FMCG

MONITOR
An Integrated View of
Philippine FMCG Market

MAT Q1 2018

Data as of March 25, 2018

National Philippines 1
© Kantar Worldpanel
FMCG MONITOR
INSIDE THIS ISSUE

KEY INDICATORS FMCG TRENDS HOT AREAS RETAIL LANDSCAPE EMERGING TRENDS
GDP grows by 6.8% in PH FMCG sales is Significant growth in Whilst majority of channels Filipino homes continue to
Q1 2018 driven by steady at +2.2% in MAT FMCG seen in South are stable, convenience upsize by purchasing in
Manufacturing, Other March 2018, and Luzon where heavier stores grow through wider bigger sizes
Services, and Trade continues to grow in baskets and more trips reach of homes and higher
basket size are evident. checks

2
 Macro
Economic
Indicators

Philippine economy grew at 6.8% in Q1 2018

Philippines GDP and Inflation Qtr on Qtr Growth

7 7 7 7 7
6.6 6.4 6.5
7
6.6
6.8
6 6 6 6 6

GDP 5

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

4 Source: https://psa.gov.ph/
 Macro
Economic
Indicators

PH GDP growth second fastest across the region

Asia GDP Quarterly Growth (Q1 2018 vs. YA)

6.8 7.4
6.8

5.1 5.4

3.0

Philippines Indonesia Malaysia Vietnam Taiwan China

Sources: https://psa.gov.ph/ https://www.indonesia-investments.com/

5 http://english.vov.vn/economy/ https://www.reuters.com/a
https://www.straitstimes.com/business/ https://www.bsp.gov.ph
 Macro
Economic
Indicators

GDP growth is driven mainly by the services and Growth

INDUSTRY
industry sectors Rate
AGRI., HUNTING, FORESTRY AND FISHING (8.6%) 1.5
Agriculture & Forestry 2.4
PH GDP Quarterly Growth (Q1 2018 vs. YA) Fishing -3.7
INDUSTRY SECTOR (34.5%) 7.9
Mining & Quarrying 7.7 4.5
6.8 Manufacturing 8.0
5.9 Construction 9.3
5.1 Electricity, Gas and Water Supply 6.0
SERVICE SECTOR 4.0 (56.9%) 7.0
Transport, Storage & Communication 6.4
Trade and Repair of Motor Vehicles, Motorcycles,
6.1
Personal and Household Goods
Financial Intermediation 7.6
Real Estate, Renting & Business Activities 4.7
Philippines Indonesia Malaysia Thailand
Public Admin Vietnam
& Defense; Compulsory Social Security 13.2
Other Services 8.8

6 Source: https://psa.gov.ph/
 Macro
Economic
Indicators

Inflation continues to rise this Q1 2018 and is the highest over the past three years, coinciding with
the Tax Reform for Acceleration and Inclusion (TRAIN) Law

Philippines GDP and Inflation Qtr on Qtr Growth

7 7 7 7 7
6.6 6.4 6.5
7
6.6
6.8
6 6 6 6 6

GDP 4.7
5
4.1 4.3
3.6 3.4
3.8
Inflation 2.4 2.3 2.5
3.1 3.1 3.1

1.7 1.5
1 1.1
0.6

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

7 Source: https://psa.gov.ph/
 Macro
Economic
Indicators

Coupled with rising inflation is the higher exchange rate this Q1 2018; There is also a decline in
jobless rate, but higher underemployment rate in the Philippines.

Inflation Rate Peso-US Dollar Exchange Rate (Php)

4.0 3.8 60.0
3.0 55.0
50.0 51.5
2.0 45.0
1.0 40.0
35.0
0.0 30.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2016 2016 2016 2017 2017 2017 2017 2018 2016 2016 2016 2016 2017 2017 2017 2017 2018

Unemployment Rate Underemployment Rate

9.0 30.0
5.3 20.0 18
4.0 10.0
0.0
-1.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2016 2016 2016 2016 2017 2017 2017 2017 2018 2016 2016 2016 2016 2017 2017 2017 2017 2018

8
 Macro
Economic
Indicators

With continued rising inflation, total household expenditure tapers off in the latest quarter

Philippines GDP, Inflation and Household Final Consumption Expenditure Qtr on Qtr Growth

8.6 8.7
7.9 7.7
7.4 7.3
HH 7 7 7.1 7 7 7 7 7 6.8
6.4 6.6 6.4 6.5 6.6
Expenditure 6 6 6 6.1
6 6
6.3
5.9
5.7 6.1 5.6
GDP 5 5.3
4.7
4.1 4.3
Inflation 3.6 3.4
3.8
3.1 3.1 3.1
2.4 2.3 2.5
1.7 1.5
1 1.1
0.6

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Source: https://psa.gov.ph/
 Macro
Economic
Indicators

Slower growth most pronounced in spending for alcoholic beverages and tobacco but also seen in
Food and Non-Alcoholic Beverage as well as Transportation

HOUSEHOLD FINAL CONSUMPTION EXPENDITURE %CHANGE (at constant prices)

2015 2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
HH FINAL CONSUMPTION EXPENDITURE 6.0 6.2 6.1 6.4 7.1 7.5 7.2 6.2 5.8 5.9 5.3 6.2 5.6
1. Food and Non-alcoholic beverages 5.0 6.5 5.3 6.5 6.4 7.4 8.4 5.6 5.7 6.2 4.3 5.6 4.6
2. Alcoholic beverages, Tobacco 15.9 0.6 3.9 6.9 6.5 6.6 6.9 4.2 -1.2 1.2 -7.0 -7.6 -10.5
3. Clothing and Footwear -12.2 -4.9 4.4 5.2 -4.4 -2.1 -4.5 -1.9 6.7 0.1 -0.9 -0.2 2.9
4. Housing, water, electricity, gas and other fuels 4.1 4.6 -0.5 -0.2 10.5 7.0 5.0 5.9 5.6 6.3 6.3 9.5 7.8
5. Furnishings, household equipment and routine
household maintenance 3.5 1.6 1.7 3.3 6.9 2.2 1.1 1.7 2.5 3.3 12.0 10.5 7.6
6. Health 8.9 9.0 8.0 7.4 9.7 6.2 7.4 6.2 5.6 5.5 4.3 4.6 6.0
7. Transport 15.1 10.7 10.1 7.5 6.9 10.8 12.7 12.4 7.1 7.1 2.8 2.2 1.7
8. Communication 5.2 5.6 10.3 11.0 5.1 6.0 1.0 5.1 1.7 1.2 5.1 6.0 7.5
9. Recreation and culture 12.2 11.9 3.1 8.2 8.8 14.8 4.8 3.2 -0.6 -1.3 0.7 5.3 5.7
10. Education 6.2 2.1 1.5 0.8 4.1 9.1 8.0 7.7 10.5 8.2 12.0 6.8 9.6
11. Restaurants and hotels 9.1 7.7 11.5 11.6 9.5 9.0 5.9 6.2 7.8 11.2 9.8 9.5 7.6
12. Miscellaneous goods and services 3.8 6.4 11.9 9.2 8.2 6.8 5.4 8.2 6.8 5.4 6.4 7.8 8.3

10 Source: https://psa.gov.ph/
 Macro
Economic
Indicators

Multiple disruptions occurred throughout Q1 2018 affecting public transportation in the Philippines

“Piston mounts 4th transport strike” “Electrical failure disrupts MRT-3 operation”

“MRT-3 train offloads riders due to “Piston to hold trasnport strike against
signaling error” jeepney phaseout on March 19”

“Power supply failure due to intertwined “MRT-3 caps day with another glitch affecting
wires – MRT-3 report” 80 passengers”

“’Door failure’ forces 1,000 passengers to “’Electrical failure stops MRT train; 750
get off from MRT-3 train” passengers offloaded”

Sources:
11 http://newsinfo.inquirer.net
Httpss://www.rappler.com
PH FMCG OVERVIEW

12
 Macro
Economic
Indicators

Growth of in-home FMCG value sales picks up in Q1 2018, but is just stable versus Q1 2017

Philippines GDP, Inflation and Household Final Consumption Expenditure Qtr on Qtr Growth

11 12
11
10

HH
7 7 7 7 7 7 6.8
Expenditure 6 6
8.7 6 6 6 7
6.6 6.4 6.5
8.6 6.6
7.9 4.7 7.7 5
GDP 4.1 4.3 7.1 7 7 7.4 7.3
3.6 5 6.4 5 3.4 3.8
6.1 6.3 3.1 3.1
5.9 3.1 6.1
2.4 4 2.3 5 2.5 5.7 5.3 5.6
Inflation 3 1.7
1 1.1 1.5
2.2
0.6 1
2 0
1.2

FMCG In-home -3
Purchase -4
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Source: https://psa.gov.ph/ FMGC Growth is in MAT

 FMCG
Overview

Purchasing Konfidence continues to improve quarter on quarter, and is now stable vs 2017, though
homes remain to be pessimistic with their overall FMCG spending

Purchasing Konfidence Qtr on Qtr

2 2
1 1
-2 -3
-4
-5

-9 -10 -9
-11
-12

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

Purchasing Konfidence is a quarterly report that gives you an indication on the degree of optimism
14 that Filipino Urban households are expressing. This is done by looking at their attitude regarding
the current and future economic situation and their real behaviors in FMCG spending.
 FMCG
Overview

15
Q1 2017 Purchasing Konfidence
 FMCG
Overview

In-home FMCG volumes continue to grow though slower than last year

FMCG MAT Growth Rates

15.9 17.0 16.1 15.0

13.6
11.4 10.7
9.9 8.8
7.6 7.3
5.3 6.0
4.6
3.0 1.9 2.2
1.1

-4
-5 -6
-7 -7 -8 -8 -8
-8
MAT MAR MAT JUNE MAT SEPT MAT DEC MAT MAR MAT JUNE MAT SEPT MAT DEC MAT MAR
2016 2016 2016 2016 2017 2017 2017 2017 2018

16 Please read volume data with caution given varying unit of measure
 FMCG
Overview

Bigger trip sizes continue to be the main driver of FMCG volume growth

FMCG Growth Drivers (MAT Rolling)

17
 FMCG
Overview

All mega-sectors posted stable sales and average price save for Beverage
FMCG Mega-Sector Growth (MAT March 2018 vs. YA)

Value Price

2 4 2 3 4 4
1

-4 -3
-9

TOTAL FMCG FOOD BEVERAGE PERSONAL CARE HOUSEHOLD CARE

% Value Contribution to Total

FMCG (MAT March 2018) 56% 18% 17% 9%

18
 FMCG
Overview

Higher average price and in-home spending for FMCG vs YA with the implementation of TRAIN Law in Q1 2018
Quarterly Growth Rates vs YA
FOOD BEVERAGE
12.0 Price per Volume Value Sales
9.0
8.0 4.0
4.0 -1.0
-6.0
0.0
-11.0
-4.0 -16.0
JUN 2016 SEP 2016 DEC 2016 MAR 2017 JUN 2017 SEP 2017 DEC 2017 MAR 2018 JUN 2016 SEP 2016 DEC 2016 MAR 2017 JUN 2017 SEP 2017 DEC 2017 MAR 2018

PERSONAL CARE HOUSEHOLD CARE

16.0
15.0
12.0
8.0 12.0
4.0 9.0
0.0 6.0
-4.0 3.0
-8.0 0.0
JUN 2016 SEP 2016 DEC 2016 MAR 2017 JUN 2017 SEP 2017 DEC 2017 MAR 2018
JUN 2016 SEP 2016 DEC 2016 MAR 2017 JUN 2017 SEP 2017 DEC 2017 MAR 2018

19
 FMCG
Overview

Among the Top FMCG categories, breads, laundry powder and milk powder post significant growth in
spend, while the rest save for sugars and laundry bar are stable versus last year
Top 10 FMCG Categories Performance
Value Price
%Change – MAT March 2018 vs YA

15

7
5 5 4 5 4
2 2 2
1 0

-1 -1
-2
-4 -4 -3 -3
-6 -7
-8
TOTAL FMCG Breads Snacks Instant Biscuits Shampoo Laundry Sugar/Other Milk Powder Softdrink Laundry Bar
Coffee Powd Powder Sweeten.

21 Category Ranking based on Consumer Reach Points (Penetration x Frequency x HHs)

 FMCG
Overview

Lower average price cuts across regions save for NL. SL on a rise through heavier baskets and more trips

FMCG Growth by Region (MAT March 2018 vs. YA)

% Change in Value (Value share to Total PH)
NORTH
LUZON Average Price Spend per Buyer Frequency Spend per Trip
(20.6%) +3 (Php)/(Kg/L/Pcs) (Php) (Php)

43.30 32,607 395.1 82.5

NCR ALL HOUSEHOLD 39.80 33,454 394.5 84.8
SOUTH
+0 (15.4%)
LUZON
38.40 33,536 390.3 85.9
(22.4%) +7 37.40 37,849 359.6 105.2
NCR 36.20 37,472 372.5 100.6
34.90 36,904 375.9 98.2
40.60 29,317 361.7 81.1
NORTH LUZON 37.30 31,186 353.4 88.2
VISAYAS
-1 (19.2%) 38.20 31,410 342.1 91.8
48.40 32,256 402.7 80.1
SOUTH LUZON 44.50 32,520 400.9 81.1
41.60 34,095 403.2 84.6
38.90 32,798 393.2 83.4
VISAYAS 35.50 35,028 412.4 84.9
33.30 33,947 406.2 83.6
MINDANAO
+2 (22.4%) 51.50 32,750 443.0 73.9
MINDANAO 46.30 32,778 426.0 76.9
43.90 32,651 419.5 77.8
MAT March 2016 MAT March 2017 MAT March 2018

Significant growth > = 5%

22 Stable
Significant decline < = -5%
 FMCG
Overview

Lower average price and stable performance seen across all SECs though slight dip among ABC homes

FMCG Growth by SEC (MAT March 2018 vs. YA)

% Change in Value (Value share to Total PH)
Average Price Spend per Buyer Frequency Spend per Trip
(Php)/(Kg/L/Pcs) (Php) (Php)

43.30 32,607 395.1 82.50

ALL HOUSEHOLD 39.80 33,454 394.5 84.80
38.40 33,536 390.3 85.90
-3
ABC (13.8%)
34.50 47,128 308.2 152.90
ABC
Class ABC 32.60 47,673 307.1 155.20
31.20 45,574 308.7 147.60

43.30 33,064 399.3 82.80

+2 Class D 39.70 33,782 397.2 85.10

38.70 33,969 394.7 86.10
D
(62.1%)
51.30 26,480 417.1 63.50
Class E 46.40 27,709 419.6 66.00
+4 +7 E 43.20 28,339 409.6 69.20
(24.1%)
MAT March 2016 MAT March 2017 MAT March 2018

Significant growth > = 5%

23 Stable
Significant decline < = -5%
 FMCG
Overview

Main channels Hyper+Super and Traditional Trade post stable performance while growth is seen only
in Convenience Stores
FMCG Growth by Channel (MAT March 2018 vs. YA) Annual Value Contribution of Channels
% Change in Value

TOTAL CHANNELS +2

Traditional Trade
TRADITIONAL TRADE* +1 47 46 45
Hyper-Super
Grocery
HYPER/SUPERMARKETS +3 Drug Store
Direct Sales
GROCERIES +1 CVS 31
30 30
Dept. Store
DRUG STORES -6 Personal Care Store
7 7 6
Gifting 5 4
4 2 2
Others 2 4 5
DIRECT SALES +0 4
6 6 7

CONVENIENCE ST. +17 MAT Mar 2016 MAT Mar 2017 MAT Mar 2018

Significant growth > = 5%

25 *Traditional Trade = Sari-Sari Stores + Market Stalls Stable
Significant decline < = -5%
 FMCG
Overview

Among major retailers, Puregold and Robinsons post double-digit growth

FMCG Performance by Retailer Top 5
Value Share% % Change in Value –
in FMCG -20.0 0.0 20.0
MAT March 2018 vs YA
40.0 Key Retailers

TOP 5 RETAILERS 14% 2 Penetration

stable

3.9% 11
Spend per
Buyer stable

3.2% 2

2.6% -5 Trips
stable

2.4% -5 stable
Spend per
Trip
1.8% 25
Significant growth > = 5%
28 Stable
Significant decline < = -5%
 FMCG
Overview

Growth of Robinsons and Puregold can be attributed to strong promotion efforts in Q1 2018

Sources:
29 http://newsinfo.inquirer.net
Httpss://www.rappler.com
 EMERGING
TREND: THE
BIGGER, THE
BETTER

30
 Emerging
Trends

Homes continue to buy bigger sizes of their FMCG purchases

FMCG Growth Drivers (MAT Rolling)

31
 Emerging
Trends

BIGGEST GAINERS
TOTAL
Upsizing most prevalent in the beverage category +17%
BEVERAGE

COFFEE
+14%

Growth in Vol/Trip
POWDER

POWDERED
+18%
TEA
+700 ML
per trip +12%
POWDERED
CHOCOLATE

Data used is as of MAT December 2017

32 Vol/Trip growth considered upsizing if Vol/Buyer is increasing or stable
 Emerging
Trends

UPSIZING IN OTHER CATEGORIES

Bigger packs seen for food staples such as instant noodles, cooking oil, and cereals and oatmeals

Volume/Trip Growth
Instant Noodles +6%
Cooking Oil +6%
Cereal/Oatmeal +12%

Data used is as of MAT December 2017

33 Vol/Trip growth considered upsizing if Vol/Buyer is increasing or stable
 Emerging
Trends

UPSIZING IN OTHER CATEGORIES

Heavier baskets seen for home care and personal care particularly dishwashing aides, multipurpose cleaners,
rubbing alcohol, and hair conditioner

Volume/Trip Growth
Dishwashing Aides +10%
Multipurpose Cleaners +15%
Rubbing Alcohol +11%
Hair conditioner +5%

Data used is as of MAT December 2017

34 Vol/Trip growth considered upsizing if Vol/Buyer is increasing or stable
 Emerging
Trends

THE UPSIZERS
Bigger pack sizes most common in VisMin, among Class DE, and Homes with Kids and Teenagers

Homes with Kids

Visayas Class DE and Teenagers
Mindanao

35 Data used is as of MAT December 2017

Kantar Worldpanel is the global expert in shoppers’
behavior. Through continuous monitoring, advanced
analytics and tailored solutions, Kantar Worldpanel inspires
successful decisions by brand owners, retailers, market
analysts and government organizations globally.

With over 60 years’ experience, a team of 3,500, and

services covering 60 countries directly or through partners,
Kantar Worldpanel turns purchase behavior into competitive
advantage in markets as diverse as FMCG, impulse
products, fashion, baby, telecommunications and
entertainment, among many others.

The Philippine household panel started operations in 2001,

covering Urban Philippines only with 2,000 respondents.
Aiming to capture behavior of total Philippines, we expanded
to cover rural in 2005, through an additional 1,000 homes.

Today, our panel has a total of 3,000 sample covering more

than 80 FMCG categories, across 4 megasectors namely,
Food, Beverage, Household and Personal Care.

CONTACT US
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