© 2011 Bord Bia, The Futures Company
© 2010 The Futures Company
2

Introduction
The aim of this report is to provide insight into the prevailing situation and prospects for the food and drinks industry in the Republic of Ireland (ROI) and Great Britain (GB) over the coming year, identifying the key opportunities and challenges for the sector.
The economic situation in ROI and GB still remains difficult and a return to a level of growth that will improve prospects for consumers in the imminent future appears unlikely. The domestic pressures weakening demand and the potential for recovery - namely austerity measures, high unemployment, together with a fragile housing market and banking system – are now coupled with new pressures, in particular inflation.
Relative to other countries in the EU,
ROI has had the lowest levels of price increases, but these have very recently started increasing and consumers are beginning to feel the pain. Concerns over inflation prompted the European
Central Bank to increase interest rates in April, further exacerbating the rising costs borne by consumers, especially for those on tracker mortgages.
© 2011 Bord Bia, The Futures Company 4
In GB, the Consumer Price Index increased by 4% in May and this rise in prices has placed increasing pressure on all consumers, coming at a point in time where there has been wage stagnation.
The outcome has been a fall in real household disposable income of 0.5% at the end of 2010 - the first such fall since
1981.
In both markets, there is a growing sense amongst consumers that harder times may be ahead and, whilst the resulting effects on spending may be less immediate and have less magnitude than the shock of the start of the recession, many consumers recognise that they will have to reduce their expenditure in the year ahead to get by.
Consequently, companies will have to work even harder to get their share of wallet and potentially be more astute in their targeting of consumers that offer them real value.
In this report, we build on learnings from the previous five waves of research. For our 2010 report, we carried out in depth qualitative research with Irish consumers, which gave us deeper insight into how they were coping with current circumstances and changing their shopping behaviours as a result. This time, we have spoken to a range of different types of respondents in the GB to add to and build on this rich source of insight.
In our last report, we introduced three consumer groups to explain how people‘s experience of the downturn varies depending on their level of financial comfort and their ability to afford their current lifestyles. We have gone back to these groups to explore how the landscape is changing and what this means in terms of the relative attractiveness of ROI and GB.
For more information on this report or help in applying the findings to your business please contact:
Information Services
Tel: +353 1 668 5155
Email: info@bordbia.ie

Executive Summary
Variable patterns of economic growth currently are being interpreted as poor economic performance: The lack of a clear pattern is leading to the return of a more pessimistic perspective, suggesting that low or no growth is not necessarily viewed positively by consumers. More Irish and British consumers believe that their economies are performing very badly when compared to seven months ago. Whilst the outlook in ROI has always been more negative, the patterns for both markets highlight that a more pessimistic view is emerging.
Key factors still indicate to consumers that their domestic economies are in poor condition:
Domestic demand is weak with consumer confidence at historic lows, not surprising given the downward pressure on wages and the impact of the austerity measures such as cuts in public sector pay and an increase in income tax levels damaging disposable incomes.
Equally, unemployment is still a strong negative influence on the consumer
© 2011 Bord Bia, The Futures Company 6 outlook. Potentially, it will not be until unemployment starts to diminish that consumers will begin to believe that the economic situation is improving.
Consumers’ expectations are that the current situation will characterise the longer-term outlook: Similar proportions of consumers in both markets feel the longer term outlook over the next 3-10 years will be characterised by either
‗periods of economic growth followed by periods of economic decline as the world economy becomes more volatile‘ or that
‗we are for destined low levels of economic growth‘. Combining responses, consumers holding these views represent eight in ten of the population.
New financial pressures are emerging for all: Consumers in both
Ireland and Britain are noticing the impact of increased costs in many areas of day to day expenditure.
Though annual inflation in Ireland is low at 0.9% relative to other countries in
Europe, and certainly in comparison to
Britain, where the GB Consumer Price
Index increased by 4% in May, this recent increase is the fastest acceleration experienced in Ireland in more than two years.
Consumers intend to curb their spending in the months ahead: The overarching intent of consumers is to cut expenditure in the coming 12 months to cope with budgetary pressures rather than utilise savings or take on debt. The challenge to get consumers to open their wallets may become more acute, even if they have the means to spend.
Control and the pursuit of a good deal are defining characteristics of the ‘new normal’: Consumers in both
Ireland and Britain have learnt to adjust to the circumstances of the new environment and taken on the behaviours to survive within their means or protect their lifestyles.
The pursuit of value is likely to continue to be a feature of the marketplace irrespective of whether the economy improves.

Executive Summary
Consumers still expect to splash out now and then: Though it feels like their pre-recession dreams are now out of reach for many consumers, having some light relief amongst all this focus on tight money management is still very relevant. 70% of Irish and 61% of
British consumers agree they need to treat themselves to something nice/fun even if they have to tighten up their budget in other places.
The pursuit of a deal is not just about necessity: Whilst there is a need to balance the level of promotional activity necessary to maintaining consumer interest without risking undermining longer-term brand and business value, intelligent use of promotions can be a trigger used to build purchase levels and play to some consumers‘ desire to gain satisfaction from getting a bargain.
Consumers’ experience of the current situation varies: Recognising that different groups will be deploying particular coping strategies and mechanisms will be critical. Those businesses that are able to target and communicate in such a way that aligns with the sensibilities and priorities of each group is likely to find greater value in the market place.
Businesses will do well by understanding the mindsets of each group and making their proposition and messaging fit.
The discrepancies between ROI and
GB highlight that the that prospects in Britain are better and a larger consumer base exists that still has a high capacity to spend: Though
British consumers‘ sense of caution has recently increased, a third of the population has not been directly affected by the recession, and even for those that have, the cutbacks have been less severe than for Irish consumers.
© 2011 Bord Bia, The Futures Company 7
Scepticism : Cutting through the clutter and cynicism to make sure you are offering genuine value
Control: Help consumers feel they are on top of it all
Acceptance: It and optimism
’ s here to stay - balance realism
New aspirations:
Demonstrate why your products count as
‘ essentials ’ , not
‘ expendables ’
Treading carefully :
Reassure cautious consumers about the worth of their purchases

The market outlook
A more pessimistic view returning
In both ROI and GB, it has been hard for consumers to judge whether the economy is truly on a path to growth. In
ROI, there was an upswing with GDP increasing by 1.7% in Q3 2010, but negative growth in the following quarter with a contraction of 1.6%.
In Britain, fears of a double dip recession were also raised with a drop in growth of 0.5% at the end of last year, though the most recent figures released by the ONS suggest these fears can be allayed for the moment with growth in
Q1 this year of 0.5%.
However, this lack of a clear pattern is leading to a return of a more pessimistic perspective - low or no growth is not necessarily a positive for consumers. As shown in Chart 1, more Irish and British consumers believe that their economies are performing very badly when compared to seven months ago. Whilst the outlook in ROI has always been more negative, the patterns for both markets highlight that a more pessimistic view is emerging.
CHART 1
How well do you think things are going for the Irish/British economy these days?
Don' Know Very Well Fairly Well Badly Very Badly
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
18
54
Republic of Ireland
18
65
54
52
38
65
43
100%
90%
80%
52
70%
60%
36
Great Britain
55
38
21
15
43
25
59
50%
61
57
25
49
40%
54
49
44
50
30%
44
40
29 29
20%
25
4
4
10
4
6
10%
4
0%
7
3
10
15
Jul 08 Jan 09
May 11
Nov 09 Sep 10
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
50
24
14
6
May 11
© 2011 Bord Bia, The Futures Company 9

The market outlook
Various factors underpin the likelihood of continued limited growth for both economies
Though the Irish Central Bank forecast that GDP will grow by 0.9 per cent this year, according to its latest bulletin released in mid April, this view is not shared by all other commentators.
Consensus Forecasts, which surveys
250 different views, envisage a slight contraction overall for 2011 of -0.1% with a return to growth of 1.7% next year.
Regardless of which view turns out to be correct, it is undeniable that the Irish economy will continue to struggle and consumers believe there will not be a return to the very strong levels of growth experienced in Ireland during the preceding decade.
Domestic demand is weak with consumer confidence at historic lows, not surprising given the downward pressure on wages and the impact of the austerity measures such as cuts in public sector pay and an increase in income tax levels damaging disposable incomes.
© 2011 Bord Bia, The Futures Company 10
Many of these pressures are also true for the British economy. The
Conservative-led coalition announced the most drastic budget cuts in living memory in October 2010, outstripping measures taken by other advanced economies which are also under pressure to sharply reduce public spending.
George Osborne, the chancellor of the exchequer, revealed dramatic reductions to core departments over the next four years, a £7bn fall in welfare support and 490,000 public-sector job cuts by 2014-15.
Signs are that these cuts are starting to bite. For example, real household disposable incomes fell by 0.5% at the end of 2010, the first annual fall for three decades. When combined with more recent taxes rises in VAT and
National Insurance, this pattern of declining spending power may become a longer-term factor for GB consumers.
“This is Ireland’s last chance to impress. Failure to do so will have serious negative consequences.”
Alan McQuaid, chief economist at
Bloxham Stockbrokers in Dublin
“In 2011, real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years.”
Mervyn King, Governor of the
Bank of England and Chairman of the Monetary Policy Committee

The market outlook
Unemployment is still a strong negative influence on the consumer outlook
Major differences between ROI and GB exist in the level of unemployment.
According to statistics released by the
CSO at the end of May, the standardised unemployment rate is 14.7% in ROI, while it is 7.8% in the UK.
But the true impacts of these statistics is not just in the effects of unemployment on those who no longer have jobs. Unemployment, or the fear of it, is a strong driver of broader attitudes. Chart 2 highlights the halo effect unemployment can create with
81% of consumers in ROI and 50% in
GB saying they know someone who has been made redundant in the past 12 months.
Potentially, it will not be until unemployment starts to diminish that consumers will begin to believe that the economic situation is improving.
CHART 2
Do you know anyone else who has been made redundant from their job in the last 12 months
100%
100%
Yes No Don't Know
Yes No Don't Know
100%
80%
47
24
13
80%
17
72
17
46
40
80%
50
49
46
40
50
49
60%
72
60% 60%
40%
20%
0%
52
75
40%
86
82 81
52
40%
57
20%
48
50
52
27
20%
27
0%
Aug 08 Jan 09 Nov 09 Sep 10 Jan 09
0%
57
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
48
50
© 2011 Bord Bia, The Futures Company 11

The market outlook
A feeling that the outlook will not change for a while
Chart 3 shows that both Irish and
British consumers recognise that the current state of affairs is not likely to change in the immediate foreseeable future. Similar proportions of consumers in both markets feel the longer term outlook over the next 3-10 years will be characterised by either ‗periods of economic growth followed by periods of economic decline as the world economy becomes more volatile‘ or that ‗we are destined for low levels of economic growth‘. Combined, consumers holding these views represent eight in ten of the population. Very few consumers are expecting or planning for a brighter future.
A new government brings some fresh hope for Ireland
Earlier this year in February, elections were held in Ireland bringing in a new government. The election was prompted by the struggles of the incumbent government in dealing with the financial crisis, and it appears, that one month after coming into power, the honeymoon period for the new government is not over. Irish consumers have more confidence that the policies of their government will have a positive impact on the economy in the next 12 months than their British counterparts: 47% versus 24%. It is interesting to note this is a vast improvement from seven months ago when Irish consumers‘ confidence in their government‘s policies was as lukewarm as British consumers‘ today.
A lack of faith in the banking system is a still evident
Given the close connection between the state, the conduct of the banking sector and the consequent economic upheaval in Ireland, it is not surprising to find that Irish consumers hold the banking sector in poor regard: nine out of ten
Irish consumers feel that they now have less trust in banks and that they serve their own interests, not the interests of their customers.
Equally, many Irish consumer feel that lending from the banks (a lack of it) will have the greatest negative impact on the economy over the next 12 months.
CHART 3
What do you think are the prospects for the UK/Irish economy over the next 3-10 years?
None of these
We will see periods of economic growth followed by periods of economic decline as world economy becomes more volatile
100%
ROI
We are destined for low levels of economic growth
The recession was a blip we will return to strong levels of economic growth
Don't know
GB
90%
80%
70%
60%
50%
40%
30%
40
41
42
39
20%
10%
7
9
8
11
0%
Source: The Futures Company Feeling The Pinch 2011
(see appendix for base sample sizes)
© 2011 Bord Bia, The Futures Company 12 Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)

The market outlook
Inflationary price pressures impacting day to day expenditure
Consumers in both Ireland and Britain are noticing the impact of increased costs in many areas of day to day expenditure.
Though annual inflation in Ireland is low at 0.9% relative to other countries in
Europe, and certainly in comparison to
Britain, where the GB Consumer Price
Index increased by 4% in May, this recent increase is the fastest acceleration experienced in Ireland in more than two years.
Differing factors are at play in each market: recent Irish inflation has been driven by the growing cost of clothing, energy and mortgage interest rate rises, whilst British consumers are more worried about the rising cost of food.
For both the top worry is the price being paid at the petrol pump.
Notably, unlike the start of the recession where unemployment was the defining factor that dictated the extent to which consumer where affected, these new pressures are more universal and have impacted a wider base of the population.
© 2011 Bord Bia, The Futures Company 13
CHART 4
How worried are you by each of the following issues? (% very worried)
Republic of Ireland
40%
35%
30%
25%
20%
15%
10%
5%
0%
+17%
39%
Chg Sep 10 to Mar 11
+11%
31%
+4%
28%
+5%
25%
+2%
18%
-2%
17%
+2%
15%
The cost of petrol
Rising interest rates
Enough money to retire on
The cost of electricity and gas
Levels of debt Losing your job
The cost of food
Great Britain
40%
35%
30%
25%
20%
15%
10%
5%
0%
+16% Chg Sep 10 to Mar 11
40%
+5%
19%
+3%
27%
+8%
32%
+0%
14%
+1%
12%
+6%
23%
The cost of petrol
Rising interest rates
Enough money to retire on
The cost of electricity and gas
Levels of debt Losing your job
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
The cost of food

The market outlook
 Consumer see limited prospects for a significant improvement in economic growth
The outlook for consumers is not positive and we are starting to see signs rising concern and pessimism in both ROI and GB.
Stronger and more sustained change may be needed before consumers believe that a return to prosperity is on its way, in particular unemployment
(its reduction) and the extent to which it touches peoples‘ lives will be a key signal of improvement. Currently, unemployment, amongst other measures, show little signs of sustained positive change.
 Emerging pressures are affecting all consumers
Whilst direct or indirect experience of unemployment varies, consumers across the board will have noticed the price of day to day items going up.
In ROI, recent inflation has been driven by the growing cost of clothing, energy and mortgage interest rate rises, whilst British consumers are more worried about the cost of food. For both, the top worry is the rising prices being paid at the petrol pump.
When combined with deflationary pressures on disposable income such as tax increases and wage stagnation, the prospect of further declines in consumer expenditure and increasing pursuit of better value in the marketplace is highly likely in the coming months.
© 2011 Bord Bia, The Futures Company 14

The consumer perspective
Rising pressure on household budgets
Continuing economic uncertainty has meant consumers are giving careful thought about how manage their finances.
In Ireland, there has been a return to saving as consumers move away from a willingness to take on debt and a desire to build up reserves. The savings ratio in
Ireland has increased from a low 3.9% of disposable income in 2007 to 12% last year, depressing overall household expenditure, some say, unnecessarily.
British consumers have also increased their levels of savings but less dramatically, with the savings ratio falling back to 5.4% in May 2011.
Whilst recent pressures have meant
60% of Irish consumers and 43% of
British consumers have dipped into their savings to make ends meet recently, this may be a short-term pattern. As shown by Chart 5, the broader intent of consumers is to cut expenditure in the coming 12 months to cope with budgetary pressures, rather than utilise savings or take on debt. The challenge to get consumers to open their wallets may become more acute, even if they have the means to spend.
© 2011 Bord Bia, The Futures Company 16
Increase a lot
CHART 5
How will your spending over the next 12 months change compared with last year?
Republic of Ireland
Increase a little
Increase a lot
Great Britain
Increase a little
2% 10% 4% 10%
30% 35%
33% 24% 28%
Stay about the same
Stay about the same
21%
Decrease a lot
Decrease a little
Decrease a little
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
Decrease a lot

The consumer perspective
Need to maintain control over spending habits
Consumers have become more cautious in their spending patterns. Consumers are demonstrating scrutiny over almost every purchase they make. The data highlighted below illustrates the extent to which this behaviour is widespread in both ROI and GB.
Consumers in both ROI and GB have learnt to adjust to the circumstances of the new environment and taken on the behaviours to survive within their means or protect their lifestyles.
It is clear that consumers‘ relationship with time has fundamentally changed.
Many consumers are now willing to invest time in order to have the peace of mind they are making the most of their budget. Pre-recession, it seemed that the primary aim of consumers was to save time at any cost.
Savvy shopping is not just a necessity, it can be about achieving personal satisfaction
Whilst for some consumers, the need to track spending is a matter of necessity and a means of survival on a tight budget, for almost all, there is often an additional benefit of the satisfaction of getting a bargain. One of the respondents interviewed described this as ‗beating the system‘, suggesting that the keen interest in deals can be as much about the thrill of the chase, not just the value of the deal on offer.
“ Whilst my wife and I are sitting together watching telly, she will open two windows
[on the computer] and go through the total shop at supermarkets. It ’ s actually quite satisfying.
”
Young family, Male, UK
“ I ’ m much more aware of price now. I probably spend 2 seconds more on every product comparing and seeing which is the best value.
”
Older family, Female, Ireland
“I find myself thinking twice before making even the smallest day to day purchases”
71% of Irish consumers agree
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
62% of British consumers agree
© 2011 Bord Bia, The Futures Company 17

The consumer perspective
The pursuit of value is likely to continue to be a feature of the marketplace irrespective of whether the economy improves
As shown in Table 1, regardless of whether their finances improve or not, consumers expect to continue to utilise a wide array of value seeking strategies.
These may be strategies that are predominantly to do with making their money go further, whether this is to do with going for bargains and using coupons, or finding cheaper ways of achieving similar outcomes, for example seeing friends at home.
This pattern is true of both Irish and
British consumers and current perceptions around future behaviour have little changed very little when compared to research results from seven months ago.
Notably, coupons and money appear the key strategy in both markets and, with the rise of digital channels like Groupon to connect consumers with these deals, it is unlikely that manufacturers will be able to break this pattern of discounting.
© 2011 Bord Bia, The Futures Company 18
TABLE 1
% agreeing I would probably do this any way whether or not my finances get better or worse
Action ROI GB
‘ 10 ‘ 11 ‘ 10 ‘ 11
65 68 69 67
Use coupons and vouchers that offer money off in shops
Spend time shopping around for good deals
Keep track of exactly how much money you are spending
Socialise with friends at home rather than going out
Put off buying something until the sales
Use cash instead of a credit card to make purchases
Buy environmentally friendly products when shopping
Buy Fairtrade products
Use public transport
Go on holiday in the UK/Ireland
64
58
56
46
47
44
67
63
61
55
46
42
68
67
58
50
45
39
63
62
56
47
40
40
40 42 39 40
44 42 44 42
43 41 43 42
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)

The consumer perspective
Little indulgences remain important
Though it feels like their pre-recession dreams are now out of reach for many consumers, having some light relief amongst all this focus on tight money management is still very relevant. 70% of Irish and 61% of British consumers agree they ‗need to treat themselves to something nice/fun even if they have to tighten up their budget in other places‘.
Prior to the recession, the focus was often on seeking experiences over material possession. Now it is clear that aspirations are relatively smaller scale.
Table 2 shows the pent-up demand for splashing out and what consumers would do given a better financial situation. Top are indulgences; more sensible choices, eg putting money away for retirement come further down.
People are thinking about how they can get to what they want without having to go to great expense. McDonald‘s is doing well as it allows families to go out together at relatively low cost. One UK respondent described how she decorated her living room with themed characters rather than go to Disneyland as alternative way of offering a fun experience to her young son.
© 2011 Bord Bia, The Futures Company 19
Action
Eating and drinking out more
Shop for fun and pleasure
Go on holiday abroad
Upgrade my car
Put money away for retirement
Go to events (theatre, festivals, music etc.)
Pay off debts
Replace your car with a low emissions model
Give money to charities
Go to a pub/bar/club
“
TABLE 2
% agreeing I am more likely to do this if my finances get better
I used to get T-bone steak and not get sirloin cuts which are half price but taste same.
”
Older family, Male, Ireland
ROI GB
‘ 10 ‘ 11 ‘ 10 ‘ 11
64 67 53 53
59 61 51 47
59 59 45 48
57 57 40 40
50 54 45 43
53 52 42 45
48 47 41 42
37 42 26 25
43 42 35 35
39 40 33 35
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)

The consumer perspective
 The pursuit of value and good deals has become a key feature of everyday life
Consumers have learnt to look for deals and good offers when they shop.
Whether a necessity or not, getting a good deal is a strong motivation for all. Every purchase is open to scrutiny and time often given to ensure a good choice is being made.
Deals and price promotion are likely to remain as important mechanisms in the marketplace to encourage consumers to buy; without them, it will be hard to capture the eye of the consumer in the coming months.
 The pursuit of a deal is not just about necessity
Whilst there is a need to balance the level of promotional activity necessary to maintaining consumer interest without risking undermining longer term brand and business value, intelligent use of promotions can be a trigger used to build purchase levels and play to some consumers ’ desire to gain satisfaction from getting a bargain.
Consumers are still looking to treat and indulge themselves, accepting trade-offs in certain parts of the lives to realise spending in others.
Promotions that enable consumers to achieve their aspirations are likely to be appreciated, such as allowing them to eat out more or simply releasing funds to shop for pleasure or fun. Bundling may offer companies an effective way to gain a greater share of wallet by meeting a need for value on one item to purchase a more premium item in another category. Cross category promotions may also allow consumer to recreate indulgent experiences at home more cost effectively.
© 2011 Bord Bia, The Futures Company 20 Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)

Three key consumer groups
In the last Feeling the Pinch report, we introduced three consumer groups which reflect the different degrees to which people have been affected by the recent economic events. Chart 6 illustrates the factors which pull these groups apart for both ROI and GB combined – namely, their financial vulnerability and exposure to debt.
All Hands on Deck: This group has been most affected by the recession, for example one in seven have been made redundant in the last 12 months, and, as a result, they have been obliged to radically review their lifestyles and reduce their debts.
Choppy Waters: Consumers here have not had to make the dramatic changes of those in the above group, but have become more careful with their money in order to maintain as much of their prerecession lifestyles.
Plain Sailing: This group is less likely to have been directly affected, being less financially exposed and with fewer commitments. Consumers here are older, over a third have paid off their mortgages and very few still have children at home to support.
45%
How long could you cover living expenses if you or someone in your household suddenly became jobless?
Less than 1 month
9 months or more
43%
5%
22%
20%
7%
CHART 6
% agreeing strongly their level of debt is ruining quality of life
3%
1%
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
33%
© 2011 Bord Bia, The Futures Company 22

Three key consumer groups
Having first identified these groups in our last survey carried out at the end of
August 2010, after an interval of around seven months, it is now possible to analyse which groups have increased and those which have shrunk.
Chart 7 plots these changes, showing the different dynamics going on between the Irish and British populations. As highlighted earlier, British consumers have recently been feeling the squeeze more significantly than previously. They have been hit by continuing increases in prices, as well as the impact of public sector cuts. As a result, the group feeling the financial struggle most acutely, All Hands on Deck , has grown in
Britain but, remains proportionally smaller than in the ROI.
In both markets, the Plain Sailing group has shrunk. Here differences between
ROI and GB are stark. The proportion of
UK consumers in the Plain Sailing group is around on third of the population, almost double the proportion in ROI.
The largest group in both markets is the
Choppy Waters group, representing a little under half of all consumers in both markets.
© 2011 Bord Bia, The Futures Company 23
CHART 7
60%
50%
40%
30%
20%
10%
0%
100%
90%
80%
70%
Republic of Ireland Great Britain
35.6%
41.5%
34.0%
48.1%
100%
90%
80%
70%
60%
50%
40%
30%
17.6%
47.6%
22.9%
46.9%
20%
34.8%
22.9%
17.8%
10%
0%
Sep 10 Sep 10
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
31.2%

Three key consumer groups
Though this group includes those who may be genuinely struggling and facing real hardship, they should not be dismissed as they tend to invest significant time, effort and energy in their food decisions. One in seven of this group, versus only one in 14 from the
Plain Sailing group, agree strongly they spend a lot of time doing research about food.
Feeling a sense of shame
As many in this group have dependent children, they feel unhappy about the compromises they have had to make in purchases for their family, particularly their children. They want to find ways to offer them what they feel they are used to.
They are keen to maintain well-loved family routines, even if it means doing things differently. In one family we spoke to, the mother would get a cheap chicken to make up their usual Friday night curry, but she tried to hide this from her children.
Negotiation where possible
Consumers in this group have realised that they can get better deals if they ask
© 2011 Bord Bia, The Futures Company 24 for them, and are becoming increasingly confident at challenging the offers they receive from the companies they deal with. On occasion this approach can even extend to utilities and lifestyle services such as satellite TV.
Deploying creativity as a coping strategy
Though people in this group were resigned to their situation, it was not the case this was passively accepted. Many displayed ingenuity and resourcefulness.
This could be to ensure they did not leave themselves open to temptation – one consumer interviewed in the research decided she was better off leaving her credit card with another family member for safe-keeping; or else it could be going for more entertaining at home.
“ Now we have ‘ pot nights ’ : one of us has everyone else over and we all bring a course so they don we went out we night, now it
€10. It ’
’ t have to cook. When
’ d spend €50 a
’ s no more than s also quite fun, and you get to swop recipes.
”
Younger family, Female, Ireland
“ We ’ re negotiating on absolutely everything now – gas, electricity, house insurance, Sky subscription.
We didn ’ t use to do that.
Older family, Male, Britain
”

Three key consumer groups
This is the largest group in both ROI and GB, now representing just under half of all consumers. Plain Sailing consumers appear to have now moved into this group in ROI, swelling the numbers significantly.
Change here has not been as emotionally draining as for the All
Hands on Deck group, but foregoing certain purchases has been the source of some regret.
Torn between saving and spending
This group does have the ability to put money aside for the longer term future, but this will often mean compromising on the way they are used to spending now. This can mean consumers are conflicted as how to behave and where to prioritise their efforts.
Prioritising what’s essential and what’s expendable
These consumers are attempting to manage uncertainty by figuring out what is most important to them and how they can make sure they get this.
They are deploying various approaches to achieve this, including carefully watching prices, thinking about which
© 2011 Bord Bia, The Futures Company 25 brands they can replace without compromising on experience, as well as delaying larger purchases. One consumer interviewed in the research described how she hoped to go to
Portugal with her friends this year, but decided to wait until 2012 to avoid pushing themselves to their financial limits.
Keen on personal rewards
Even if the price or quantity of treats had been curtailed by the recession, this group remains clear they expect to be able to treat themselves. In response to the challenges of the current economic situation and often increased pressure at work and at home, little rewards are seen as only fair. As the top quote illustrates, these consumers will make cutbacks in some areas but not all to maintain these treats. Companies can actively play to this desire amongst this group to treat and reward themselves.
“ I used to spend £70 every six weeks at a hairdresser – now
I use a £3.50 home dye kit.
But I still get my expensive perfume and make-up.
Pre-family, Female, UK
”
“ I have tried to protect spending on my kids – I haven ’ t stopped their swimming or music classes.
”
Family, Female, Ireland

Three key consumer groups
This is the group which has been least directly affected by the recession and though they are not necessarily more affluent than the other groups, they tend to have higher disposable incomes as they are not so burdened by debt, mortgages and dependent children.
With the ability to still spend with relative ease, they represent an important target market.
Relaxed about personal finances but sensitive to the prevailing mood
This group has planned their finances well and, given this, they are in the enviable position of being able to ride out unexpected peaks and troughs in money with ease. Despite this, it is not the case they are ready to spend with freely without constraint; rather, they are keen to use coupons and vouchers to prove they are being responsible with their money, and in effect, have rightfully earned their position of financial comfort.
Alert and astute consumers
Individuals in this group constantly reevaluate their financial position and plans to ensure they remain able to
© 2011 Bord Bia, The Futures Company 26 afford their current lifestyles. On a more day to day basis, this group remain alert to rooting out value and often will go to great lengths, more out of principle, rather than actual need, to ensure they get the bargain they have spotted. One female consumer interviewed highlighted that she had been furious about the price of bell peppers suddenly increasing from 60p to 80p in her local store, and as a result, she had made a point of going to another retailer to get her peppers for three at £1.60. The extra distance she travelled may have negated the saving, but that wasn‘t the issue!
Waiting for social permission to spend
This group has no reason not to spend, but they do not feel it is appropriate to do so. All the media discussion about the dire state of affairs has made this group take up bargain-hunting as a sensible precaution. Others use their assets to support others close to them, in particular their children.
“ All my friends have started doing these things to save money and so it seems silly not to save when you hear there ’ s the option.
”
Older family, Female, Ireland
“ Yesterday I managed to get a real bargain – a toaster and kettle set half price. It made my day – just to think I had beaten the system in a small way!
”
Empty nest, Female, UK

Three key consumer groups
 Not all consumers have been affected equally by the recession.
Nor, do they face the same challenges in the year ahead.
Recognising that different groups will be deploying particular coping strategies and mechanisms will be critical. Those businesses that are able to target and communicate in such a way that aligns with the sensibilities and priorities of each group is likely to find greater value in the market place.
 Businesses will do well by understanding the mindsets of each group and aligning their proposition and messaging.
Consumers that are struggling, but sometimes resentful of this struggle, will value help in removing the stigma or shame that may go with certain compromises they are making. Others will appreciate help in being creative and resourceful to gain better value or access the indulgences that remain important to them. Others still have the capacity to spend but need validation that this is appropriate and socially acceptable.
 Finally, the discrepancies between ROI and GB highlight that the that prospects in Britain are better and a larger consumer base exists that still has a high capacity to spend.
Though British consumers ’ sense of caution has recently increased, a third here are in the Plain Sailing group that has not been directly affected by the recession, and even for those that have, the cutbacks have been less severe than for Irish consumers.
© 2011 Bord Bia, The Futures Company 27

Key challenges and opportunities
This current patterns of consumer behaviour are set to continue
As consumers have recognised, the current situation of slow growth, flat or even decline in spending power, coupled with limited prospects for improvements in employment, mean that the economic and financial challenges faced by all are likely to continue over the short to medium term (and even beyond).
In this environment, it will be critical to understand how to unlock the spending power that still exists, whether amongst the more financially comfortable consumer groups in ROI, or by looking outside the domestic economy. In our previous report, we explored in detail the business perspective and found those organisations the most optimistic about their prospects were those looking outside ROI.
Revisiting ‘SCANT’
In our last report, we introduced five characteristics of the new normal, summarised by the word ‗scant‘. This concept is still relevant and we will review the nuances behind each of the characteristics and how they have shifted.
© 2011 Bord Bia, The Futures Company 29
SCEPTICISM:
Get back to building trust
To
Cutting through the clutter and cynicism to make sure you are offering genuine value
CONTROL:
Help your consumers gain or maintain control
To
Help consumers feel they are on top of it all
ACCEPTANCE:
Make sure you are fit for purpose, not just trying to fit in
To
It ’ s here to stay - balance realism and optimism
NEW ASPIRATIONS:
Make sure you are marketing to the right need
To
Demonstrate why your products count as not ‘ expendables ’
‘ essentials ’ ,
TREADING CAREFULLY:
Help mitigate the risks of buying
To
Reassure cautious consumers about the worth of their purchases

Key challenges and opportunities
Need to offer promotions with good reasons to believe
In the current shopping environment, consumers have become all too used to expecting deals and promotions when evaluating what purchases to make. It is true that these have had significant impact on people‘s spending – the extent of promotions on food in the UK
(circa 40% of all products) is one of the factors credited with bringing a slight decrease in inflation.
Through the consumer interviews, it is also clear that consumers appreciate all these offers, and after friends and family, major food retailers are next on the list for the sources of support people recognise have helped them manage financially over the past couple of years.
However, there is a risk of complacency and that consumers take such a level of promotional activity for granted. They may also perceive them as a ploy which benefits the organisation behind the deals, rather than the end consumer.
For any organisation considering how to gain interest and traction, creating offers that are simple, stand out and add value to the business as well the consumer is critical.
© 2011 Bord Bia, The Futures Company 30
Evidence
“Supermarket deals always come with a catch.
”
43% of Irish consumers agree
41% of British consumers agree
“Promotions like 'buy one get one free' are just a way for shops to make more money.”
56% of Irish consumers agree
54% of British consumers agree
“ I ’ m not interested in loyalty cards, it ’ s just a marketing thing . They ’ re getting more out of it than you are.
”
Pre-family, Male, Ireland
“ You just need to check out the different supermarkets – you know they are competing with each other on price.
”
Older family, Female, Britain
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)

Key challenges and opportunities
Create promotions that catch the eye
Japanese clothes retailer Uniqlo has found a novel way of encouraging GB shoppers give the brand a big presence on Twitter -
- by reducing the price of clothing pieces every time someone sends a tweet about an item. The more tweets users send about a particular item, the lower the price goes.
Implications
Move beyond a focus on price
Wild Child vintage clothing in Dublin has changed its pricing structure completely: clothes, shoes and bags are sold by weight. Taking such a radical approach forces customers to reappraise how they estimate whether they are getting a good deal or not.
Help consumers feel good about themselves as they manage their money
Marks and Spencer has teamed up with
Oxfam whereby people who bring in their old M&S clothes to be recycled are rewarded with a M&S voucher. People are incentivised to go into the store to spend but with a feeling they ‗have earned it‘.
How can you make deal that cuts through the clutter?
© 2011 Bord Bia, The Futures Company 31
How can you show consumers different ways of assessing value?
How can you make consumers feel they are giving back through a promotion?

Key challenges and opportunities
Help consumer manage the uncertainties they face
Though consumers are resigned to their situation and have learned the behaviours to survive, this does not stop them feeling anxious about managing their finances.
Consumers are going to considerable effort to develop approaches to coping, whether this is about reading self help finance books, setting up spreadsheets to record different items of expenditure, or simply being more planned when it comes to food shopping and cooking.
In such an environment, they will value support or advice that helps them to achieve their plans or maintains the commitments and intentions they have set themselves. Bearing in mind the sceptical attitudes, it is critical this support and contact is not perceived as salesmanship. Furthermore, certain consumers are ready to take the tools they are given to help and do the hard work themselves. There is a need to make sure the business and its products are ready for such scrutiny.
Evidence
“It ’ s important for me to get a greater sense of control in every aspect of my life.
”
81% of Irish consumers agree
64% of British consumers agree
“Whether or not my finances improve, I am likely to write out shopping lists.
”
69% of Irish consumers agree
69% of British consumers agree
“ I plan my meals more and cook for two nights running – for example spaghetti bolognaise can be easily reheated two nights running. Then it ’ s cheaper and there waste.
”
Family, Female, Ireland
’ s no
“I never used to do this but now I buy meat half price and freeze what
I don’t need straightaway for later.”
Older family, Female, Britain
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
© 2011 Bord Bia, The Futures Company 32

Key challenges and opportunities
Help consumers know the deal is available
Groupon negotiates huge discounts— usually 50-90% off—with popular businesses. They send the deals to thousands of subscribers in their free daily email, and the businesses get a ton of new customers. Gap recently sold $11 million in Groupons in the US.
Implications
Give consumers flexibility in financial payment
Bed and breakfast hotels in Italy organised a promotion where they allowed travelers to pay for their stay through simple, old fashioned barter. The promotion which ran during November
15-21, 2010 was touted as the first edition of ―B&B&B‖ – bed and breakfast and barter in Italy. According to the initiative website, B&Bs who adhere to the
Barter Week would accept, among other things, ―home made jams, dvds, music lessons, cheese, repair handy work‖.
Everything but money.
Help consumers check they have got the best deal
Asda is offering a ‗price guarantee‘ to customers. People are encouraged to enter their purchase details online, which are then checked to make sure their basket of goods would not have been cheaper if bought elsewhere. If it is, Asda has committed itself to refunding the difference.
Can you leverage sites like Groupon to reach new consumers?
How can you help give consumers more flexibility over payment?
Can you offer price matching or demonstrate that they are getting the best deal?
© 2011 Bord Bia, The Futures Company 33

Key challenges and opportunities
Consumers know the current status quo is likely endure for the foreseeable future
Consumers accept that the situation is likely to remain challenging in the immediate future, and that within the next couple of years, they are not planning for a return to the growth levels seen before the recession.
Consumers face limited job prospects, continuing increases in the cost of many everyday items, together with public sector cuts impacting the payment of benefits and the provision of certain services. In this environment, consumers are looking for companies that are cognisant of the troubles they may be facing, and providing appropriates services and products.
However, there is also a need for optimism as well as realism: there is a strong sentiment amongst consumers that things could not get much worse.
Responding to such an attitude requires providing reasons for hope and encouragement, as well as supporting consumers as they are learning to do without. belt a bit now and then.”
Older Family, Female, Britain
Evidence
“ Since the recession, I feel a greater need than ever to be as self-sufficient as possible.
”
“Since the recession, I have learnt I can do without many things and still be happy.
“Things have got to get better. I just want to be able to loosen my
”
78% of Irish consumers agree
60% of British consumers agree
71% of Irish consumers agree
51% of British consumers agree
“I had to a take a pay cut last month, at the same as the mortgage went up. I’m still down €300 a month but I’ ve adjusted and am ok with it now.”
Pre-family, Female, Ireland
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
© 2011 Bord Bia, The Futures Company 34

Key challenges and opportunities
Reward a smile
Unilever created the world's first smileactivated ice cream vending machine. The underlying technology is sophisticated, but the concept is simple: consumers walk up to the machine, smile and are rewarded with a frozen treat.
Implications
Connect with your customers ’ concerns
To support youth mental health initiatives, O2 has invited customers to share happy thought on Twitter– a donation is made to mental health charities for each happy thought.
Searching for reasons to be positive is very relevant in a country with high levels of unemployment.
Give consumers licence to look on the bright side
Four years ago, Maxwell House donated a large portion of its television ad budget to charities across the country as part of its
“ Brew Some Good ” marketing campaign.
For the latest iteration of the feel-good campaign, Maxwell House is encouraging consumers to take an optimism break, turning two user-made YouTube videos into 30-second television commercials.
How can you encourage your consumers to look on the brighter side of life?
How can you demonstrate your recognition and support for the challenges being faced by consumers?
© 2011 Bord Bia, The Futures Company 35
What can you do to help consumers develop a positive outlook?

Key challenges and opportunities
Consumers have worked out what their new luxuries are
Consumers are applying a great deal of scrutiny to their purchases and looking to see where they can make cut backs without compromising too much on their quality of life.
Depending on the starting point, this may mean more or less radical changes.
How individuals categorise their basic and essential items of expenditure versus those which could be regarded more as indulgences and treats will vary.
Consumers have recognised they need to scale back but don‘t want to completely neglect the principles important to them in the face of financial constraint. Irish consumers feel much more strongly about buying Irish. At a time when people are feeling they are having to compromise on the brands and products they are getting, origin and the sense they are supporting the communities in which they live can be important.
“Some of the dreams I had for myself before the recession are probably now out of reach.”
64% of Irish consumers agree
53% of British consumers agree
“It is important to buy Irish/British products to support the economy, even if they sometimes cost more“
64% of Irish consumers agree
51% of British consumers agree
“We still have Sky – we thought about cutting it, but have changed our package instead. It’s worth it as we are spending so much time at home.”
Older Family, Male, Britain
“I still get my meat from the butcher. It’s less fatty and it gives back to the community.”
Pre-family, Male, Ireland
“If things get better, I think I would stick with many own label products, but I would get nice buns from the bakery.”
Family, Female, Ireland
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
© 2011 Bord Bia, The Futures Company 36

Key challenges and opportunities
Make more of all your local attributes
This Irish fashion design label, available in high street shops like Top Shop and also in smaller clothing retailers, is brand building by making a virtue of its
Irishness and the fact that each piece is a limited edition – but available at still . relatively low cost.
Implications
Innovate to create new forms of value and appeal
O‘Brien‘s Sandwich Bar in Dublin was a success story of the Irish boom, but struggled last year with much competition from cheap imitators. Rather than lowering their prices, O‘Brien‘s brought in a celebrity chef to create a gourmet sandwich range, with considerable success, creating a new reason for customers to stay with their products.
Redefine products to create new affordable treats
Starbucks have recently introduced a new range of mini cakes in their cafes. These
‘ petites ’ are specifically designed to be appealing and fun, and little treats which can be shared between friends. This then helps to position them as more acceptable forms of indulgence.
How you can leverage your local credentials to tap into current consumer aspirations?
© 2011 Bord Bia, The Futures Company 37
How can you make your products and brands fresh and newly appealing?
What new formats can you produce to create a new reason to purchase?

Key challenges and opportunities
Consumers are becoming more proactive in their search for certainty and stability
People are giving more thought than ever before to the purchases they make.
They are investing time in researching prices and special offers, as well connecting with friends and family to seek their recommendations. Many are also making use of online resources to check the validity of their purchase decisions.
For a large majority, caution remains at the level of being careful with how money is being spent now. Few of those we spoke to felt ready to commit significant funds to saving for the longer term future. People‘s finances had to improve considerably before they felt ready to invest in this way – their focus is on getting the most out of now.
Evidence
“Lately, I’ve become more likely to consider the potential risks of each decision I make”
74% of Irish consumers agree
60% of British consumers agree
“If I buy something that is not on sale, I feel like I have overpaid.”
56% of Irish consumers agree
51% of British consumers agree
“When we renew our house insurance, we will ring 8 or 9 providers and the same with car insurance.”
Family, Female, Ireland
“We have put our big projects on hold, like redecorating the house. Low interest rates mean we are getting less from our savings and we are eating into our capital.”
Empty Nester, Female, Britain
Source: The Futures Company Feeling The Pinch 2011 (see appendix for base sample sizes)
© 2011 Bord Bia, The Futures Company 38

Key challenges and opportunities
Make sure you are represented fairly in consumer conversations
This site allows users to compare prices between supermarkets and restaurants and to report on good and bad deals they find in food around Ireland. The site has begun to attract advertising and has a large and active readership.
Implications
Find new ways for people to sample
The Air France food truck toured
Manhattan for five days in March, with menus created by Michelin-starred chef
Joël Robuchon. The truck‘s location was announced each day on the Air France
Facebook and Twitter streams, along with invitations to photograph the truck for entry into a competition for Air France travel goods. Whilst sampling the culinary delights of the truck, diners could also enter to win a pair of Air France tickets to
Paris, and were encouraged to donate to
City Harvest to feed the hungry and less fortunate in the city
Build longer-term commitment to the brand
Launched on Australia Day in January this year, Broo aims give local buyers of its beer a stake in the company. Consumers need only purchase between one and 50 cartons of Broo online for AUD 54.99 each, and they're entitled to 10 free shares in the company for every carton they purchase. As many as 10 million shares will be given away.
Do you know what kind of conversations consumers are having about your products?
© 2011 Bord Bia, The Futures Company 39
How can you find more imaginative ways to allow consumers to try before they buy?
Can you give your consumers a greater sense of ownership?

Technical Appendix
ECONOMIC ANALYSIS
In order to build up an understanding of the macro context in which we were conducting our research, we carried out analysis of the Irish and British economy through desk research using a variety in internal and external resources.
CONSUMER RESEARCH
Our consumer research consisted of an update of the Feeling The Pinch quantitative (FTP) survey together with a qualitative element.
FTP Quant survey
The survey was carried out online with a nationally representative sample of 500
Irish adults. The fieldwork was carried out in the last week of May 2011.
Previous waves of the FTP survey have been carried in July 2008, June 2009,
Nov 2009 and Sept 2010.
A similar survey has also been carried out in the UK with a sample of 1,000 adults.
Qualitative depths
We recruited twelve respondents across
Great Britain to represent each of the three consumer groups we have identified ( Plain Sailing , Choppy Waters ,
All Hands on Deck ) across a range of lifestages and income brackets. The respondents were invited to fill in a short scrapbook exercise and this was then discussed and explored in follow up face to face in home depth interviews lasting
90 minutes.
In our last survey (fieldwork carried out at the end of last year), we carried out qualitative research with a range of Irish respondents. Insights and quotes from this research have also been referenced in this report.
Quality statement
All projects are completed in compliance with ISO 20252.
All researchers / interviewers working on this project are fully trained in quantitative research methods and have been briefed on the requirements for this project in full.
All research sessions were conducted in accordance with the agreed questionnaire.
The analyst has kept accurate and descriptive records of the analysis process, to ensure than any analyses undertaken can be replicated at a later date.
This document has been checked for accuracy of reported data and material.
© 2011 Bord Bia, The Futures Company 41

Technical Appendix
Detail
Questionnaire content
Questionnaire length
Name of the research provider
Name of the research consultancy
Sampling method
Incentives
Notes
The questionnaire content varies slightly each wave, the Feeling the Pinch study includes a number of core questions which are tracked wave on wave and some additional questions which are added for one or more waves only to track current topics of interest.
Approx. 20-25 minutes
Lightspeed Research Ltd.
The Futures Company
Quota sampling
Lightspeed Research
’ s online panellists are given an incentive to participate in research. The incentive takes the form of points awarded for survey completion. The number of points is based on survey length, complexity, and incidence rate. Points may be redeemed for items such as cash, gift certificates, music downloads, and
DVDs.
Sample size (n=) UK 2008
UK 2009 (1)
UK 2009 (2)
UK 2010
UK 2011
IRE 2008
IRE 2009 (1)
IRE 2009 (2)
IRE 2010
IRE 2011
2268
2110
1002
1010
1014
500
545
501
506
501
© 2011 Bord Bia, The Futures Company 42

Detail
Research methodology
Notes
Self completion questionnaire shown online
(CAWI)
Fieldwork dates UK 2008
UK 2009 (1)
UK 2009 (2)
UK 2010
UK 2011
IRE 2008
IRE 2009 (1)
IRE 2009 (1)
IRE 2010
IRE 2011
August 2008
January 2009
November 2009
September 2010
May 2011
August 2008
January 2009
November 2009
September 2010
May 2011
Technical Appendix
Weighting details
Weighting efficiency
Post-stratification. Additional information available on request.
UK 2008
UK 2009 (1)
UK 2009 (2)
UK 2010
UK 2011
IRE 2008
IRE 2009 (1)
IRE 2009 (2)
IRE 2010
IRE 2011
92%
95%
97%
98%
100%
62%
76%
55%
98%
89%
Subgroup sample size
Country Year
UK
IRE
2010
2011
2010
2011
Segment
Plain Sailing
Choppy Waters
All Hand on deck
Plain Sailing
Choppy Waters
All Hand on deck
Plain Sailing
Choppy Waters
All Hand on deck
Plain Sailing
Choppy Waters
All Hand on deck
80
235
186
221
114
209
183
Unweighted sample size
352
476
182
318
475
© 2011 Bord Bia, The Futures Company 43