Products and brands aligned with sustainability, value, and wellness have potential in both developed and developing countries, according to Quantifying Megatrends, a webinar held on April 8 by global market research firm Euromonitor International. Euromonitor tracked current and potential consumer spending to help companies understand which trends to focus on, how they differ by geography, which are nascent or maturing, and where to prioritize investment.
Monitoring these megatrends, which illustrate fundamental shifts in consumer behavior, is “crucial for planning product strategies and staying relevant and in touch with what consumers want, but over time,” said Allison Angus, head of lifestyles at Euromonitor.
In first looking at a global picture of where consumers are and will be spending across eight megatrends, Euromonitor reported that the Shopping Reinvented trend will jump to the number 1 spot in 2024, compared to its number-four ranking in 2019, a rise spurred by COVID-19. The trend speaks to a shift to the anytime, anywhere consumer shopping model that includes channels like online, mobile, and social commerce, explained Angus.
Conversely, Experience More, a megatrend that values experience over things, is expected to drop by 2024. The trend is most represented by key industries like travel and foodservice, two areas hit hard by the pandemic and expected to have a slow return to pre-2020 conditions, she said.
Wellness and sustainability remain in the bottom two spots from 2019 to 2024, according to Euromonitor’s ranking, reflecting more limited consumer spending versus other megatrends. But consumers report a growing willingness to spend more in these areas, said Angus, and they are at the forefront of investment priorities for brands. According to Euromonitor data, 35 percent of consumers plan to spend more on health and wellness and 32 percent report buying sustainably produced items.
Euromonitor focused more in depth on three megatrends that are pivotal, particularly due to the impact of the pandemic.
Sustainable Living. Consumers are paying increasing attention to ethics, values, and environmental issues in areas related to sustainability, animal welfare, production and labor practices, and a desire to positively impact communities and people. In terms of geographic opportunity, the biggest markets today are the U.S. and China, followed by France, Germany, and the UK, said Maria Coronado Robles, sustainability insights manager for Euromonitor. Latin America represents the smallest market.
Europe has five of the fastest-growing markets for sustainable living: France, Denmark, Sweden, Spain and Italy, and Australia and Canada are also strong in consumer spending. Emerging Asian countries include China, Malaysia, and Vietnam.
Opportunities by product type vary according to market. Ethical labels on packaged foods and beverages have strong consumer interest in Australia and Spain, while organic products show the most opportunity for consumer spending in Italy, Canada, France, Sweden, and Denmark, said Coronado Robles.
In Asia, packaged foods and beverages with ethical claims show the most opportunity in Vietnam and Malaysia but the market for meat substitutes is strong in China, which accounts for 63 percent of the global market for meat alternatives, she said.
Middle Class Reset. A middle class struggling to maintain its position has resulted in marked shifts in consumer spending. Consumers are reassessing their values to stretch resources, creating less brand loyalty, glorified frugality, and a mindset of selective purchases where the experience or the value is more important that owning an item, explained An Hodgson, Euromonitor’s head of income and expenditure. This megatrend began in developed countries, but the priorities are aligned with those in developing countries as well, she added.
More opportunities for products aligned with Middle Class Reset exist in the Middle East, Africa, and Asia Pacific than in North America and Western Europe, and data shows that China, Nigeria, India, and Indonesia have the greatest potential for growth. Opportunities take the shape of growing private labels in Japan and Indonesia, for example, and consumer spending potential at limited service restaurants in the Philippines and Japan.
Wellness. Consumers are prioritizing heath but with a holistic focus that addresses the needs of the body, mind, and spirit. “They are making healthy consumption choices but allowing for indulgence,” said Angus. It is a trend accelerated by COVID, as consumers not only take more care of themselves but are willing to spend more to do so.
For brands that have wellness positioning, the consumer spending potential is strongest in developed economies like the U.S., Australia, and China. But opportunities abound in Asia as well. Consumers show a growing willingness to spend in Taiwan and South Korea. And health and wellness-oriented foods and beverages have the biggest opportunities in Vietnam, the Philippines, Indonesia, India, and Hong Kong, Angus said.