The Role of Fresh - Nielsen Perishables Group

THE ROLE OF FRESH
UNDERSTANDING AND LEVERAGING FRESH
FOR TOTAL STORE SUCCESS
NIELSEN PERISHABLES GROUP
JUNE 2014
IN THIS SESSSION, WE’LL COVER:
TOP CONSUMER PRIORITIES DRIVING FRESH
MULTI-DIMENSIONAL CONSUMER UNDERSTANDING
IN A RAPIDLY CHANGING ENVIRONMENT
HOW YOU CAN WIN
EXPAND YOUR POSSIBILITIES WITH FRESH
29% of sales…
ht ©2014 The Nielsen Company. Confidential and proprietary.
only
39%
MEAT
32%
PRODUCE
16%
DELI
13% of space
8%
BAKERY
5%
SEAFOOD
Source: Nielsen Perishables Group FreshFacts® Total U.S. 52 weeks ending 12/28/2013 vs. Year Ago; Products in each group are not mutually exclusive
3
SOME FRESH WELL-POSITIONED TO SUCCEED IN
ALTERNATIVE CHANNELS
% department buyers who buy within channel
66
$2MM+
Grocery
69
54
10%
ht ©2014 The Nielsen Company. Confidential and proprietary.
64
9%
13%
17%
9%
18%
14%
13%
Meat Department
Produce Department
Mass Merch W/Supers
Nielsen Homescan Channel Facts 2013
61
13%
Deli Department
Warehouse/Club
10%
Bakery Department Seafood Department
Dollar Stores
Conv./Gas
Drug
4
ht ©2014 The Nielsen Company. Confidential and proprietary.
ALTERNATIVE CHANNELS GROWING
GROCERY
DRUGSTORES
DOLLAR STORES
CONVENIENCE
STORES
PERISHABLES
Purchase Frequency
-2.6% vs YAGO
PERISHABLES
Purchase Frequency
+7.1% vs YAGO
PERISHABLES
Purchase Frequency
+2.0% vs YAGO
PERISHABLES
Purchase Frequency
+1.4% vs YAGO
33,445 Stores
+7%
2013 vs 2007
41,378 Stores
+21%
2013 vs 2007
25,486 Stores
+36%
2013 vs 2007
151,282 Stores
+32%
2013 vs 2007
Source: 1. Nielsen Homescan Total Shopper View 52 weeks ending 12/28/13 versus year ago 2. Nielsen TDLinx
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FRESH GROWTH CONTINUES TO BE STRONG
DOLLAR GROWTH
VOLUME GROWTH
7%
6%
6%
5%
4%
3%
3%
ht ©2014 The Nielsen Company. Confidential and proprietary.
4%
1%
MEAT
PRODUCE
DELI
BAKERY
-0%
SEAFOOD
1.1%
0.2%
TOTAL STORE
Source: Nielsen Perishables Group FreshFacts® Total U.S. (FCA) weeks ending 4/26/2014 vs. Year Ago and Total U.S. - All Outlets Combined, plus Convenience ending 5/11/2014 (UPC only)
6
FASTEST-GROWING FRESH CATEGORIES
Seven of top-ten fastest growing fresh categories are in produce
PRODUCE
DELI
ht ©2014 The Nielsen Company. Confidential and proprietary.
Dips, Spreads and Toppings
$994 million in annual sales
+15.3% vs. YAGO
Deli Breakfast Foods
$71 million in annual sales
+11.2% vs. YAGO
Cooking Greens
$362 million
in annual sales
+23.9% vs. YAGO
Produce Beverages
$972 million
in annual sales
+16.7% vs. YAGO
Avocados
$994 million
in annual sales
+14.9% vs. YAGO
Specialty Fruits
$502 million
in annual sales
+14.7% vs. YAGO
MEAT
Bacon
$3 billion in annual
sales
+12.0% vs. YAGO
Value-Added
Vegetables
$1.3 billion
in annual sales
+13.4% vs. YAGO
Source: Nielsen Perishables Group FreshFacts® 52 weeks ending 12/28/13; Includes categories with over 50% ACV selling over the 52 weeks ending 12/28/13
Citrus
$2.5 billion
in annual sales
+12% vs. YAGO
Squash and Pumpkins
$585 million
in annual sales
+13.3% vs. YAGO
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SHOPPER FOCUS CRITICAL TO UNDERSTANDING
OPPORTUNITIES
MARKETING/MESSAGING
INNOVATION
SHOPPER
CATEGORY
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GO-TO-MARKET
MERCHANDISING/
ASSORTMENT
PRICING/
PROMOTION
CURRENT
FUTURE
8
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CONSUMER PRIORITIES DRIVING TRENDS
VALUE
CONVENIENCE
QUALITY/HEALTH
MULTICULTURAL/
GLOBAL
9
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BALANCING THE PRICE VALUE EQUATION
% VOLUME SOLD ON
PROMOTION
% LIFT ON PROMOTION
AVERAGE RETAIL CHANGE
Meat
27%
139%
+3%
Produce
21%
79%
+4%
Deli
15%
85%
+1%
Bakery
13%
81%
+1%
Seafood
23%
116%
+6%
Meat department most heavily promoted, with highest lift
Source: Nielsen Perishables Group FreshFacts® 52 weeks ending 3/29/14
10
HOW MUCH HAVE MEAT PRICES RISEN SO FAR?
Some estimate retail prices on beef and pork could rise up to 25% in 2014
BEEF
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+6.3%
PORK
+5.1%
Amount beef prices have
risen over 20131
Amount pork prices have
risen over 20131
In 2014, beef cow numbers
2
have dropped
This year, pork supplies are
3
expected to shrink
20%
10%
3
CHICKEN
+2.1%
Amount chicken prices have
risen over 20131
Chicken production
4
is forecast to increase
Source: 1. Nielsen Perishables Group FreshFacts®; Total U.S. March 2014 vs. March 2013 2. Accuweather http://www.accuweather.com/en/weather-news/beef-prices-continue-to-spike/26596462 3. USA Today
http://www.usatoday.com/story/news/nation/2014/03/16/swine-virus-could-mean-spike-in-pork-prices/6472085/ 4. USDA Livestock, Dairy, and Poultry Outlook May 2014
1.9%
11
MEAT CUTS MORE PRICE SENSITIVE IN 2014
Price sensitivity among beef and pork cuts increased while chicken remained steady
$9.00
$8.00
Beef, Pork, Chicken
2014
Total U.S.
Latest 52 Weeks Ending 3/31/14
Price Elasticity of Meat Cuts
2011
$7.00
Average Retail Price
ht ©2013 The Nielsen Company. Confidential and proprietary.
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
-0.5
-1.5
Inelastic/Not Price Sensitive
Source: Nielsen Perishables Group Meat Consumer Decision Tree Price Elasticity Study 2014
Emphasize price per pound value on larger pack sizes
Smaller pack sizes; Price by the each
Include
new, unique
-2.5
-3.5 cuts/thin cuts-4.5
-5.5
Unit Elastic (-1.0)
Elastic/Price Sensitive
Secondary display placement
for versatile quick cuts
to drive basket and combat alternative channels
Bundle proteins together/cross promote
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DROUGHT EFFECT ON PRODUCE INDUSTRY
The drought is expected to have large and lasting effects on produce pricing
Total U.S. Price Elasticity
(Volume Drop from a 10% Price Increase)
• Price increases may hit least
price-sensitive categories
hardest
-14%
-16%
Packaged
Salad
-14%
Corn
• Year-round & seasonal
categories will be affected
Berries
-12%
Peppers
-11%
Melons
-11%
Tomatoes
-10%
Grapes
-9%
Broccoli
-7%
Avocados
Lettuce
ht ©2014 The Nielsen Company. Confidential and proprietary.
-6%
TAKEAWAYS
• Certain consumers will be
affected more, dependent
on the category
• Other winners and losers
will emerge across the store
if consumers switch out of
these categories
Source: Recently published joint research by Arizona State University and Nielsen Perishables Group California Drought Impact Study 2014,
13
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CONVENIENCE PLAYS KEY ROLE IN CONSUMER DECISIONS
Designed with the consumer’s
busy lifestyle in mind
PORTABLE
How quick and easy
is it to get it?
Fit their wants
and needs
FLEXIBLE
CONSUMER:
IT’S ALL ABOUT ME
QUICK
SERVICE
EATERS, NOT COOKS
More time enjoying and less time preparing
Sources: NACS, Apr. 2014; Supermarket News, Mar. 2014; Store Brands, Feb. 2013
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CONSUMERS WANT CONVENIENCE
Fully Cooked Meat
MEAL ADDITIONS AND SIDES
HOUSEHOLD PENETRATION +2.0 pts
PURCHASE FREQUENCY -1.5%
DOLLAR GROWTH
+6.1%
Value–Added Vegetables
HOUSEHOLD PENETRATION +1.6%
ht ©2014 The Nielsen Company. Confidential and proprietary.
PURCHASE FREQUENCY +3.5%
HOUSEHOLD SPEND +12.7%
READY TO HEAT OR EAT AND USAGE SPECIFIC
Prepared Seafood
HOUSEHOLD PENETRATION -1.5 pts
PURCHASE FREQUENCY +0.6%
HOUSEHOLD SPEND
Source: Nielsen Perishables Group FreshFacts® 2013
+5.6%
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RETHINKING MEAL OCCASIONS: SNACKING
WHAT’S IN?
90%
of U.S. consumers eat at
1
least one snack a day
WHAT’S OUT?
• Low fat/low trans fat/low
calorie
• High fat/high calorie
• High protein
• Processed snacks
• Nutrional ingredients
• Three large meals/day
• Traditional, unhealthy snacks
• Four to five smaller meals/day
ht ©2014 The Nielsen Company. Confidential and proprietary.
FRESH CATEGORIES GAINING SHARE OF
CENTER-STORE SNACKING OCCASIONS
Category
Dollars Per
MM ACV
Dollar Per MM
ACV % Change
Fresh Pretzels
$5K
50.8%
Salty Snacks
$17K
0.8%
Fresh Mini Cookies
$157
7.1%
Cookies
$5K
3.1%
Source: Source: 1. International Dairy-Deli-Bakery Association, 2005 2. Nielsen Perishables Group FreshFacts® 52 weeks ending 3/29/14
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RE-THINKING MEAL OCCASIONS: BREAKFAST
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FRESH BREAKFAST
CATEGORIES
DOLLAR %
GROWTH
VS YAGO
VOLUME %
GROWTH VS
YAGO
6-count muffins
+94%
+76%
Deli Breakfast Eggs
+49%
+22%
Strudel
+47%
+31%
Mini Bagels
+26%
+18%
Deli Breakfast Sandwiches
+22%
+13%
French Toast/Pancakes/Waffles
+15%
+21%
Breakfast
heating up
outside store
Source: 1. International Dairy-Deli-Bakery Association, 2005 2. Deli Business, Jan. 2014 3. Nielsen Perishables Group 52-weeks ending 2/22/14 3. Supermarket News
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CONVENIENCE NEEDS BLURRING FOODSERVICE LINES
Stores must have wide selection of deli offerings to compete with restaurant cuisines
STORE A
ht ©2014 The Nielsen Company. Confidential and proprietary.
19%
$144,745
5
6
STORE B
Deli % Dollar Share
Deli $ per MM ACV
# of Foodservice Competitors
within 2 Miles
# of Cuisines Represented
within 20 Miles
Source: Nielsen Perishables Group FreshFacts® 52 weeks ending 3/29/14
26%
$181,549
10
9
Deli Prepared
Store A
Store B
Deli Prepared Chicken
$23,882
$52,873
Deli Sandwiches
$23,307
$46,297
Deli Salads
$15,053
$21,627
Deli Entrees
$7,273
$7,957
Deli Platters
$5,506
$6,358
Deli Dips/ Spreads/ Toppings
$7,558
$6,062
Deli Sides
$2,119
$3,700
Deli Snacks
$3,950
$3,023
Deli Desserts
$1,242
$1,677
Sushi
$4,555
$792
Pizza
$865
$520
Deli Appetizers
$262
$430
Deli Soups
$397
$416
Deli Condiments
$229
$286
Deli Breakfast Foods
$169
$75
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HEALTH ON A WHOLE NEW LEVEL
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Healthy label claims winning in the marketplace
FatPresence
Presence
Fat
Natural
Natural
Preservative Presence
Vitamin MineralGluten
Presence
Free
Gluten Free
CaloriePresence
Presence
Calorie
Salt
ororSodium
Salt
SodiumPresence
Presence
Sweetener Presence
Cholesterol Presence
Grain Type
Calcium Presence
Fruit and Veg Presence
Organic
Organic
Fiber Presence
Caffeine Presence
Protein Presence
Lactose Presence
High Fructose Corn Syrup Free
HormoneAntibiotic
Antibiotic Free
Hormone
Omega Presence
No MSG
Antioxidants
Multigrain
GMO Free
CARB Conscious
Probiotic
Oil Presence
Iron Presence
Soy
Calorie 100
Fortified
Stevia
Low Glycemic
Flax or Hemp
Plant Sterol
$27.3
$26.3
$23.7
$23.3
$22.8
$18.4
$17.1
$14.9
$12.9
$11.5
$9.2
$8.1
$7.8
$7.6
$6.0
$5.3
$5.3
$4.9
$4.5
$4.0
$3.2
$3.2
$2.8
$2.5
$2.5
$2.3
$1.9
$1.2
$0.9
$0.8
$0.4
$0.2
$0.1
$43.4
$63.8
7% OF PRODUCE
IS ORGANIC
LESS THAN 1%
OF BAKERY IS
GLUTEN-FREE
ONLY 1.5% OF
MEAT IS
HORMONE/
ANTIBIOTIC FREE
11% OF
DELI IS
NATURAL
Source: Nielsen Scantrack & Nielsen Label Trends, Total U.S. - All Outlets Combined, 52-weeks ending 3/15/14 (vs. year ago), UPC-coded
19
THOSE MOST ENGAGED IN HEALTH AND WELLNESS SHOP AND SPEND
Total Retail Channels
Shopping Trips per Household
WELL BEINGS
157
FOOD ACTIVES
153
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MAGIC BULLETS
FENCE SITTERS
EAT, DRINK & BE
MERRYS
151
142
137
Basket Ring $ Per Household
WELL BEINGS
$7,754
Basket Ring $ per Trip
WELL BEINGS
FOOD ACTIVES
$7,021
FOOD ACTIVES
MAGIC BULLETS
$7,047
MAGIC BULLETS
FENCE SITTERS
$6,827
FENCE SITTERS
EAT, DRINK & BE
MERRYS
$6,210
EAT, DRINK & BE MERRYS
$49.40
$45.80
$46.72
$48.01
$45.38
WELL BEINGS are active shoppers & spend the most annually
Source: Natural Marketing Institute (NMI), Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/28/2013
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FLAVOR VARIETY AND GLOBAL OFFERINGS INCREASING
$
Volume
SPECIALTY FRUIT
MEXICAN ENTREES
SUSHI
ASIAN ENTREES
ht ©2014 The Nielsen Company. Confidential and proprietary.
COUS COUS
UNIQUE FLAVORS AND FOODS
Sources: NACS, Apr. 2014; Supermarket News, Mar. 2014 ; Nielsen Perishables Group FreshFacts® 2013
MULTICULTURAL CUISINES
21
GLOBAL FLAVORS GROW IN NON-HISPANIC STORES
DOLLARS % CHANGE VS. YAGO
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TOTAL U.S.
HISPANIC -INFLUENCED
NON HISPANIC –
STORES
INFLUENCED STORES
IMPRESSIONS % CHANGE VS. YAGO
HISPANIC INFLUENCED STORES
NON HISPANICINFLUENCED STORES
ALL SHOPPERS
TRIPS PER HH
Ethnic Rolls
6.9%
12.0%
10.4%
15.0%
1.7%
Hispanic Entrees
13.5%
12.4%
15.8%
18.3%
4.1%
Tamales
3.5%
43.4%
31.2%
49.8%
1.3%
Hass Avocados
7.8%
18.6%
15.9%
16.9%
7.7%
Guava
18.8%
58.0%
22.3%
55.7%
Source: Nielsen Perishables Group FreshFacts® , 52 Weeks Ending 8/31/13
FreshFacts® Shopper Insights Powered by Spire, 52 Weeks Ending 9/7/2013
Nielsen Perishables Group Standard Hierarchy
3.4%
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ETHNIC EXPLORERS MAKE IMPACT ON GLOBAL FOODS
Ethnic Explorers drive growth in many traditionally Hispanic fresh categories
ht ©2014 The Nielsen Company. Confidential and proprietary.
CONTRIBUTION TO $ GROWTH BY SHOPPER GROUP
55%
REMAINING SHOPPERS
53%
9%
HISPANIC
3%
36%
ETHNIC EXPLORERS
ETHNIC ROLLS
+10%
DOLLARS
44%
JALAPENO
PEPPERS
+12%
DOLLARS
REMAINING SHOPPERS*
HISPANIC
ETHNIC EXPLORERS
61%
7%
32%
REMAINING SHOPPERS
HISPANIC
did not contribute to
chorizo growth
ETHNIC EXPLORERS*
52%
48%
DELI HISPANIC
ENTREES
CHORIZO
+12%
DOLLARS
+3%
DOLLARS
Source: 1. FreshFacts® Shopper Insights Powered by Spire, 52 Weeks Ending 4/26/2014 , 2. Nielsen Perishables Group FreshFacts® 52 weeks ending 4/26/14
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WINNING IN FRESH IS IMPORTANT BUT DOESN’T
GUARANTEE TOTAL STORE SUCCESS
Cafe
Nielsen Homescan, TSV 52 weeks ending Q3 2011
Florist
Dairy
Grocery
Rx
Frozen
Cooking
Center
HBC
Produce
Seafood
Non food
ht ©2014 The Nielsen Company. Confidential and proprietary.
Deli
Beverage Center
Meat
Bakery
24
GROCERY LEVERAGING FRESH FOR INNOVATION
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FRESH AS INGREDIENT
NEW USAGE AND PREPARATION
25
FOCUSING ON THE POWER SHOPPERS
Key fresh categories brings the most powerful shoppers to the store
MOST FREQUENTLY BOUGHT BY
POWER STORE SHOPPERS
Milk
Ready-to-eat Cereal
Carbonated Soft Drinks
Eggs
Salty Snacks
Canned Vegetables
Packaged Bread
Crackers
Bananas
Shelf Stable Juices & Drinks
Cheese
Tomatoes
POWER SHOPPERS = TOP 33% OF SHOPPERS WHO
Confections
Cream & Creamers
OVER-INDEX IN SPEND and FREQUENCY DRIVE 59% OF STORE
DOLLARS ANNUALLY
Refrigerated Juices & Drinks
Deli Bulk Meat
Yogurt
Packaged Salad
Cookies
Potatoes
ht ©2014 The Nielsen Company. Confidential and proprietary.
POWER
SHOPPERS
MOST
PROFITABLE
SHOPPERS
Indicates Fresh Category
Source: Nielsen Perishables Group FreshFacts® Powered by Spire, a Datalogix Company; Time Period: 2013
26
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LEVERAGE CONSUMER PRIORITIES TO WIN
VALUE
CONVENIENCE
QUALITY/HEALTH
MULTICULTURAL/
GLOBAL
27
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REDEFINE CONVENIENCE
Source: Giant Eagle Express; Design Retail Online (photos), Hannaford, http://vmsd.com/content/mega-foods-eau-claire-wis; Photography: Mark A. Steele Photography, Columbus, Ohio
28
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EVALUATE FORMAT TO COMPETE FOR FILL-IN TRIP
Sources: Columbus Dispatch; NACS Online; http://www.thecitywire.com/node/32205
29
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SOLVE THE TRIP MISSION = WIN THE BASKET
Hyvee, Ahold
30
BLUR THE LINES TO CREATE AN EXPERIENCE
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Offering everything from quick meals and meal solutions to full in-store dining
Source: Mariano’s (Business Wire & Facebook); Leopardo (drawing); Source: KSDK-St. Louis; Photography by J. Pollack Photography
Sources: Supermarket News; quote by Randy Edeker, Hy-Vee chairman, president & CEO
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DIFFERENTIATE WITH PERSONALIZATION
ht ©2014 The Nielsen Company. Confidential and proprietary.
Win where new channels can’t compete! Leverage new trends
Source: Eataly, Whole Foods, Meijer Mperks, Marianos, Wegmans, http://www.hospitalitydesign.com/hospitalitydesign/projects/Daily-Juice-Austin-8194.shtml
32
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ANTICIPATE THE FUTURE…
http://www.startribune.com/local/blogs/259137421.html, Amazon
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KEY TAKEAWAYS…
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HOLISTIC VIEW OF STORE AND CONSUMER IS CRITICAL
WINNING AGAINST NEW COMPETITION WILL REQUIRE
RE-IMAGINING WHO YOU ARE
Source: Nielsen Perishables Group
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