlé Health Science access to one of the world’s leading Traditional Chinese Medicine libraries Accera: In which Nestlé Health Science acquired a minority stake in 2012, specialises in neurodegenerative disorders, like Alzheimer’s Disease. Nestlé Health Science develops brain health portfolio with new investment Vital Foods: In which Nestlé Health Science acquired a minority stake in 2011, is active in the development of kiwifruit- based solutions for gastrointestinal conditions. Appendix II Nestle strategic move of expanding into medical food

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