Consumer Goods

We supply coatings and specialty chemicals used in a variety of consumer goods, including consumer electronics, furniture, domestic appliances, food and beverage, personal care and cleaning. Our specialty chemicals are either vital to the production process or are key functional ingredients. Our coatings play an aesthetic and protective role.

Trends

Growth in both population and wealth in countries such as China and India – combined with strong global demand for new products such as smartphones and tablets – has resulted in substantial historical global growth in many parts of the Consumer durables sub-segment. The outlook going forward is also generally positive. In terms of production, there has been a shift in most sectors to high growth countries. For example, there is now more production in Brazil, Russia, India and China alone than there is in North America and Western Europe combined for domestic appliances. Growth rates and expected growth rates are also substantially higher in non-Western regions. However, it is worth noting that in many cases, design and decision-making processes are often still based in North America or Western Europe.

Other areas of the Consumer durables sub-segment such as furniture production, an important market for AkzoNobel, display a different pattern, more similar to the production and growth patterns that we see in the Consumer packaged goods sub-segment. As a general rule, Consumer packaged goods are much more stable and less cyclical in terms of demand, but also tend to be lower growth. In addition, the very large base of installed production in North America and Europe means that while growth is lower in these regions, production in Europe and North America still outstrips production in high growth countries, and this will continue in the medium term.

Future sustainability developments

Based on the WBCSD Vision 2050, consumer durables are expected to last longer, with package recycling being integrated into business models. By 2050, it is forecast that people will only use five tons of non-renewable materials each, down from today’s 85 tons (US).

Implications for strategy and actions

Given the shift in geography in many parts of the Consumer durables sub-segment, we need to ensure that we have the right production, sales and technical service organizations in high growth countries, and that these organizations are working effectively across regions in terms of design and key account management where appropriate. At the same time, we have to continue restructuring our sales and production in more mature markets. We also need differentiated business models with appropriate value and cost trade-offs to serve both premium and mass markets. Finally, we must ensure that our products provide new or better functionality, particularly with regard to sustainability.

Consumer Goods – Fields of application (illustration)Consumer Goods – Fields of application (illustration)