This document discusses the emerging middle class in Brazil and its growing importance and influence. It notes that the middle class in Brazil is projected to grow to 56% of the population, or 120 million people, by 2015. This sizable middle class represents 46% of total income and is increasingly adopting technology. The document advocates that businesses must understand and cater to the needs and aspirations of this emerging middle class to succeed in Brazil's growing economy and consumer market. It provides an example of how Coca-Cola Brazil is leveraging community programs and technology to engage with and better serve the emerging middle class.

1. THINK LATIN AMERICAHow to Leverage the Power and Influence of An Emerging Social Class with Increased Purchasing PowerMARCO SIMÕESCOCA-COLA BRASIL

2. WE ARE ALMOST200 MILLION PEOPLE. ALL SHARING THE SAME DREAM: A BETTER FUTURE.Source: U.S. Census Bureau, International Data Base, 2009

3. BRAZIL IS DIVIDED IN 5 REGIONS,with many differences among themThe Northeast Region, beautiful beaches, but stricken by droughts 28.0% of population15.4% of GDPNorth Region, mostlycovered by rainforest,is the largest region 7.8% of population4.5% of GDPCentral-West Region, the country’s capital (Brasília) and much of the farmland6.7% of population10.4% of GDPSoutheast Region has the largest cities (São Paulo and Rio), and is the industrial and financial center 43.0% of population 53.7% of GDPThe South Region has industries and agriculture14.5% of population15.8% of GDPSource: U.S. Census Bureau, International Data Base, 2009

4. FIFA WORLD CUP 2014OLYMPICS 2016

5. SOCCER, SAMBA, CARNIVAL ETHANOL, OIL, AIRPLANES AMAZON, PANTANAL, ATLANTIC RAINFOREST

6. BRAZILIS ON THESPOTLIGHT

7. AND THE GOOD NEWS IS:THE FUTURE ISHAPPENING NOW.

8. WORLD’S 5TH LARGEST ECONOMY BY 2015A leading country in South America and one of the BRIC countries, is #8 todayGDPUS$ billionTop Economies in 2008150005000400030002500200015001000500USAJAPANCHINAGERMANYFRANCEUKITALYBRAZILSource: World Development Indicators Database – World Bank

9. THE EMERGING MIDDLE CLASS

10. WHAT IS THE MIDDLE CLASSINCOME IN BRAZIL?US$ 7,200-US$ 31,200/Yr – 25% growth in 5 yrsSource: CPS/FGV, IBGE (PNAD) – Relates to Family Income

11. EMERGING MIDDLE CLASS GROWTH56%of Brazil’s population= 120MM49%of Brazil’s population= 91MM38%of Brazil’s population= 64.1MM200320082015Source: CPS / FGV / PNAD / IBGE

12. 49% OF THE COUNTRY’S POPULATION IS IN THIS RANGEIT’S MORE THAN 90 MILLION PEOPLEMORE THAN GERMANY’S ENTIRE POPULATIONSource: CPS/FGV, IBGE (PNAD)

13. THOSE PEOPLE REPRESENT, TODAY, THE LARGEST CONSUMPTION MARKETAND/OR POTENTIAL MARKET IN THE COUNTRY.46% OF ALL INCOME67% OF THE EMPLOYED WORKFORCE58% OF TOTAL COMPUTER OWNERS50% OF TOTAL TV OWNERSSource: CPS/FGV, IBGE (PNAD)

14. AND THESE NUMBERS REFER TO 2008!IN 2015, THEY WILL REPRESENT56% OF THE POPULATION, WITH 54%* OF THE PURCHASING POWER. Source: CPS/FGV, IBGE (PNAD)* Projection

15. HOW IS THIS AFFECTING THE CONSUMER MARKET?

16. WHAT HAVE WE LEARNED

17. NEW PRODUCTSAND SERVICE NEEDSWHAT KIND OF CARAPPEALS TO THIS CLASS?WHAT KIND OF BEVERAGEDO THEY DRINK?WHAT SERVICESDO THEY NEED?

18. HALF GLASS FULL IS THEIR WAY OF SEEING LIFE They share pride and satisfaction of theirachievements and have an optimistic view of the future.

19. “FAMILY IN HONEYMOONParents and childrenare building a better future togetherwith no conflict of generations .”

20. “SHE” IS THE LEADERAlthough women are not themain income providers, they havegreat influence on purchasing. Mothers are the foundationof the family, recognizedby their community.

21. ““MY COMMUNITYIS MY WORLD”The community is their extended Family – help lives next door.Services must understand this kind of interactions.

22. “THE GROCERY STORE ON THE CORNER IS MY EVERYDAY PARTNER”Small markets understand these people’s financial circumstances, allowing flexible and delayed payments.

23. TECHNOLOGY MEANS SAFE ENTERTAINMENTBuying electronics for the household is not a matter of social status, it’s about the well-being of the family. With computers at home, children are safer andspend less time out in the streets.

24. TECHNOLOGY ASA SOCIAL LADDERAs it becomes more accessible, technology now means more than job opportunities – it’s a passport for a better future and an icon for social ascension.

25. WHAT ISCOCA-COLA BRAZIL DOING?

26. BETTER FUTURECOCA-COLA BRAZIL’S INTERESTCOMMUNITY INTERESTYOUNG PEOPLEINCOME GENERATIONEnterprising

27. First Job visionBUSINESS + COMMUNITY GROWTHCoca-Cola and the community sharinga single goal: a better future for everyone.

28. BUILDING A BETTER FUTURE FOR THE EMERGINGMIDDLE CLASS, THE COUNTRY AS A WHOLE GROWS STRONGER AND SODOES THE COCA-COLA BUSINESSTHIS IS SOCIAL BUSINESS.

29. TO MAKE IT HAPPEN,WE CREATED THE “COLETIVO” COCA-COLA.

30. VIDEO

31. TODAY, WE HAVE 6 COLETIVOSIN OPERATION.There will be many more throughout the country in the future2009 6 coletivos2020 1500 coletivos

32. TO MAKE IT HAPPEN, COCA-COLA BRASIL USES TECHNOLOGY IN A “PLAYFUL WAY”Besides out-of-home activities, students can learn through simulations of POP duties in a computer game.

33. TECH IS THE FUTURE

34. EVERY YEAR, PEOPLE GET MORE CONNECTEDInternet Penetration in Brazil89%90%80%76%71%70%60%45%50%39%40%33%25%30%21%20%15%10%0%200720082009Upper classLower classMiddleclassSource: IAB indicadores, 2009

35. INTERNET CAFES BECAME THE MEETING POINTS FOR THE YOUTHINTERNET ACESS OUT OF THE HOUSEHOLDRESPONDS FOR 49% OF ALL ACCESSTHERE ARE MORE THAN 90,000 I-CAFES IN BRAZIL, COMPARED TO 2,600 BOOKSTORES OR 2,300 MOVIE THEATERS.Source: FGV

36. WE DON’T HAVE TO PERSUADE MIDDLE CLASS MEMBERS ABOUT THE IMPORTANCE OF TECHNOLOGY91%agreeitisveryimportantthatchildren haveaccess to computers.80%believethatpeoplewho don’t understand technologyaretrappedinthepast, and have less opportunities in life.79%agreethat computers are essential and it’simpossibletolivewithoutthem.44%ofyoungpeopleagreetheyfeel addicted to technology.Source: McCann-Erickson/Data Popular research, 2008

37. TECHNOLOGY IS ASSOCIATED WITH STATUS, INDICATING PURCHASE INTENT68% intend to buy a widescreen TV64% are thinking of buying or changing their computers61% are considering buying/changing their digital camerasSource: McCann-Erickson/Data Popular research, 2008

38. LAPTOPS ONLY FALL BEHIND CARSAS A SIGN OF STATUSHigh Status Products786451New carDesigner watchLaptopsSource: McCann-Erickson/Data Popular research, 2008

39. AND THEY ARE ALSO BUYING ONLINE:59%of online buyersin Brazil come fromthe middle class, representing10% of turnover.Source: e-bit

40. FINAL MESSAGE

41. TO ACHIEVE SUCCESS IN BRAZIL, ONE NEEDS TO CONQUERTHE EMERGING MIDDLE CLASS.THEY ARE THE FUTURE.AND THE FUTURE HAS ALREADY STARTED.

42. BEING SUCCESSFUL IN BRAZIL (AND LATIN AMERICA) WILL MAKE A DIFFERENCE FOR EVERY BUSINESS.This is the decade of Brazil: The land of the Olympics, the Football World Cup, the energy of ethanol and oil.And home to the world’s fastest growing consumer power.

43. THANKYOUMARCO SIMÕESMSIMOES@LA.KO.COM