Sprts Nutritin Industry Acrss Different Reginal Markets
Supplements, the gd, the bad & the ugly China Internatinal Sprts Nutritin Industry Summit 2017 September 6 th, 2017 Mr. Jack Sehgal Directr, Business Develpment USA & Internatinal V&H The Winning Cmbinatin 2
Agenda: Intrductin: One size des nt fit all Different reginal blcs Reginal blcs: Blc s tp markets Blc s main channel f distributin Blc s tp cnsumer trends Cmmn grund amng reginal blcs 3
Intrductin: One Size Des Nt Fit All Sprts Nutritin Industry: Dynamic industry with tremendus grwth (market size USD$ 11.9B *1, mst regins grwing at duble digit rates led by China and India) Hetergeneus reginal blcs with clearly distinct features US brand s dminance being erded by reginal brands Glbally, regulatins are mre pen t self medicatin but stricter arund quality and claims FTAs playing a rle in manufacturing and shipping determining which brands can perfrm strngly 1 Eurmnitr Internatinal: Cnsumer Health Vitamins and Dietary Supplements (VDS) Trend And Prspects 2017 4
Intrductin: One Size Des Nt Fit All Distributin Channel/Retailers Channels f distributin are different: US sales strng in the FDMC channel, Mexic in the V&H channel, China in the ecm channel Fcus f retailers is different: US retailers lking t cut dwn n # f brands / China retailers lking t add US Brands / EU retailers lking t find grwth in dmestic brands Apprach f retailers is different: Walmart in Chile called Lider (B2C like in the US) Walmart in India called Best Price (nly B2B whlesale) *1 Eurmnitr Internatinal: Cnsumer Health Vitamins and Dietary Supplements (VDS) Trend And Prspects 2017 5
Intrductin: Glbal Trends Cnsumer Trends Fast paced and unhealthy eating habits giving way t healthier lifestyles (functinal fds / fd n the g) Cnsumptin f supplements increasing acrss mst regins (specially China, India, Latin America, Eastern Eurpe) Mre educated cnsumers (scial media / key influencers / internet) Channels f distributin are being remdeled t cnfrm t the industry and dminant cnsumer shpping trends Cnsumers have different bjectives bdybuilding vs fit / gain mass & fit Incremental sales thrugh lcalized SKUs (ie lcal flavrs r trending active ingredients) 6
Reginal Blcs: Tp Markets Nrth America Eurpe and Russia Asia La5n America US Canada UK Germany Russia China Australia Indnesia Mexic Brazil Chile 7
Nrth America 8
Reginal Blcks: Nrth America Cuntry Ppula5n GDP/capita Obesity Rate Remarks US 326.6M (3 rd ) $57,300 (20 th ) 35% (18 th ) Accunts fr almst tw thirds f glbal sales *1 60% f the market *2 Canada 35.6 (38 th ) $46,200 (34 th ) 30.1% (48 th ) Develped market *1: 1 Eurmnitr Internatinal: Cnsumer Health Vitamins and Dietary Supplements (VDS) Trend And Prspects 2017 *2: Eurmnitr InternaXnal: Cnsumer Health Sprts NutriXn Drivers and Prspects PpulaXn / GDP/Capita / Obesity Rate: CIA Reprts 9
Dminant Channels f Distributin: Nrth America Cuntry V&H FDMC Ecm Remarks US Strng Strngest Grwing Saturated market Lking fr value Canada Strng Strngest Grwing Saturated market Lking fr niche (i.e. N.Z. grass fed) 10
Tp Cnsumer Trends: Nrth America Cuntry Objec5ves Sci-Ecnmic Factrs Remarks US Bdybuilding Fit lifestyle Brand and value driven Trend secer Canada Bdybuilding Fit lifestyle Brand and value driven Higher quality standards 11
Eurpe + Russia 12
Reginal Blcks: Eurpe and Russia Cuntry Ppula5n GDP Obesity Rate Remarks UK 64.8M (22 nd ) $42,500 (38 th ) 29.8% (43 rd ) 42% value share f sales in Western Eurpe *1 PrliferaXn f lcal brands Germany 80.6M (19 th ) $48,200 (30 th ) 22.7% (59 th ) 4 th biggest SN market *1 Stable grwth Russia 142.3M (9 th ) $26,100 (72 nd ) 26.2% (46 th ) Difficult t enter. Embarg. FrEx Lcal brands dminate the market Black market *1 Eurmnitr InternaXnal: Cnsumer Health Sprts NutriXn Drivers and Prspects 13
Dminant Channel f Distributin: Eurpe and Russia Cuntry V&H FDMC Ecm Remarks UK Weak Strng Strngest Ging thrugh a reset New brands dminaxng Germany Weak Strng Strngest Saturated Russia Strng Weak Strngest Lcal brands / Grey imprts 14
Tp Cnsumer Trends: Eurpe and Russia Cuntry Objec5ves Sci-Ecnmic Factrs Remarks UK Bdybuilding Fit lifestyle Value and quality driven PrliferaXn f EU brands Inter EU crss brder trade Germany Bdybuilding Fit lifestyle Value and quality driven PrliferaXn f EU brands Black market Russia Bdybuilding Fit lifestyle Brand r value driven Value driven Black market 15
Asia 16
Reginal Blcks: Asia Cuntry Ppula5n GDP Obesity Rate Remarks China 1.3B (1 st ) $14,600 (112 th ) 7.3% (152 nd ) Obesity in urban areas in excess f 20% PpulaXn size makes this 20% a huge market Australia 23.2M (56 th ) $48,800 (29 th ) 29.9% (44 th ) Fast grwing market / TGA requirements Indnesia 260.6M (4 th ) $11,700 (130 th ) 5.7% (160 th ) Fast grwing market Underrated market with 4 th largest ppulaxn base *1: Eurmnitr InternaXnal: Cnsumer Health Sprts NutriXn Drivers and Prspects PpulaXn / GDP/Capita / Obesity Rate: CIA Reprts 17
Dminant Channels f Distributin: Asia Cuntry V&H FDMC Ecm Remarks China Nn Existent Nn Existent Strngest General trade and CBEC ecm nly way int China Australia Strng Strng Strng Balanced, stable market (few players) Indnesia Strng Grwing Grwing Fast grwing market (few players) 18
Tp Cnsumer Trends: Asia Cuntry Objec5ves Sci-Ecnmic Factrs Remarks China Fit lifestyle US and Eurpean trends Tp western sellers Australia Bdybuilding Fit lifestyle Brand and quality driven Lcally invested brands (TGA) Indnesia Fit lifestyle Brand and value driven Value driven 19
Latin America 20
Reginal Blcks: Latin America Cuntry Ppula5n GDP Obesity Rate Remarks Mexic 124.6M (11 th ) $18.900 (90 th ) 27.6% (23 rd ) Leading reginal market Brazil 207.4M (5 th ) $14,800 (111 th ) 20.1% (102 nd ) Difficult regulatry envirnment & high imprt duxes Fastest grwing market in the regin (sales dubled between 2011 and 2016) Chile 17.8M (65 th ) $24,000 (79 th ) 28.5% (30 th ) Fast grwing market / Niche quality prducts 21
Dminant Channels f Distributin: Latin America Cuntry V&H FDMC Ecm Remarks Mexic Strngest Grwing Weak Stable market heavily distributed in the V&H channel Brazil Strngest Grwing Weak Difficult regulatry envirnment / high imprt duxes Chile Strngest Grwing Weak Fast grwing market / Niche quality prducts 22
Tp Cnsumer Trends: Latin America Cuntry Objec5ves Sci-Ecnmic Factrs Remarks Mexic Fit lifestyle Influenced by prximity f US and NAFTA Chclate duty Brazil Bdybuilding Fit lifestyle Brand and value driven DisprprXnate verpricing f imprted brands Chile Fit lifestyle Brand and quality driven L-CarniXne is very ppular 23
Universal Trend Twards: Clean, Natural, Transparent 24
Natural & Clean: What Experts Say Cnsumers increasingly want t knw the prvenance f their fd; clean labelling is fast becming the nrm. The demand fr prducts cntaining nly a few, mre recgnizable, ingredients and withut additives r preservatives - is likely t cntribute t an increase in prducts that are natural KPMG - Rethinking Life Sciences July 2016 Clean Label Supplements t get healthier via clean label and whle-fd ingredients. And the mvement t remve nn-nutritive ingredients will cntinue apace New Hpe Netwrk 12 Ingredient and Supplement Trends t Lk Out fr in 2017 December 2016 Mainstream brands starting t expand beynd the saturated traditinal Sprts Nutritin categry int Clean Supplements subcategry 25
The Bdylgix Advantage Full label Transparency Each f ur prtein labels features Each f a ur cmplete prtein Amin labels Acid features Breakdwn a cmplete shwing Amin the Acid cmpsixn Breakdwn f shwing Amin Acids the per cmpsixn serving f Amin Acids per serving We believe prducts shuld be as natural as pssible. As a result yu find a minimal amunt f added ingredients in ur prducts s yu are gekng the max yield all the Xme We want yu t be fully infrmed f what yu are pukng int yur bdy. Fr this reasn we have included full transparency in ur labels s yu can see exactly hw much prtein yu are gekng per scp We have idenxfied each prtein surce cntained by breaking dwn the quality and grade 26
Natural and Clean is the SluXn 27
Thank Yu 28