If 200 consumer products and retail executives agreed on the trends they are most concerned about and the strategic objectives they would jointly focus on, would you want to know what they were? The 2020 Future Value Chain report provides the answers to this question. It truly is a report by the industry, for the industry. This special webcast highlights the findings of the new report. http://www.futurevaluechain.com

1. WEBCAST
23 FEBRUARY 2011

2. THE EVOLUTION OF THE FUTURE VALUE CHAIN
2 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

3. 2020 Future Value Chain: Objectives and Principles
Objectives
-­‐ Bring a collective vision to the CP&R Industry
-­‐ Ensure the Industry is best prepared to continue
to meet the needs of shoppers and consumers
in a changing world
Principles
-­‐ New report every two years
-­‐ 10-­‐year perspective
-­‐ (Executive) industry expertise via workshops
-­‐ Not a consultant project
3 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

4. 2020 Future Value Chain: The Future Value Chain Genesis
2016: A Vision of the Future 2018: Succeeding in a Volatile 2020: Building Strategies for
Value Chain Market the New Decade
80 executive participants 130 executive participants 200 executive participants
Two global workshops Global workshop (Utrecht, NL) Global workshops (Chantilly, FR)
(Utrecht, NL & Chicago, USA) Asian workshops: Regional workshop
Follow-up: GS1 in Europe (Antwerp, BE)
Hong Kong (Asian region)
2016 Future Supply Chain Country workshops:
Mumbai (Indian market)
Australia (Melbourne)
Information Sharing report Tokyo (Japanese market) France (Paris)
New Ways of Working Together Follow-up: Netherlands (Utrecht)
Succeeding in a Volatile Market US (Chicago)
Mexico (Mexico City)
4 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

5. © 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

6. 2020 Future Value Chain Framework: Trends, Objectives and Tactics
6 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

7. TRENDS:
WHAT IS DRIVING OUR OBJECTIVES
7 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

8. We see rapid changes in societies around the world
Increased urbanization Aging population
Today:
Close to 180,000 people move into cities daily, adding roughly 60 million new urban dwellers each year
Older consumers
2015: Doubling of cities > 8 million Have substantial ecomomic power
2020: 8 Megacities (>20 million) Devote greater portion of total expenditure to necessities
2050: 70% of world population lives in urban centers May soon represent majority of voting public in many countries
Example consequences
Shift to smaller-footprint stores Example consequences
No room for unproductive Changes to business models to meet
inventory needs of different population
Supply and logistical challenges Review products and processes
New infrastructures required (e.g. wider aisles, largeprint labels)
Shrinking workforce challenges
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Increasing spread of wealth
Shifting of economic power
Middle class is rapidly expanding (mostly in developing regions)
2000: 56 % of global middle class in developing countries
2030: 93 % of global middle class in developing countries Economic powers like China, Brazil and India continue to rise
Volatile global economy will remain the norm for coming decade
Example Consequences
source of growth for manufacturers
and retailers
Implications for availability and
prices of commodities
Potential protectionistic country
policies
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© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

9. changes in consumer and shopper behaviour
Increased impact of consumer technology adoption Increase in consumer service demands
Shoppers continue to become more empowered using technology Exponential growth and adoption of consumer technologies
Explosive growth of mobile features and device convergence drives new levels of service demands
2013: over 2 billion mobile users globally will have purchased via Rise of stronger web-based service economy
handsets Consumers demand 24/7 service
Online sales will grow to 25 % to 30% of total retail sales
Crucial role of social media (now: 4 % to 15%)
Example consequences
Growth of mobile interaction and commerce Example consequences
Consumer technology used in stores More demanding consumers
Addressing social communities New service models needed
Leveraging huge amounts of data
Dealing with privacy
Becoming more transparent and
collaborative towards shoppers
13 2020 Future Value Chain Building Strategies for the New Decade 15 2020 Future Value Chain Building Strategies for the New Decade
Growing consumer concern about sustainability Increased importance of health and wellbeing
Shoppers want more healthy products and a healthier lifestyle
Emerging consumjer segments like LOHAS
(Lifestyles of Health and Sustainability)
increases significantly LOHAS In US are approximately 19% of adult population:
Regulation carbon footprint increase 41 million consumers
significantly Sales from LOHAS expected to quadruple in five years
Consumers expect governments and
companies to play major role
US Green marketplace grows from $420
billion in 2010 to $845 billion by 2015
Food, beverage and personal and
household goods sectors particularly
exposed
Waste becomes key focus sustainability
discussion
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© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

10. other changes in our environment
Scarcity of natural resources Increase in regulatory pressure
Demand larger than supply
2030: World population 8.3 billion Regulatory pressure expected to increase
Demand for food +50% Hot button areas:
Demand for energy +50% Environment
Fresh water demand +30% Sustainability
food safety
Example consequences
Energy revolution
New Water policies
Impact on food prices
Pressures on food quality & Safety
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Rapid adoption of supply chain technology capabilities Impact of next-generation information technologies
More synchronized value chain with greater visibility and traceability Information Technology shifts from indispensable support function
Improved collaboration to the way to become adaptive
New supply chain / logistics technologies New ways of business due to next generations of IT
Information transparency New ways of managing business processes
Major new opportunities for innovation
Freeing up from current IT constraints
Example consequences
Need to improve visibility and
traceability
Need to share information over
company boundaries
Need to adopt right technologies
23 2020 Future Value Chain Building Strategies for the New Decade
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10 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

11. OBJECTIVES:
WHAT WE WANT TO ACHIEVE
11 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

12. 2020 Future Value Chain: Four Strategic Objectives
Make Our Business More Sustainable
From Niche to Norm
Optimize a Shared Supply Chain
Collaborate Differently, Compete Differently
Engage with Technology-Enabled Consumers
The Consumer in the
Serve the Health and Wellbeing of Consumers
Focus on Quality of Life
12 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

13. 1. Make Our Business More Sustainable: From Niche to Norm
Success means consumers trust our industry
Retailers and brand manufacturers collaborate
Tackling big challenges (e.g., deforestation)
Helping consumers understand their role in living an
environmentally friendly lifestyle
Common measures, language and consistent messaging Success will come
Helping consumers understand their role when consumers begin
Helping to make the right decisions, enabling a to trust our industry
significant change in consumer behavior
Competitiveness delivered by
Brand and store performance
Breakthrough innovations improving sustainability
Working with upstream suppliers to extend our influence
over many other contiguous industries
13 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

14. 2. Optimize a Shared Supply Chain: Collaborate Differently, Compete Differently
The 2020 future supply chain reconsiders
assumptions
New parameters include:
Reduced CO2 emissions
Energy consumption
Driven by consumers; they are the trigger for Success will come when supply chain
an optimized collaborative supply chain flow
optimization is treated from a total
value chain perspective rather than
from individual company perspectives
14 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

15. 3. Engage with Technology-Enabled Consumers: The Consumer in the
Consumer technology
Changes lives of consumers
Changes shopping journey
Increases marketplace transparency
Consumers Success will come when we
Demand personalized dialogues and offerings anytime, understand how to maintain a
anywhere true dialogue with consumers
Embrace technology quicker than the industry via their preferred channels
Digital natives are increasingly big consumer base and technologies
Digital immigrants also heavily use consumer
technologies
The industry
Needs to figure out how to effectively interact
Needs to be viewed as a trusted source for information
Will be more successful when companies engage
consumers in new product and service development
15 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

16. 4. Serve the Health and Wellbeing of Consumers: Focus on Quality of Life
Health and wellbeing of consumers: physical,
emotional, spiritual, intellectual and sustainable wellbeing
Positive changes in consumer behavior
Healthy choices available for all budget levels
Information/education to make informed choices Success will come when
Improved availability and quality of water and hygiene
we focus
Reduce diseases and infant mortality rate
To be established via a new way of working together
Governments, consumer goods companies,
pharmaceutical companies and NGOs
Enabling new business models
Enabling a dialogue to collaboratively work on
concrete solutions
16 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

17. TACTICS:
HOW WE WILL ACHIEVE OUR OBJECTIVES
AS AN INDUSTRY
17 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

18. 2020 Future Value Chain:
18 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

19. HOW TO USE
THE FUTURE VALUE CHAIN
IN YOUR COMPANY
19 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

20. You can already be inspired by a lot of good example initiatives across the industry
Illustrative Examples
Make Our Business Optimize a Shared
More Sustainable Supply Chain
Unilever Collaborates with Walmart (ASDA) Colgate-Palmolive (as many other
to Create Awareness and Educate Customers Companies) Uses Global Data
on Sustainable Living Synchronization to Standardize Business
Processes, Drive Efficiency and Enable
METRO Group Develops a Sustainable Faster Innovation
Aquaculture Program for Fish in the
Mekong Delta in Vietnam United Biscuits and Nestlé Collaborate to Generate
Significant Environmental and Cost Savings
Many Consumer Product
Companies are Committed Towards
Sustainable Production of Palm Oil Mars and Kuehne + Nagel Measure and
Visualize Order Placement Impact to Gain
Coca-Cola Hellenic Runs Energy-Efficient Environmental Benefits and Improve
Plants that Reduce CO2 Emissions Efficiency
Albert Heijn Uses Dynamic Pricing and Digital
Signage to Reduce Waste on Fresh Produce Danone Works with Carrefour to Improve
On-Shelf Availability and to Leverage
Supply-Driven Shopper Insights
-
and Track and Reduce Energy Usage for Its Products
20 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

21. You can already be inspired by a lot of good example initiatives across the industry
Illustrative Examples
Engage with Serve the Health
Technology-Enabled and Wellbeing of
Consumers Consumers
PepsiCo Successfully Engages a Large
Customer Base to Interact in Product CFBAI Initiative Seeks to Address the Problem of
Development Childhood Obesity by Self-Regulating Advertising to
Children under 12 Years
Coca-Cola in Japan Uses Interactive Product Recall Service of GS1 in U.S. and
Vending Machines to Increase Canada Has Helped to Build an Efficient
Consumer Engagement Process for Handling Product Recalls
Nestlé Helps Raise Awareness about the Importance
of Proper Nutrition and Health and Wellness to
through an Innovative Mobile Marketing Children through Its Healthy Kids Global Program
Solution Offered by O2 Mobile in UK
Hindustan Unilever Limited Educates Rural
Women to Enter the Growing Consumer
Market in Rural India
Unilever and Albert Heijn Jointly Work on
Strategic Activation Platforms, Using Walmart Collaborates to Make Technology
Shopper Insights to Drive Joint Growth More Accessible and Affordable for Small
Health Practices
21 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

22. How Robust Is Your Strategy?
Make Your Business More Sustainable Engage with Technology-Enabled Consumers
Will you drop product lines that are fundamentally not Do you know how to survive a negative social
sustainable? network viral fan page?
Do you have a contingency plan for an unexpected eco- Is your company really differentiating between a
disaster or climatic disruption?
Do you have programs in place to address, for example, Do you know who else is providing information about
restrictions on truck emissions, access to urban zones and your brands or stores to consumers or shoppers?
noise pollution? How do you create transparency with consumers while
Are you prepared to transparently report the detail of your maintaining control?
Optimize a Shared Supply Chain Serve the Health and Wellbeing of Consumers
Do you still see your supply chain as a source of Are your products creating the health crisis rather
competitive advantage? than solving it?
Would you share a truck or a warehouse with a competitor? Are you prepared to meet the new demands of older
Is your supply chain able to cope with the impact of oil consumers?
returning to its 2008 historical high of $147 a barrel? Or Do you know where you will get your labor force once
even exceeding that, and hitting $200? your current labor force retires?
Are you willing to share non-competitive information with How will you efficiently serve the underserved customers
trading partners including competitors about product in developing markets?
movements along the supply chain?
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© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

23. Q & A

24. Three Ways Companies Can Leverage the Future Value Chain in their Own Business
1. Apply the Future Value Chain framework inside your company
What strategic objectives should we have inside our company?
What tactics do we need to put into place to achieve the objectives?
2. Implement the relevant tactics and ideas from the Future Value Chain initiative
Existing company programs address strategic objectives
3. Challenge yourself to see how robust your strategy really is to:
Make your business more sustainable
Optimize a shared supply chain
Engage with technology-enabled consumers
Serve the health and wellbeing of consumers
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© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

25. workshop that will lead you from Inspiration toward a concrete Roadmap
Future Value Chain
Discovery-day
Building Strategies
for the New Decade
Inspiration by concrete
business solutions and best-in-
class reference examples
Blending with company-
specific issues and initiatives in
an unconventional facilitated
process
Resulting at the end of the day
in a high level roadmap that fits
your business context
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

26. Contact details
The Consumer Goods Forum Capgemini
Sabine Ritter Kees Jacobs
The Consumer Goods Forum Capgemini
+33 1 82 00 95 80 +31 653 292 832
s.ritter@theconsumergoodsforum.com kees.jacobs@capgemini.com
Marc van der Liet Brian Girouard
The Consumer Goods Forum Capgemini
+33 1 82 00 95 84 +1 952 212 0417
m.vanderliet@theconsumergoodsforum.com brian.girouard@capgemini.com
HP Microsoft
Mario Vollbracht Ted Combs
HP Microsoft
+1 404 551 5872 +1 630 725 4319
mario.vollbracht@hp.com tedcombs@microsoft.com
www.hp.com/go/retail David Bailey
www.hp.com/go/consumergoods Microsoft
+44 118 909 4566
davidbai@microsoft.com
26 2020 Future Value Chain Building Strategies for the New Decade
© 2011 The Consumer Goods Forum, Capgemini, HP. Microsoft . All rights reserved

27. www.FutureValueChain.com
www.theconsumergoodsforum.com
www.capgemini.com
www.hp.com
www.microsoft.com
©2011 The Consumer Goods Forum, Capgemini, HP, Microsoft. All rights reserved.