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Analysis

Consumer products M&A update: Q3 2017

Men are becoming unexpected consumer influencers in the millennial buyer group as the ongoing effort to bring traffic to brick-and-mortar retail takes on a new twist with Amazon’s acquisition of Whole Foods and the growing implementation of beacons to attract in-store customers. This 'Consumer products M&A update: Q3 2017' provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the consumer products industry.

Consumer products trends

  • Tomorrow’s organic parents1: 25 percent of the millennials in America are parents, but that number is expected to increase to roughly 80 percent in the next twenty years. Millennial parents already account for the largest group of organic buyers in America and their interest in purchasing organic products will likely be passed along to their children and become engrained in their families, continuing to drive the growth of a $50.0 billion industry to a $320.5 billion industry by 2025.
  • Men are retail influencers2: Millennial men are 50 percent more likely to be consumer influencers than millennial women. Research indicates that men between the ages of 25–39 years old are increasingly recommending beauty, apparel, and household products. As a result, they are 69 percent more likely than all other men to be influencers in the beauty category, leading to additional sales both online and offline in the beauty and retail categories.
  • Amazon and grocery3: Until now, brick-and-mortar food retail has been spared from disruption by Amazon, but that is set to change with Amazon’s recent acquisition of Whole Foods. Adding over 450 brick-and-mortar stores along with 11 distribution centers, Amazon will be able to use its data collection practices to learn about consumers taste preferences more aptly than any current restaurant rewards program. Coupled with Amazon meal kits, Amazon is set to make a splash in the food industry.
  • Move to beacons4: To counter online shopping trends, retailers such as Macy’s and Lord & Taylor have been implementing beacons to incentivize consumers to visit the store. Beacons are low-energy Bluetooth devices that are used to offer location-based promotions. Per ABI Research, roughly 400 million beacons will be deployed by 2020, compared to about 3.5 million in 2016, lead by key software players Google and Apple, with their Eddystone and iBeacon offerings.

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References

1 “Today’s millennial: Tomorrow’s Organic Parent,” Food Industry Executive. September 14, 2017.
2 “In a pendulum swing, millennial men take on the role of key consumer influencers,” September 7, 2017.
3 “Restaurants face digital dilemma,” Fortune. June 9, 2017.
4 “Digital trends in the retail channel,” Deloitte. July 2017.

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