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The inexorable rise of the ’emerging’ markets

A couple of interviews, data points over the last few days that brought home the significance of ’emerging’ markets for me. For companies such as Coca Cola (HBR interview with CEO here), Heinz (HBR interview with CEO here) and YUM (owners of Pizza Hut, KFC et al), the US seems like a ‘has been’. Some points:

  • In the next 10 years, we will see ~1 billion new middle class people across the globe
  • 20% of Heinz’s revenues will come from emerging markets this year compared to less than 5% a few years ago. Wow.
  • In the US, if a CPG company gets shelf space at Safeway, Kroger and WalMart, that covers ~100% of the market. In India, the organized sector covers <15%. In Russia, 40%
  • 65% of YUM’s profits now come from outside the US; it opens ~1000 ‘units’ a year across the world

There’s a clear dicotomy of markets here – one that is slow (moribund?), the other that’s on a tear (but overheating?).

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