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1、Consumer Pulse SurveyA D R I N K T O H EAL T H|J U L Y 2 0 2 3I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R TExhibit 2 but among people who drink a packaged beverage,NHBs are purchased far more frequently than any other analyzed beverage categoryPercent of people who have
2、 consumed in the last 12 months and purchase that type of beverage at least 2-3 times per monthThe Survey2Exhibit 1 Of categories assessed,NHBs have least penetrated the general population Percent of people who have consumed in the last 12 months91%Packaged Water76%100%Juices45%Cold,BrewedCoffeeBeve
3、rage40%EnergyDrink(excludingCoffee or Tea)33%NHB64%FlavoredWater88%NHB64%Packaged Water60%Flavored Water58%100%JuicesFor a market led by a few massive,multi-brand corporations,the U.S.non-alcoholic beverage sector isremarkably dynamic.Consumption of carbonated soft drinks and other sugar-sweetened b
4、everages hasbeen in steady decline since the mid-1990s1,replaced by increased consumption of a wide range ofhealthier beverage alternatives and bottled water.To capitalize on this shift,a proliferation of new beveragetypes,flavors,brands,and packaging pops up on grocers shelves each year,often produ
5、ced by upstartcompanies with a mission to innovate and disrupt.The space in consumers shopping carts oncecommanded by flagship brands from large global companies is now being filled with products featuringunique ingredients,serving new occasions,utilizing alternative channel distribution,and priorit
6、izing moresustainable packaging.While the market extends into new categories and smaller,more agile companiescommandeer market share from major corporations,the drinks attaining consumer adoption begin a virtuouscycle that includes increased distribution,larger marketing budgets,and attractive finan
7、cialspositioningthem for further organic growth and,potentially,eventual acquisition by a financial sponsor or a strategichouse of brands.The key to success is,as always,understanding consumer behavior with respect to howtheir beverage consumption is evolving.A Drink to HealthNO PART OF THIS MATERIA
8、L MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 As part of the ongoing Lazard/CH ConsultingAdvisorsConsumerPulseSurveyseries,wesurveyed consumers about their beverage choiceswith an eye to uncovering emerging trends
9、that areimpactingbothcurrentandfuturemarkets.Wesurveyedademographicallyproportionateaudience of more than 1,000 Americans on howtheypurchaseandconsumenon-alcoholicbeverages,how those habits have changed in thelast year,and what they look for when choosing anew product.Our research focused on purchas
10、eandconsumption ofpackagedwater2,flavoredwater,100%fruit and vegetable juice,and thegrowing category of natural healthy beverages3(NHBs).Overall,each of these beverage categories remainsstrong,withportionsofthepopulationbothpurchasing and consuming frequently.However,digging into the specific consum
11、er behavior aroundeach beverage category yields insights into marketstability,growth potential,and how investors andbrands may be able to capitalize on the opportunitypresented by the different product groups.Forexample,it may be intuitive that categories likepackagedwaterandjuicehavethebroadestpene
12、tration4(Exhibit 1),but the fact that far moreconsumers of NHBs make purchases multiple timesper month indicates a more engaged,and,as weshall see,younger customer base(Exhibit 2).Gen Z/MillennialC O N S U M E R P U L S E S U R V E YYoung and“Less Young”Beverage CustomersThe beverage buying habits o
13、f Millennial and Generation Z consumers(those born after 1981)differstarkly from older consumers in purchase frequency,beverage package size,and new product trial.Unsurprisingly,younger consumers experiment more than their older counterparts in the emerging NHBcategory.However,our research also show
14、s that a higher proportion of younger consumers are frequentpurchasers of all types of packaged beverages.While the stereotypical image of a young adult may be ofa budget-constrained and eco-conscious consumer,we find that this cohort is highly engaged with thebeverage category(Exhibit 3).In fact,no
15、t only are younger consumers buying more beverages,theirconsumption of packaged drinks is increasing faster than members of Generation X and older(Exhibit 4).Gen X+Packaged Water100%JuicesFlavored WaterNHBExhibit 3 Gen Z and Millennial consumers purchase more packaged beverages than older consumers,
16、belying the assertion that younger consumers purchase less due to budget and environmental concernsFrequent purchase(2-3x per month),by beverage type and generationExhibit 4 Younger consumers rate of purchase is increasing faster than older consumersPercent of people saying purchase rate of beverage
17、 is changing,by generationMore frequentlyAbout the sameLess frequentlyGen Z/Millennial46%42%12%Gen X+64%27%9%76%50%51%41%54%32%21%49%3NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M
18、 E R P U L S E S U R V E YYounger consumers are far more likely to purchase individually packaged,single-serving drinks acrossbeverage types.Whether due to a proclivity for experimentation,differentiated marketing or distributionchannels aimed at younger consumers,product packaging and pricing,or sm
19、aller households,thesesmaller package sizes translate into more frequent purchases,which,in turn,allow these consumers toexplore new brands,flavors,and functional benefits more often(Exhibit 5).Though brand loyalty remainshigh across generations and beverage types,this willingness to try other optio
20、ns opens the door for newproducts and provides manufacturers and retail merchants an impetus to continuously introduce varietyinto their offerings to satisfy customers interests(Exhibit 6).Exhibit 5 Frequency of use and purchase,by generationPercent of people saying purchase rate of beverage is chan
21、ging,by generationGen Z/MillennialGen X+Gen Z/MillennialGen X+Purchase an individually packaged beverage to drink right awayTry a new flavor,brand,or functional beverage58%32%42%68%56%44%29%71%WeeklyMonthlyMonthlyExhibit 6 Brand is important across generations and product categories“Of the beverages
22、 in each category that you purchase,what percentage is from the same brand?”Gen Z/MillennialGen X+26%37%36%19%27%54%27%25%48%22%33%45%NHBWaterFlavoredWater100%Juice75%or more of my purchases are from one brand50-75%are from one brandLess than 50%of are from one brandBeveragepurchasinglargelyremainsi
23、ntraditional grocery,club,and mass channels forall generations of consumers.However,asmore and more commerce across all consumercategoriesconvertstoonlineordering,beverages are following suit.Just as Millennialsand Gen Z are the most prominent cohortleading online purchasing in generalwith someestim
24、atesstatingover60%oftheirtotalpurchases are made over the internetthesegenerations continue to be the most prominentcohort for online beverage transactions as well(Exhibit 7).Exhibit 7 Younger consumers are 70%of the market for purchasing beverages through online channels“Where do you most frequentl
25、y purchase your beverages?”Percent of people choosing channel,by generationGen X+Gen Z/Millennial61%39%70%30%23%29%49%23%31%46%4Grocery and clubAmazon and other onlineNO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT
26、OF LAZARD LAZARD 2023 OtherC O N S U M E R P U L S E S U R V E YOne thing that youngerandolderconsumerscontinuetohaveincommon is their relianceon coffee and tea for theirmorningpick-me-up.5Despite the wide range ofalternativebeveragesavailable to consumers tostart their day,traditionalbeverages stil
27、l hold thelions share of the market(Exhibit 8).Exhibit 8 Morning pick-me-upPrimary drink of choice for occasionNatural Healthy BeveragesThe category of natural healthy beverages(NHBs)has emerged as a true contender over the pastdecade,competing against existing functional or energy drinks with a pro
28、mise of fewer ingredients butadditional functional benefits provided naturopathically thanks to superfoods,pre-and pro-biotics,andinfusedbotanicals.The InternationalFoodInformation Council(IFIC),anonprofiteducationalorganization promoting science-based information on nutrition,lists wellness drinks
29、as its number onefood trend for 2023,writing:“Wellness will continue to be top-of-mind for many consumers,but it willincreasingly come in liquid form,driven in large part by consumers looking for added benefits.”6Thesecond trend cited by the IFIC is a focus on digestive health,with beverages viewed
30、as a deliverysystem for pro-biotics and pre-biotics.According to our survey,digestive health is the second mostcommon benefit sought by consumers,behind only immunity support(Exhibit 9).Exhibit 9 NHB:Most important health benefitsPercent of people selecting benefit as one of their top three reasons
31、for purchase61%52%44%37%28%26%20%15%8%ImmunityBoostDigestiveHealthAnti-OxidantBoostOptimalHydrationNaturalCleansingPropertiesIncreasedVitalityMemoryFunctionSkin Healthand ToneFertilityBenefitsGen X+Gen Z/MillennialCoffee/TeaJuiceEnergy or Functional Drinks565%12%6%17%61%8%8%23%Gen Z/MillennialGen X+
32、NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S U R V E YWith product or brand names that includetermslike“remedy,”“tonic,”and“adaptogenic,”NHB companies may alsobe
33、targeting consumer needs that wouldotherwise be met by herbal supplementsinpillorcapsuleform.OfNHBconsumerswhosefrequencyofconsumptionisincreasing,60%saythose drinks are replacing supplements.Itis not surprising that NHB consumerspursuehealthydietaryandlifestylechoices,and,because they are oftenview
34、ed as a health product first andrefreshingbeveragesecond,manyconsumers are willing to accept flavorsthat they find less appealing(Exhibits 10-11).Exhibit 10 Purchase RationaleReasons for NHB purchase among frequent purchasers68%55%49%25%For overallhealthbenefitsAs a vitamin ornutritionalsupplementFo
35、r the specificbenefit of thisproduct(e.g.,gut health)Because I likethe tasteExhibit 11-Drinkers of NHBs are psychographically different from other beverage drinkers in that they are much more health conscious and willing to forego taste for healthPercent of frequent purchasers agreeing with the foll
36、owing statement(selecting top two boxes on a 1-7 agree/disagree scale)19%21%8%23%18%15%26%17%22%79%70%45%Im willing to eat or drink things that arehealthy even if they dont taste goodI stick to a healthy,natural dietI exercise or participate insports activities frequentlyPackaged Water100%JuicesFlav
37、ored WaterNHB6NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S U R V E YAlthough NHBs are the least penetrated ofthese beverage categories,the consumerswho have disco
38、vered these drinks and havemade them part of their diet apparently feeland appreciate the benefits offered by thesedrinks.Not only are they purchased morefrequently,butpurchasesbyexistingcustomers are increasing more rapidly thanthe frequency of other beverage categories.Thistrendismostnoticeableamo
39、ngyounger consumers,who constitute over50%of frequent NHB consumers despiteonly being about 30%of the adult U.S.population.One reason for the continued increase inusageandpenetrationisthatnewergenerations of NHBs are being engineeredto taste better.The natural evolution of anynew technology or produ
40、ct category is tofocus first on functionality to capture earlyadopters,and then to improve iteratively onhedonics to broaden the categorys appeal.Consider the journey that diet sodas tookfrom the mid-1970s through the introductionof drinks that were marketed on the promisethat the consumer would no
41、longer have tocompromise on taste.The NHB category isnow in a similar phase of development,when taste will be a significant distinguishingfactor.NearlyhalfofthecurrentNHBconsumers say they have increased theirconsumptioninthepastyear,citingimproved taste,choosing to drink naturalhealthaidesasopposed
42、tosyntheticbeverages,as well as becoming aware ofmore options,which further encourages trialand consumption(Exhibit 12).NHB48%43%9%Less frequentlyAbout the sameMore frequentlyExhibit 12 Purchasing TrendsPurchases of NHB(now vs 12 months ago)62%58%57%57%55%36%I have found beverages that Ienjoy the ta
43、ste of more than I wasaware of beforeI have shifted from drinkingsynthetic or artificial products tonatural onesI have discovered beverage options that meet my current needs that I wasnt aware of beforeI have noticed increased healthbenefits from additionalconsumptionI need these health benefits now
44、more than I used toI have shifted from takingsupplements to drinking naturalhealth beveragesReasons for NHB purchase increase(Top 2 Boxes,1-7 scale)7NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2
45、023 33%20%18%16%13%When Im home,not at mealtimeWhen Im exercising or playing sportsMealtimeWhen Im out and on-the-goWhen Im at work away from homeC O N S U M E R P U L S E S U R V E YWhen selecting and purchasing natural healthy beverages,consumers are consistently less concernedabout the price than
46、 they are about the quality and effectiveness of the product.This relatively low levelof price elasticity can inform manufacturers decisions not only about investing in the quality of theiringredients,but also with regard to marketing decisions,packaging,and sales channels(Exhibit 13).Exhibit 13 Pri
47、ce is less important than many product characteristics for NHB consumersImportant NHB characteristics(Percent selecting top two boxes on a 1-7 scale)68%67%65%59%47%37%IngredientsAll naturalSpecific health/functional promiseSugar contentPriceCalorie countConsumption of natural healthybeverages happen
48、s throughoutthe day they have become“anytime”drinks.Whenconsidering these products fortheirhealthbenefits,theimportant issue for consumersis not when they drink them,but that they drink them at all.Consequently,thegrowthofnatural heathy beverages cancut into the market share of allotherdrinkcategori
49、esat alldrink occasions(Exhibit 14).Exhibit 14 Usage Occasions“Which of these describe when you generally drink NHB?”8NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S
50、 U R V E YJuiceJuice consumption in the U.S.has seen minimal growth in recent years,with flat volume and low single-digit dollar sales increases.Much of that growth has come from introductions of lower calorie/lower sugaroptions to address consumers health concerns.Todays juice drinkers are distingu
51、ished from naturalhealthy beverage drinkers by their relative prioritization of taste,with a secondary focus on price(Exhibit15).With the number one reason consumers are increasing purchases of natural healthy beveragesbeing improvement in taste,the traditional juice market may come under increased
52、market sharepressure from these drinks.The market may evolve to be divided primarily on price,with beveragestouting health benefits able to extract a premium from those consumers who are using those drinks as areplacement for supplements.If newer,premium processing methods like fresh pressed juice f
53、ail todominate the mainstream juice market,traditional juice companies may seek to continue reinforcing thehealth benefits of their products to capture more of that pricing leverage.Exhibit 15 CharacteristicsImportant juice characteristics(Top 2 Boxes,1-7 scale)83%52%51%49%47%40%32%TastePriceSpecifi
54、c Fruit or Vegetable Health Benefits(e.g.,immunity support)Low SugarContentNot From ConcentrateShelf StableFresh PressedFurtherblurringthelinebetweennaturalhealthy beverages and traditional juice,the topreasonjuicedrinkersprovidefortheircontinued consumption is the perception of theoverall health be
55、nefit provided(Exhibit 16).Thatistosay,juicedrinkersareeitherunaware of the(typically high)sugar content oftheir juice beverage or are simply ignoring thatcharacteristiclikelyforthereasonthatitprovidesa“better-for-them”alternative.However,when consumers were asked whythey dont purchase juice more fr
56、equently,survey respondents cited expense and sugaras the two most common reasons.Exhibit 16 Purchasing TrendsReasons for juice purchase increase(Top 2 Boxes,1-7 scale)69%59%56%52%48%35%I like the health benefitsI like the new juice optionsavailable to meI have shifted from drinkingless healthy beve
57、rages tojuiceI have shifted from drinkingother juice products that arenot 100%juiceI have shifted from drinkingother beverages besideswaterI have shifted from drinkingwater to drinking more juice9NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUT
58、ED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S U R V E YAs for consumption,juice has long been astaple at the American breakfast table.Thisremains true and shows yet another front inthe market share battle between traditionaljuicesandthenewercategorieswithexplicit ben
59、efits.Today,nearly 60%ofpeople say that they most commonly drinkjuice during breakfast or lunch.This strongassociation of juice with mealtime likelyindicates staying power for juice,but alsoimplieslimitedgrowthupsideinthecategory in the near term.However,asconsumers add fruit-or vegetable-basedbever
60、ages to their diet during other times ofthe day,it becomes clear that they aresearching for drinks that offer somethingextra to those occasions.Exhibit 17 Usage Occasions“Which of these describe when you generally drink juice?”WaterThe market for packaged water may be farless dynamic than that of na
61、tural healthybeverages,but differences between brandsand products continue to drive consumerbehavior.Since2017,Americanshaveconsumed more packaged water than anyother packaged beverage,totaling nearly 50gallons per capita in 2021,with over 90%ofsurveyrespondentssharingthattheypurchasepackagedwater,a
62、tleastoccasionally.71067%Mealtime20%Lunch15%Dinner65%Breakfast17%When Im home,not at mealtime8%When Im out and on-the-go5%When Im at work away from home4%When Im exercising or playing sportsExhibit 18 Usage Occasions“Which of these describe when you generally drink packaged water?”33%Mealtime38%Lunc
63、h18%Dinner45%Breakfast20%When Im out and on-the-go18%When Im home,not at mealtime15%When Im at work away from home14%When Im exercising or playing sportsNO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZA
64、RD 2023 Exhibit 20 Purchasing TrendsReasons for water purchase increase(Top 2 Boxes,1-7 scale)C O N S U M E R P U L S E S U R V E YWhile convenience has been cited historically as a top reason for choosing bottled water,our surveyresults demonstrate that consumers drink only slightly more packaged w
65、ater outside of the home thanthey do at home,where tap or filtered water is readily available(Exhibit 13).Rather,it appears thatpeople strongly prefer packaged water due to the taste,whether due to mineral content,processing,added flavoring,or effective marketing(Exhibit 19).Consumption of packaged
66、water,both flavored and unflavored,continues to rise.According to theInternational Bottled Water Association,American consumption of packaged water rose 4.7%in 2021.8Our survey shows that roughly 1/3 of people are purchasing more packaged water than a year ago,largely because they are focusing on hy
67、dration and drinking more water in general(Exhibit 20).Unflavored WaterFlavored Water71%69%47%44%33%I amdrinkingmore ingeneralI like thenewflavoredwateroptionsavailableto meI haveshiftedfromdrinkingtap orfilteredwaterI haveshiftedfromdrinkingotherbeveragesbesideswaterI haveshiftedfromdrinkingunflavo
68、redpackagedwater69%43%40%32%I am drinkingmore ingeneralI have shiftedfrom drinkingtap or filteredwaterI have shiftedfrom drinkingotherbeveragesbesides waterI havedshifted fromdrinkingflavoredwaterExhibit 19 CharacteristicsImportant water characteristics(Top 2 Boxes,1-7 scale)1162%52%36%It tastes bet
69、terthanunflavored waterIt is morerefreshingthan otherbeveragesIt is healthier thanother beverageoptions(besideswater)Unflavored WaterFlavored Water63%49%48%It tastes betterthan tap waterIt is healthier/more pure thantap waterIt is healthier thanother beveragesoptionNO PART OF THIS MATERIAL MAY BE CO
70、PIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S U R V E YUnflavored packaged water companies have long sought to differentiate their products through branding,packaging,or taste.For a product that ha
71、s largely been commoditized,it is not surprising that the list ofbrands preferred by consumers across the country comprises a long,thin tail,with a plurality ofconsumers favoring their grocers private label.While flavored water brands are able to produce drinksthat are more distinct from each other,
72、the list of brands favored by consumers is also very diverse withno brand commanding even 10%of our surveys market(Exhibit 21).Exhibit 21 Consumers Preferred Water BrandsUnflavored WaterFlavored Water34%Other24%Private Label12%Brand A9%Brand B9%Brand C4%Brand D4%Brand E4%Brand F52%Other5%Private Lab
73、el8%Brand G8%Brand H7%Brand I7%Brand J6%Brand K6%Brand L12Percent of people selecting brand,anonymizedNO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G
74、 R I T E C H L A S T R E P O R THow to Grow the Beverage CategoryFor companies and investors looking for growth in the beverage market,certain trends emerge from thissurvey.LooktoGenZ&MillennialsAs is the case with many categories,the opportunity appears to lie with Generation Z and Millennials.Noto
75、nly are they more frequent purchasers across all beverage categories today,but a higher percentage ofthem are increasing their consumption rates across beverage types.These younger generations,whilefairly brand loyal,are also much more likely to experiment with new products,creating an innovationreq
76、uirement for incumbents large and small and an ever-present opening for new players.Companiesthat have a core competency in innovationbe they flavor and ingredients houses or beveragebusinessestend to be more attractive to investors for their ability to build their brands within categoriesor sub-cat
77、egory niches.Such companies can outpace slower-moving large corporations,maintaining ahigh level of newness in their SKU assortment and pruning slow-moving product lines.AnAll-DayAffairThe range of usage occasions exemplified by NHBs is an asset to manufacturers which can perhaps beleveraged by craf
78、ting more specialized yet health-beneficial products.Whereas most NHBs today arejuice-based,other categories like coffee,tea,sodas,energy drinks,or even water,are also appearing onthe market fortified with ingredients that offer health benefits,further increasing NHB penetration.AConduittoWellnessAn
79、other likely place for companies and investors to focus is in expanding the market for NHBs,especiallythose that can effectively market health benefits related to digestion and immunity,beyond the 33%ofconsumers who our survey indicates drink them today.This category appears to be the next frontier
80、ofbeverage consumption,as we can see through the increasing trial,penetration,and purchase frequencyrelayed by our survey results.In many ways,beverages can be a more enjoyable health conduit to theconsumer than traditional vitamins and supplements.Where there is consumer demand for the healthbenefi
81、ts of a supplement with a product that provides refreshment,the supply of natural healthybeverages should follow.13NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 C O N S U M E R P U L S E S U
82、R V E YErrontheSideofCautionAs is the case within the vitamins,minerals,and supplements industry,beverages with health andnutrition claims are under increased scrutiny by the FDA and other regulatory authorities.In this highlyfluid regulatory landscape,companies must be cautious to not overstate or
83、mislead consumers about thebenefits or effects of the product.Recently,those companies that have not heeded such caution haveendured deleterious effects on their business.TasteReignsSupremeAcross product categoriesgenerally speakingthe technologies and products that have successfullyclimbed the adop
84、tion curve moved beyond early consumers who were willing to look past some detractingcharacteristics(like lackluster taste or high cost)for the ultimate benefit of the product.Such productsachieve mass acceptance when those rougher edges have been smoothed down allowing the lesspassionate consumers
85、to reap the benefits without the downside experienced with earlier iterations.Acompany that creates the best-tasting,“best-for-you”beverage lineperhaps on par with juices that arewidely enjoyed todaycould most likely reach those customers who are unwilling to try the currentofferings in the category
86、.Taste remains a driver to consumers water purchase decisions,especially when comparing packagedwater to tap water.Packaged water brands taste slightly different from each other due to mineral content,carbonation level,source,or flavor essence,but taste is rarely emphasized as a differentiator bycom
87、panies,despite its importance to consumers.Instead,todays water brands distinguish themselvesfrom each other and commoditized private label options on a wide range of traits(e.g.exotic place oforigin,packaging,price,and flavor varieties).If a water brand can win the“Pepsi Challenge”taste test,itshou
88、ld be able to go to market on that basis with a sustainable differentiator that has not yet beendeveloped in the market.Opportunities for Investment and AcquisitionIn addition to using M&A to expand across subcategories,some companies may want to explore using aninorganic growth strategy to expand v
89、ertically.For example,acquisition of ingredients manufacturers mayenable companies to further develop their healthy beverage business,staying at the forefront of trendsand ensuring access to in-demand emerging components.Alternatively,a focus on manufacturing,co-packing,and distribution capabilities
90、 may unlock direct-to-consumer channels that are growing inimportance,especially with younger consumers.Successful inorganic growth efforts center on carefulevaluation of target companies assets and ensuring that their brands have earned the right to compete.Solid channel support from distributors a
91、nd buyers combined with high levels of consumer engagementare likely essential elements to successful acquisitions.Companies that construct a platform of brands orproducts with these traits may quench their thirst for growth.Our research can be tailored to provide insight into your companys unique s
92、ituation.We would bedelighted to explore how consumer sentiment could affect your business and the potential implications forfinancing,valuation,transactions,strategy,and priorities.14NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT T
93、HE PRIOR CONSENT OF LAZARD LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R TAbout LazardLazard,one of the worlds preeminent financial advisory and asset management firms,operates from 43cities across 26 countries in North and South America,Europe,Asia and Austra
94、lia.Celebrating its 175thyear,the firm provides advice on mergers and acquisitions,capital markets and other strategic matters,restructuring and capital solutions,and asset management services to corporations,partnerships,institutions,governments and individuals.For more information on Lazard,please
95、 visit .Follow Lazard at Lazard.LazardsConsumer,Food&RetailTeamLazard has financial advisory specialists throughout the world with experience and relationships in theconsumer,food,agriculture,restaurant/multi-unit franchise,and e-commerce/retail industries.Thesebankers have played key advisory roles
96、 in some of the most important,complex,and industry-definingtransactions.Our transactions are award-winning,strategic,and often,cross-border.We have built ourreputation advising firms like yours.We welcome the opportunity to share our views on consumer,food and retail M&A trends,your specificbusines
97、s attributes,and potential strategic alternatives in this dynamic market place.We are available toconnect at your convenience.Adam WiedenManaging DGina CetinaDToni KuzielaBusiness Development MJim DAquilaManaging DJohn GoldasichManaging DTim GeorgeManaging DDavid IversonSenior AAlex HeckerManaging D
98、Mario SkoffManaging D15NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R TAbout CH Consulting AdvisorsCH Consulting Advis
99、ors is a boutique strategy consulting firm focused on the consumer and retailindustry.We advise leading private equity,consumer,and retail companies in corporate and portfoliogrowth strategy and buy-side and sell-side diligence.CH Consulting Advisors brings deep analytics,extensive industry experien
100、ce,and flexible approach to working with executive teams,boards,andinvestment teams.Our senior leaders are deeply involved with every effort.Peter HsiaCo-founder&Managing DWarren MazerManaging DBruce CohenCo-founder&Managing DConsumer Goods&RetailDecades of consumer and retail industry specializatio
101、n and knowledge across every major segmentPrivate Equity AdvisoryExpertise across investment cycle:buy and sell side diligence,portfolio strategy from lower middle market through the bulge bracketAnalytical ToolkitProprietary analytic approaches to consumer issues like brand loyalty,digital engageme
102、nt,and growth vectorsGrowth Strategy ExpertisePlanning and prioritization process has helped dozens of middle market and global companies ignite growthSenior Involvement Our leaders are involved in driving the thinking and delivering seasoned practical insights leveraging 80 years of industry experi
103、ence Flexible and ExpandableCustomized assessment approach for targeted or expansive scopes that leads to shareholder,board,executive and investor confidence16NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZAR
104、D LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R T1.https:/ water includes bottles,cans,and boxes of still or carbonated water.3.Natural healthy beverages(NHBs)include natural health shots,cleansing drinks,kombucha,antioxidant-rich fruit drinks,natural energy d
105、rinks(including canned ready-to-drink coffee or tea),gut health,and pro-or pre-biotics4.Penetration is defined as the percent of people consuming within the last twelve months.5.“Morning Pick-Me-Up”is independent of breakfast,implying both time and purpose.Breakfast throughout this survey refers to
106、a morning meal.6.https:/foodinsight.org/food-trends-for-2023/7.https:/bottledwater.org/nr/increased-consumer-demand-for-bottled-water-as-a-healthy-alternative-to-other-packaged-drinks8.https:/bottledwater.org/nr/increased-consumer-demand-for-bottled-water-as-a-healthy-alternative-to-other-packaged-d
107、rinks/17NotesNO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R TA typical Lazard and CH Consulting Advisors Consumer Puls
108、e Survey is designed to capture a snapshot of the current consumer sentiment in the United States related to a certain topic within the consumer industry.Such a survey is designed and implemented to minimize total survey error.Lazard and CH Consulting Advisors contracted a third-party market researc
109、h company to conduct the survey online in the United States to a sample of U.S.adults ages 18 and older.Panel members are recruited by the third-party market research company,and survey questionnaires are taken via self-administered online surveys.Our survey audience is balanced to be representative
110、 of the United States Census on gender,age,income,and ethnicity.We screen out panel respondents not residing in the United States or under the age of 18.This survey,A Drink to Health,included 1,007 qualified respondents:312 who were born in 1981 or later that we have identified as Gen Z/Millennials
111、and 695 born before 1981 who we have identified as Gen X or older.Lazard and CH Consulting Advisors develop the survey questionnaire by leveraging our industry expertise,monitoring what is taking place in the market,and focusing on what we believe may be relevant to entrepreneurs,financial sponsors,
112、and corporations.Lazard and CH Consulting Advisors retain the questionnaire with all the questions from this survey with the exact question wording and response options as presented to respondents,as well as the results from the survey.This published Consumer Pulse Survey does not represent all of o
113、ur ultimate findings.Instead,the responses can potentially be reviewed to provide insight into your companys unique or specific concerns.We would be delighted to explore how consumer sentiment could affect your business and the potential implications for financing,valuation,transactions,strategy,and
114、 priorities.18Consumer Pulse Survey MethodologyNO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023 I L L U S T R A T I V E T E X T F R O M A G R I T E C H L A S T R E P O R TDisclaimerThe foregoing
115、 materials have been prepared by Lazard Frres&Co.LLC(together with its current andfuture affiliates“Lazard”)based primarily on results from a survey conducted by CH Consulting Advisors.These materials are for general informational purposes only and they are not intended to be,and shouldnot be constr
116、ued as,financial,legal or other advice.In preparing these materials,Lazard has assumed and relied on the accuracy and completeness of anypublicly available information and of any other information made available to Lazard by any third partiesincluding the survey results,andassumes no responsibility
117、for any independent verification of any ofsuch information.These materials are based on economic,monetary,market and other conditions as ineffect on,and the information available to Lazard as of,the date hereof,unless indicated otherwise.Subsequent developments,including,without limitation,in relati
118、on to COVID-19,may affect theinformation set out in these materials,and Lazard assumes no obligation to update and/or revise thesematerials or the information and data upon which they have been based.Any statements in these materials regarding future conditions and events are inherently subject toun
119、certainty,and there can be no assurance that any of the future conditions or events described in thesematerials will be realized.In fact,actual future conditions and events may differ materially from what isdescribed in these materials.Lazard assumes no responsibility for the realization(or lack of
120、realization)of any future conditions or events described in these materials.Nothing herein shall constitute a commitment or undertaking on the part of Lazard to provide any service.Lazard shall have no duties or obligations to you in respect of these materials or other advice provided toyou,except to the extent specifically set forth in an engagement or other written agreement,if any,that isentered into by Lazard and you.19NO PART OF THIS MATERIAL MAY BE COPIED,PHOTOCOPIED,OR DUPLICATED IN ANY FORM BY ANY MEANS OR REDISTRIBUTED WITHOUT THE PRIOR CONSENT OF LAZARD LAZARD 2023