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1. Global Perspective 2. Integrated Industry Perspective 3. Technology Perspective 4. Economic Perspective 5. Competitive Perspective 6. Customer Perspective 7. Best Practices Perspective
5.5%
CAGR (2004 2009)
9.6%
Latin America (LA) Europe (EU) Asia Pacific (APAC) Mid. East & Africa (MEAF) North America (NA)
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
2014
NA 10% LA 15%
2009
NA 11% LA 14%
2004
NA 12% LA 13%
EU 22%
MEAF 21%
APAC 33%
EU 24%
MEAF 22%
APAC 32%
APAC 29%
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Food & Beverage Market: Product Category Share of Revenues per Region, (World), 2009
8.9% 3.2% 8.0% 4.6% 7.1% 5.5% 6.6% 5.5% 7.4% 5.7%
14.0%
15.5%
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
Mega Trend
2010
2015
2020
Globalization Economic rebound continues Rising Food Prices Due to Demand Full industrialization from Bioenergy & Changing of developing countries Economics Increasing consolidation within food processing
Continuous re-assessment of safe chemicals and materials for F&B and agricultural production
Increasing urbanization impacts the demand for health & wellness solutions beyond BRIC
The Adoption of Safety & Sustainability Strategies will be Common-place as opposed to being the exception
140%
120%
126%
125%
133%
131%
102%
101%
100%
92%
J - 2007
96% 93%
93%
92%
95%
87%
84%
84%
81%
78%
78%
79%
62%
60%
40%
20%
0%
Food Processing Health Care S&P 500 (Total Market) Energy Personal and Household Care Crops Containers & Packaging Paper & Paper Products Chemical Manufacturing
J-2008
J-2009
56%
62%
60%
78%
79%
J-2010
Source: Frost & Sullivan
83%
80%
87%
Price growth has Price growth has abating since its abating since its rapid rise in 2007rapid rise in 20072008 2008 Back to Back to Historical Growth Historical Growth Rates, For Now Rates, For Now Commodity prices Commodity prices are highly are highly correlated with correlated with crude oil prices crude oil prices Likely to Happen Likely to Happen Again Before 2020 Again Before 2020
200
175
150
125
100
75
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
21.2%
12.8%
37.5%
22.3%
5.8%
20.9%
$80.00
Fortified Goods Dairy Fortified Goods Dairy
$70.00
$60.00
$50.00
$40.00
20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 11 20 12 20 09 20 10 20 13 20 14 20 15
Avoiding Bads is Key Megatrend that is Set to Continue Through to 2020 Avoiding Bads is Key Megatrend that is Set to Continue Through to 2020
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Beyond BRIC Beyond BRIC Look for increasing urbanization, Look for increasing urbanization, dietary changes, and economic development in dietary changes, and economic development in emerging markets, especially in Latin America and emerging markets, especially in Latin America and Africa, as these are future growth regions for Africa, as these are future growth regions for Health & Wellness Solutions Health & Wellness Solutions
20 15 10 5 0 0 20
100 80 60 40 20 0 0 20
40 60 80 % of Urban Population
100
40 60 80 % of Urban Population
100
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What is Sustainability?
Optimization of the bottom lines over time
GOAL
Change in Bottom Line
Ec
il esponsib Social R
Time
Social Responsibility
Env iron m
Time
enta l Awa rene
ss
Yesterdays Objective
Todays Objective
In the past, the only metric that a given company really paid attention to and worked toward sustaining was its economic bottom line (EB). Social responsibility (SR) and environmental awareness (EA) were not considered key objectives. This has changed With the growing power of external constituents that demand increasing social and environmental responsibility, companies now must adopt business practices that meet these additional objectives. 13
Barcode # and lack of a bright purple visual marker indicates a safe product
Current work is under development by which the inks can be turned on Activation devices are in final-stage development by the company for use for weigh scales, printing press add-ons, production line systems, Benchtop printers and hand-held devices Barcode # and bright purple visual marker indicates an unsafe product
Source: Frost & Sullivan
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in
marketing
strategies
that
Show that your product is an essential component of the average consumers grocery basket Build brand equity through targeted efforts by Marketing and Sales Company positioning as a partner to help end users through this tough economic time Integration of disparate products into a complete solution
Exploit
opportunities
from
consumer
feedback
Proactively seek the final consumers need set and match product lines to those needs
Establish
partnerships
with
other
suppliers
Seek out joint branding with other food manufacturers to exploit complementary synergies
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Adopt
and
service
Focus on successful product lines and global diversification in order to drive sustainable growth Focus on product innovation as a long term goal for a sustainable competitive edge
Understand
Effectively
16
The Solution Provider: The Marriage of Value-Added Quality Enhancement and Customer Relationship Optimization
Maximize Customer Value by being the Low Cost Provider Enhance Value-Added Quality Valuethrough New Product Development Product Differentiation
Source: Frost & Sullivan
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Next Steps
Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2010: Silicone Valley - A Frost & Sullivan Global Congress on Corporate Growth, September 12-14 2010, Fairmont Hotel, San Jose, CA (www.gil-global.com) Register for the next Chairmans Series on Growth: The GIL (Growth, Innovation and Leadership) Culture: A Critical Element to Long-term Success (Tuesday, June 1) (http://www.frost.com/growth) Register for Frost & Sullivans Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news)
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Christopher Shanahan Industry Analyst Chemicals Materials & Food (210) 477-8419 christopher.shanahan@frost.com
Christine Stapleton Account Manager, North America Chemicals Materials & Food (210) 477-8406 christine.stapleton@frost.com
Shomik Majumdar Vice President, Consulting & New Business (650) 475-4539 shomik.majumdar@frost.com
Sarah Saatzer Corporate Communications Chemicals, Materials & Food (210) 477-8427 sarah.saatzer@frost.com
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