HEALTH & WELLNESS THROUGH THE EYES OF THE DIVERSE CONSUMER Copyright ©2014 The Nielsen Company. Confidential and proprietary. PRESENTATION SPEAKER & PANELISTS Todd Hale Dr. James Gavin Maryellen Molyneaux T.J. McIntyre Nielsen Partnership for a Healthier America NMI Boulder Brands #Consumer360 2 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HOW DOES THE CPG INDUSTRY GROW IN THE CURRENT ENVIRONMENT? WHAT CAN FUEL GROWTH? Innovation Crowded shelves Slowing population growth Product enhancements Underdeveloped consumer segments Stagnant wages WHAT’S WORKING AGAINST GROWTH? #Consumer360 3 WHY SHOULD WE CARE ABOUT HEALTH & WELLNESS? Copyright ©2014 The Nielsen Company. Confidential and proprietary. HEALTH & WELLNESS OUTPACING RETAIL GROWTH 0.1% 13% 17% Total store growth rate (units) Organic label claims since 2010 Avg. annual unit growth for the top 5 fastest growing healthy label claims Source: Nielsen Strategic Planner with Nielsen LabelTrends, Total U.S. - All Outlets Combined, 52-weeks ending 04/12/2014 (percent vs. year ago), UPC-coded 5 Copyright ©2014 The Nielsen Company. Confidential and proprietary. AUDIENCE QUESTION WHICH IS DRIVING GROWTH THE FASTEST? Gluten Free GMO Free Hormone Antibiotic Free Low Glycemic Organic #Consumer360 6 Copyright ©2014 The Nielsen Company. Confidential and proprietary. “THE WHOLE WORLD HAS A WEIGHT PROBLEM” 13% Global Perspective on Obesity & Overweight Population 47% 37% 28% The U.S. accounts for more than a tenth of the obese people worldwide, with only 5% of the population 14% Increase in Obesity and Those Overweight Since 1980 Adults 5% Percentage Who Were Obese and Overweight in 2013 Children Source: Institute for Health Metrics and Evaluation at the University of Washington; Frank Pompa, USA TODAY #Consumer360 7 Copyright ©2014 The Nielsen Company. Confidential and proprietary. FOCUS ON HEALTH IS NOT A PASSING FAD EVEN IN AMERICA’S BALLPARKS, THE SHIFT IS CLEAR CHICAGO Hot dogs Cotton candy Adobo mango chicken sausage Fries ANAHEIM Panini with zucchini, carrots, mushrooms, tomatoes & pesto sauce PHOENIX Black-bean burger on a whole-wheat PHILADELPHIA Sausages Veggie cheese steak (vegan beef) Nachos COLORADO "Infield Greens" build-your-own salad #Consumer360 8 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WHY DOES HEALTH & WELLNESS MATTER? 65% 35% of the world’s population live in countries where overweight & obesity kills more people than underweight of U.S. adults are obese Source: World Health Organization; Centers for Disease Control 2012 Leading to some of the foremost causes of preventable death… heart disease, stroke, type 2 diabetes & certain types of cancer #Consumer360 9 Copyright ©2014 The Nielsen Company. Confidential and proprietary. BUT THE EPIDEMIC IS NOT EVENLY DISPERSED MULTI CULTURAL AGE Age Adjusted Obesity Rate Obesity Rate Among 48% 35% of Non-Hispanic Blacks 60 plus 43% 40% of Hispanics 33% INCOME & EDUCATION of Non-Hispanic Whites 40 to 59 30% 20 to 39 11% of Non-Hispanic Asians Source: Centers for Disease Control & Prevention • Higher income woman are less likely to be obese • Women with college degrees less likely to be obese #Consumer360 10 Copyright ©2014 The Nielsen Company. Confidential and proprietary. THE NEED IS APPARENT PANEL QUESTIONS • What can NMI tell us about the evolution of consumer involvement in health & wellness over the past 15 years? • What role can the private sector play in delivering healthier options & supporting the goal for a healthier America? Any success stories? • Generally speaking, who has led the way toward increased health & wellness focus – retailers or manufacturers – and why? #Consumer360 11 HOW ARE CONSUMER SEGMENTS RESPONDING TO HEALTHY OPTIONS? Copyright ©2014 The Nielsen Company. Confidential and proprietary. GOOD NEWS: OLDER & YOUNGER POSE UNTAPPED OPPORTUNITY FOR WINNING WELLNESS CLAIMS SALES PER 1,000 HOUSEHOLDS INDEX BY AGE OF FEMALE HEAD OF HOUSEHOLD Female head Under 35 Label claim: 35 – 45 55 – 65 65+ Low Glycemic GMO Free Gluten Free Hormone Antibiotic Free CONSUMERS ARE APPROACHING PREVENTION DIFFERENTLY Organic High Fructose Corn Syrup Free Lactose Free Protein Presence Preservative Free Index is: Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products 120 or greater between 80–120 80 or less #Consumer360 13 Copyright ©2014 The Nielsen Company. Confidential and proprietary. IS LOWER ATTRACTION AMONG LOW INCOME AN ISSUE WITH AWARENESS, AVAILABILITY OR PRICE? SALES PER 1,000 HOUSEHOLDS INDEX BY HOUSEHOLD INCOME < $20k Label claim: $20k – 29.9k $30k – 39.9 $40k – 49.9l $50k – 69.9 $70k – 99.9 100k+ Low Glycemic GMO Free Gluten Free Hormone Antibiotic Free CONSUMERS ARE APPROACHING PREVENTION DIFFERENTLY Organic High Fructose Corn Syrup Free Lactose Free Protein Presence Preservative Free Index is: Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products 120 or greater between 80–120 80 or less #Consumer360 14 Copyright ©2014 The Nielsen Company. Confidential and proprietary. ARE HIGHER SALES AMONG ASIANS DRIVEN BY ETHNICITY, EDUCATION OR INCOME? SALES PER 1,000 HOUSEHOLDS INDEX BY RACE/ETHNICITY Label claim: Caucasian African American Asian Hispanic (any race) Low Glycemic GMO Free Gluten Free Hormone Antibiotic Free CONSUMERS ARE APPROACHING PREVENTION DIFFERENTLY Organic High Fructose Corn Syrup Free Lactose Free Protein Presence Preservative Free Index is: Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products 120 or greater between 80–120 80 or less #Consumer360 15 Copyright ©2014 The Nielsen Company. Confidential and proprietary. A FOCUS ON FRESH REVEALS THE VARIATION FRESH PRODUCE SALES INDEX MULTI CULTURAL GENERATION INCOME 164 136 103 86 105 90 104 95 64 Black Asian Hispanic (any race) Source: Nielsen Homescan, 52 Weeks Ending 12/28/2013, UPC-coded Millennials Gen X Boomers Greatest Generation Under $25k Income $200k 16 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HEALTH-FOCUSED SHOPPERS ARE THE ONES YOU WANT FRESH PRODUCE $ BUYING RATE INDEX 41% higher than expected Higher spending Expected produce buying rate Lower spending 20% lower than expected Least engaged Source: NMI; Nielsen Homescan, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded Most engaged #Consumer360 17 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WHO’S LEADING THE WAY PANEL QUESTIONS • Are highly-engaged consumers the biggest health & wellness opportunity group for manufacturers & retailers, or does the opportunity lie somewhere else along the spectrum? • What factors do you think influence healthy lifestyles among low-income Americans, with regard to awareness, availability and/or price? • Boulder Brands’ Udi’s and Glutino brands market directly to consumers seeking gluten-free. Tell us about your experience catering to such a specific group & health need. What resonates with them? • What impact have you seen social media make on how consumers approach health? How can brands, retailers & government leverage it to promote health & wellness? 18 Copyright ©2014 The Nielsen Company. Confidential and proprietary. HEALTH & WELLNESS THEMES RESONATING ACROSS CONSUMER GROUPS HEALTHY SNACKING Source: Nielsen, NMI KNOWLEDGE IS POWER FOOD AS MEDICINE #Consumer360 19 Copyright ©2014 The Nielsen Company. Confidential and proprietary. WHERE SHOULD YOU START? PANEL QUESTIONS • Do you care to comment on any of these three themes? • Do you see the private sector getting ahead of government mandates when it comes to better nutrition? Or is the government leading the way? • What are the next big health & wellness trends our audience should consider as they look for growth in a challenging retail landscape? #Consumer360 20 AUDIENCE Q&A