future demographics of apac consumers: purchasing vitamins and dietary supplements

THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS CMA ANNUAL CONFERENCE, 2015

EMILY COX, RESEARCH ANALYST

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THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

CONSUMER HEALTH GLOBAL OVERVIEW

SNAPSHOT OF AUSTRALIA

ASIA PACIFIC PERFORMANCE

DEMOGRAPHIC DEVELOPMENTS

FUTURE PROSPECTS

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Consumer Health

US$210.8 billion

OTC Healthcare

US$98.2 billion

VDS

US$88.3 billion

Weight Management

US$13.7 billion

Sports Nutrition

US$10.6 billion

US$210.8 billion retail sales globally in 2015

Consumer Health 2015 Global Overview THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

3.7% value

CAGR in vitamins and dietary supplements (VDS) from 2010-2015

42% of consumer

health revenue comes from VDS sales

CONSUMER HEALTH GLOBAL OVERVIEW

SNAPSHOT OF AUSTRALIA

ASIA PACIFIC PERFORMANCE

DEMOGRAPHIC DEVELOPMENTS

FUTURE PROSPECTS

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37%

41%

15%

7%

Consumer Health: Category Breakdown 2015

VDS

OTC

Sports Nutrition

WeightManagement

A$2.1 billion VDS market

8% CAGR from 2010-

2015

Surging Asian

demand

Perceived high-quality,

efficacy

Dominated by local players

Snapshot of Consumer Health in Australia: 2015 THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

CONSUMER HEALTH GLOBAL OVERVIEW

SNAPSHOT OF AUSTRALIA

ASIA PACIFIC PERFORMANCE

DEMOGRAPHIC DEVELOPMENTS

FUTURE PROSPECTS

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Asia-Pacific vs the Rest of the World THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

• 45% of global vitamins and dietary supplements revenue comes from Asia-Pacific

Asia Pacific Australasia

Eastern Europe

Latin America

Middle East

and Africa

North America

Western Europe -2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

20

10

-20

15

% C

AG

R

Vitamins and Dietary Supplements Market Value in 2015 (US$ billion)

Vitamins and Dietary Supplements 2010-2015 % CAGR (US$)

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APAC: Forces Driving Growth THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

Expansion of the retailing environment

Consumer health

solutions based on the environment

and hectic lifestyles

Convenient health

solutions

Health needs of the young

vs the old

The beauty of a healthy

body

CONSUMER HEALTH GLOBAL OVERVIEW

SNAPSHOT OF AUSTRALIA

ASIA PACIFIC PERFORMANCE

DEMOGRAPHIC DEVELOPMENTS

FUTURE PROSPECTS

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The Ageing Population Fuels Growth in VDS THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

Minerals 5.6%

Multivitamins 4.2%

Tonics and bottled nutritive drinks 2.1%

Single vitamins 3.2%

Combination dietary supplements 10.5%

Herbal/traditional dietary supplements 6.5%

Supplement nutrition drinks 9.6%

Fish oils/omega fatty acids 3.9%

Fastest ageing

rates (65+ years)

2010-2020:

China 69%

Singapore 64%

Malaysia 60.6%

Philippines 54.4%

Hong Kong 49.7%

Categories Influenced by the Needs of Ageing Consumers 2010-2015 % CAGR

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0

50000

100000

150000

200000

250000

Population aged 65+: Size

2010

2015

2020

Population Aged 65+ Rapidly Increasing THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

0%5%

10%15%20%25%30%

Population aged 65+: Percentage

2010

2015

2020

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Family

Future

Image

The Importance of Middle Class Consumers THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

Middle Class Potential

Median Income

+

Medium Income Gain

+

Middle Class Size

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The Middle Class in APAC THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

CONSUMER HEALTH GLOBAL OVERVIEW

SNAPSHOT OF AUSTRALIA

ASIA PACIFIC PERFORMANCE

DEMOGRAPHIC DEVELOPMENTS

FUTURE PROSPECTS

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Asian Exports, Australian Examples: Swisse Wellness/Blackmores THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

Swisse Wellness

Leading VDS player in Australia

Expansion plans in the American, European, Latin American and Asian markets

Sold to Hong Kong-listed company Biostime for A$1.67 billion in 2015

Blackmores

Leading Australian-owned VDS company operating in Asia-Pacific

Expansion in Malaysia, Thailand, Hong Kong, Singapore, Taiwan, Korea, China, Macau and Cambodia

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Changing Regulations in Asia Pacific THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

China

• Food Safety Laws implemented in 2015

• Increased regulations for manufacturers

Japan

• New food labelling system launched in 2015

• Deregulation of food labelling

ASEAN

• Push to harmonise regulations surrounding VDS

• Labelling, manufacturing standards and ingredients

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China: World’s largest middle class

India: Robust income gains

Indonesia: Increasing purchasing power

The Philippines: Stable economic growth

Emerging Markets with the Strongest Middle Class Potential THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

China

Philippines Indonesia

India

0

20

40

60

80

100

120

8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

Med

ian

inco

me

real

gro

wth

O

ver

the

20

15

-20

30

per

iod

, %

Median income in 2030, US$ per household

Top 4 Emerging Markets with the Best Middle Class Potential: 2015-2030

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Final outlook for APAC THE VERY BEST OF HEALTH: FUTURE DEMOGRAPHICS OF APAC CONSUMERS

Ageing population

Rising middle class

Urbanisation

Demand for branded, international offerings

Free trade agreement

Australia’s reputation overseas

Authenticity of Australian brands

Lack of extensive Traditional Chinese Medicine

0%

10

%2

0%

03

00

60

09

00

1,2

00

1,5

00

CA

GR

20

15

-20

20

US

$ m

illio

n

VDS Absolute Retail Value Growth and % CAGR 2015-2020 (US$)

Absolute Retail Value Growth (US$ mil) 2015-2020% CAGR 2015-2020

7,578 US$

Regulation

THANK YOU FOR LISTENING

Emily Cox

Research Analyst

Euromonitor International

www.euromonitor.com

emily.cox@euromonitor.com

+61 (0)2 9581 9213