BEST BETS: 2020
FINDING GROWTH FOR CANADIAN CPG
Carman Allison - VP Consumer Insights, Nielsen
Canadian Grocery Thought Leadership CEO Conference: November 2014
#thoughtlead14
@CarmAllison
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
THE CHALLENGE FOR GROWTH
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CPG STILL SPUTTERING FOR GROWTH IN NORTH AMERICA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
United States
Canada
+1.1
-0.4
+1.7
+0.3
Dollars
Units
Dollars
Units
Nielsen: ScanTrack - Total Tracked Sale
52 wks ending September 27, 2014
Nielsen: MarketTrack - Total Tracked Sale
52 wks ending September 20, 2014
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FLAT IS THE NEW GROWTH
2
2
3
2
2
Dollar Sales
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
2010
2
Unit Sales
2011
2012
2013
YTD 2014
1
0
0
0
Source: Nielsen MarketTrack, National All Channels – YTD 40 weeks to September 20, 2014 - Total Tracked Sales excluding Fresh Random Weight
4
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
WHERE DO WE FIND FUTURE GROWTH IN A
CHALLENGING ENVIRONMENT?
5
BEST BETS FOR GROWTH BY 2020
W
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
West
The Prairies will continue to lead CPG growth
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SINCE 2009
The prairies have outpaced National average Grocery Composite sales growth
+11% National
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+18% Prairies
Prairies Share
% of CPG
18.0%
2009
Source: Nielsen, HomeScan 2009 vs. 2014
+$656M
19.2%
2014
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BY 2020…
The prairies will lead Canada’s population growth
Canada
+6%
B.C.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+7%
Prairies
Quebec
+10%
+4%
Maritimes
+1%
Ontario
+6%
Source: Statistics Canada population growth estimates
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BY 2020 THE PRAIRIES WILL POTENTIALLY
ACCOUNT FOR 26% OF CPG GROWTH
+$9.5B National
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+$2.5B Prairies
Prairies Estimated
Share % of CPG
19.2%
2014
Source: Nielsen, HomeScan 2009 vs. 2014 – Grocery Composite - estimates
20.2%
2020
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THE EMERGING PRAIRIES CONSUMER…
+7%
They spend 7% more than average and
shop less on deal
26%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
19%
Of household earn >$100k, an
increase of 4 points from 2009
Of household heads are <35 years old
(vs 14% for Canada)
Top 3
Of Canada’s fastest growing
cities are in the Prairies
(Calgary, Edmonton, Saskatoon)
Source: Nielsen Panel Views Survey 2013/4 Census Canada
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BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Urbanization is redefining how we live and shop
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35% OF CANADIANS CALL THE TOP 3 CITIES HOME
% of Population
51%
Top 3 Cities: 35% Top 10: 54%
28%
Top CPG Growth Cities
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
21%
Suburban
Urban
Rural
Calgary
+5%
Saskatoon
+4%
Thunder Bay
+4%
Abbotsford
+4%
Quebec City
+4%
Vancouver
+4%
Edmonton
+4%
Regina
+4%
Kelowna
+4%
Hamilton
+3%
Toronto
+3%
Source: Nielsen PanelViews Survey, Statistics Canada – Census 2011 MarketTrack: G+D+MM 52 weeks to September 20, 2014
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CONSUMERS ARE REDEFINING HOME OWNERSHIP
Source: CMHC 2012 Report
67%
Single Dwelling -11%
homeownership
Multi +14%
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URBAN, SUBURBAN, RURAL
Suburban
Rural
$4,102
$4,357
1-2
2-4
2-3
<44
35-54
>45
>$100K
$70K - $100K
<$50K
Urban
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$3,443
Age
Source: Nielsen HomeScan, Grocery Composite, 52 weeks ending September 20, 2014
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THE URBAN CONSUMER…
12%
Less likely to own a car
13%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
12%
Bring prepared food home or
get meals delivered (vs. 8% Rural)
Eat out more often
(vs. 8% Rural)
32%
Source: Nielsen Panel Views Survey 2013/4
Of primary grocery shoppers
are male (vs. 19% Rural)
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BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Urbanization is redefining how we live and shop
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
The male shopper is a key decision maker
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MALE SHOPPERS ARE OFTEN OVERLOOKED BUT
ACCOUNT FOR 24% OF PRIMARY SHOPPERS
% of Households (>50% of Shopping)
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24% 16%
60%
17% are male
22% are female
only households
only households
Source: Nielsen Panelviews June 2014
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ENSURE IT’S EASY FOR MALES TO FIND WHAT THEY NEED
Male shoppers spend less but shop more often; less likely to browse and more likely
to buy only what they need
Avg Basket Size
Avg Trips / Year
Shopping Opinions % Agree
I tend to buy only what I need
when I go to the grocery store
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$32.41
$37.72
161
152
43%
54%
Given the opportunity I like
spending time browsing in the
grocery or food store
50%
Source: Nielsen Homescan, National All Channels, Total Expenditures, 52 Weeks ending July 26, 2014; Nielsen Panelviews June 2014
60%
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THE MALE SHOPPER CAN BE MORE PROFITABLE
24%
Of male spend is on perceived deal
(28% for female)
46%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
65%
Use coupons (67% for female)
Typically prepare a shopping list
(78% for female)
48%
Source: Nielsen Panel Views Survey 2013/4
Are aged > 55 years
(40% for female)
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BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Urbanization is redefining how we live and shop
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
The male shopper is a key decision maker
Millennials will surpass Boomers as #1 consumer
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Copyright ©2012 The Nielsen Company. Confidential and proprietary.
MILLENNIALS AND BOOMERS: THE TOP 2 CONSUMER
POWERHOUSES
<19
‘Gen Z’
19-37
‘Gen Y’
38-47
‘Gen X’
48-67
‘Boomers’
68+
‘Greatest’
16%
27%
14%
28%
14%
4.7
9.8
5.0
Millions
5.7
Source: Statistics Canada – Census 2011
9.4
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CURRENTLY MILLENNIALS ARE UNDER REPRESENTED
IN PURCHASING POWER
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Millennials’ Importance
27%
14%
12%
% of Population
% Household Heads
% of CPG $’s
9.1 M
2.0 M
11.7 B
Source: Source Nielsen Homescan – 52 weeks to March 29, 2014
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MILLENNIALS WILL SURPASS BOOMERS BY 2020
2010
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
8.9 M
9.7 M
Total
Canada
26%
28%
2020
10.0 M
9.4 M
34.2 M
11.0 M
8.3 M
26%
24%
38.4 M
Millennials
Source: Statistics Canada M: Millions
2030
26%
20%
42.1 M
Boomers
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THE CPG GROWTH ENGINE WILL SWITCH GEARS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
By 2020…
MILLENNIALS
BOOMERS
+$12.5 B
-$4.3 B
+107%
-9%
Source: Nielsen Homescan 52 weeks to March 29, 2014 – HH <35 years – Based on older generation spend
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TO MAXIMIZE FUTURE GROWTH OPPORTUNITIES,
WE FIRST NEED TO OPTIMIZE REVENUE
More than ever
consumers are
addicted to
promotions
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% OF SALES WITH A PRICE AT A RECORD HIGH
% Dollars Sold on TPR
?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
36%
2020
2014
27%
2007
Source: Nielsen MarketTrack, National GB+MM+DG - 52 week periods ending September 20, 2014
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TradeEfficiency
Efficiency
Normative
ROI
Trade
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
2014 3Q
2014 2Q
2014 1Q
2013 4Q
6.0%
2013 3Q
$0.60
2013 2Q
6.5%
2013 1Q
$0.65
2012 4Q
7.0%
2012 3Q
$0.70
2012 2Q
7.5%
2012 1Q
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$0.75
% OF WEEKS ON PROMOTION
TRADE EFFICIENCY
PROMOTION INEFFICIENCY IS GETTING WORSE
Frequency of
% of Weeks on Promotion
Promotion
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WE ALL KNOW PROMOTIONS CAN BE INEFFICIENT
The majority of trade promotion events don’t break even
67%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DON’T BREAK EVEN
33%
MAKE MONEY
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
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WE ALL KNOW PROMOTIONS CAN BE INEFFICIENT
The majority of trade promotion events don’t break even
67%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DON’T BREAK EVEN
33%
MAKE MONEY
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
ELIMINATING
22%
OF PROMOTIONS
WOULD INCREASE
SALES REVENUE
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CONSUMERS ARE STOCKING-UP – IT MAY LEAD TO
BIGGER BASKETS, BUT IT’S A TRIP KILLER
Units / Trip
+3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Units
/ Trip
Trips / HH
-5%
Instant Coffee
Butter
Dry Pasta
Hot Cereals
Flat Water
Vegetable Juice
Granola Bars
Deodorant Sticks
Laundry Detergent
Fruit Drinks
+17
+17
+13
+13
+11
+11
+11
+10
+9
+8
Trips
/ HH
-5
-18
-5
-4
-9
-15
-9
-14
-15
-16
Source: Nielsen Homescan Cross Outlet Facts – Canada - 52 weeks to June 28, 2014
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ANOTHER FIX IS TO INCREASE PROMOTED PRICES
TO ALIGN WITH REGULAR PRICE INFLATION
Regular Prices
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Feature Prices
+4%
-1%
+5% Price
Divergence
Increasing feature prices by +5% is a $1.1 billion dollar opportunity
Resulting in a market growth from +1.7% to +3.4%
Source: Nielsen MarketTrack, National G+D+MM 52 weeks to September 20, 2014
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OUR STRATEGY NEEDS TO CHANGE
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
“
Why does fewer, bigger and better
always end up as just more?
Fewer, smaller and better may be
the promotion strategy that changes
the dynamic
”
32
BEST BETS FOR GROWTH BY 2020
West
Allocate future resources to support growth
Smaller stores, shop local, meal solutions
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Male Shopper roles continue to evolve = profitability
Younger, ethnic, baby boom echo, technology
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Questions regarding the content of this presentation, contact:
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Carman Allison, email carman.allison@nielsen.com
@CarmAllison
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