Nielsen
Watch & Buy Presentation for TAM Ireland
1
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
1
The Economic
Environment
and Consumer
sentiment
2
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The gloomy state of the economy in Ireland is well documented.
€9.44bn
Exchequer
deficit
June 2012
(€10.8b LY)
Retail Sales
Index -0.1%
May 2012 vs
April 2012
GDP -1.1%
Q1 2012 vs
Q4 2011
CPI
+ 1.7%
June 2012 vs
2011
Unemployment
@ 14.9%
June 2012
3
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
It’s no surprise that consumer confidence is low, but it is stable, in
line with sentiment throughout 2011.
Ireland Consumer Confidence Index Q2 2012
% pt +/
-1
+6
-1
-8
-1
-12 -19 -14 +3 +1 +1
-
-3
-4
Source: Nielsen – Global Online Survey Consumer Confidence Q2 2012 – Ireland results
+3
-
-4
+4
-
4
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
The economy, job security, and debt remain our biggest concerns.
Health
Parents Welfare/Happiness
Worklife Balance
Food Prices
“Q – What are your biggest concerns
over the next 6 months?” Q2 2012
19%
16%
16%
10%
9%
7%
5%
5%
4%
2%
IRELAND
Biggest
Concerns
The Economy
Job Security
Debt
Fear of Rising Bills
Childrens’ Welfare / Education
Fuel Prices
Source: Nielsen – Global Online Survey Consumer Confidence Q2 2012 – Ireland results
5
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Irish consumers continue to tighten their belts on both domestic and
lifestyle spending.
Lifestyle
DOMESTIC
Save on gas & electricity 68%
(+0%)
Spend less on new
clothes 66% (+2%)
Switch to cheaper grocery
brands 67% (+2%)
Cut down on take-aways
58% (-2%)
Cut down out of home
entertainment 57% (-3%)
Cut down on telephone
expenses 46% (-5%)
Delay replacement of major
appliances 43% (+1%)
Delay upgrading PC or
mobile 43% (+0%)
(% Chg Diff vs Q1 2012)
Cut down on holidays/
short breaks 52% (+3%)
Cut down / buy cheaper
brands of alcohol 34% (+4%)
Use my Car less
often 38% (-2%)
“Q. Compared to last Quarter Q1 2012, which of the following
actions have you taken in order to save on household expenses?”
6
Source: Nielsen – Global Online Survey Consumer Confidence Q2 2012 – Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Some volume growth returns for FMCG to give good nominal
growth, despite the easing inflation.
Ireland - Fast Moving Consumer Goods market dynamics – Q2 2012 growth rates (versus Q2 2011)
7
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
• Consumer sentiment is stable
• Q1 volume growth amongst the best in Europe
• Shoppers cope with increased spend by:
–Cutting back
–Switching brands
–Buying on deal
8
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
2
Changing
Shopping
Behaviour
9
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers say their average monthly grocery spend has increased by
about 12% in the last year, mainly on Fresh.
Average Monthly Spending
(Food, Grocery & Personal Care vs. Fresh Food Only)
35%
Base: All Supermarket shoppers (2010 n=1016 , 2011 n = 998)
Ref: Q9a/b
10
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Irish shoppers keep shopping around, with an average of 3.3 different
stores visited in past 4 weeks, though this is slightly down on 2010.
Number of Supermarket/Hypermarket Used - Stores Used in Past 4 Weeks
(2011)
12
1 store
8
19
18
2 stores
25
28
3 stores
13
14
5 stores
6
5
6 stores
Base: All supermarket shoppers (n=939)
Ref: Q13b
Average/(shops
)
2010
23
25
4 stores
7 stores
2011
1
2
3.3
3.4
11
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Even in these difficult times shoppers are open to trying new things,
New Product Development can still be a good hook.
Adoptiveness
Base: Hypers/Supers (n= 959)
Ref: Q26
12
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
On-line grocery shoppers are small in number but are increasing
their buying occasions and do so for convenience. More are
checking out offers on-line.
Reasons for Visiting Supermarket/Hypermarket Website
Base : All have visited Supermarket/hypermarket in last month (n=284)
Ref: Q129
13
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
3
The Search for
Value – price
& promotions
trends
14
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers perceive increasing grocery prices, particularly outside of
Dublin.
Variation of food prices across banners
By HH income
By Region
Base: All Supermarket shoppers (n = 959)
Ref: Q79
15
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Only 1/3 of shoppers claim to be on auto-pilot when choosing their
grocery store. Most are engaged and open to experimentation. 40% are
influenced by promotions or advertising.
Level of adoption
71%
When a new store opens in my area, I will always go
and check it out.
66%
The decision on which store to shop at for household
groceries is an important decision and it pays you to
put effort into getting it right.
40%
I often change stores because of
interesting advertising or
promotions.
37%
I just to go to the same store all the time.
12%
Grocery stores are all the same.
Base: All Supermarket shoppers (n = 959)
Ref: Q25
16
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers still claim to be highly aware of price changes.
Base: All Supermarket shoppers (n = 959)
Ref: Q24
17
Source: Nielsen – ShopperTrends 2011 Ireland results
Ref: Q24
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers are becoming more promotionally sensitive prompting
more shoppers to change stores and brands for promotions.
Promotion Sensitivity
Base: All Supermarket shoppers (n = 959)
Ref: Q23
18
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Make your promotions work much harder
82% of shoppers will change brands or stores based on promotions
66% of shoppers agree that:
The decision on which store to shop at for household groceries is an important
decision and it pays you to put effort into getting it right.
40% of shoppers agree that:
I often change stores because of interesting advertising or Promotions.
TELL THEM ABOUT IT
19
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Categories such as Deodorant are now selling almost half on promotion,
and promotion levels have increased in many categories.
Source: Nielsen ScanTrack Multiples - UNITS
20
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Resist Temptation To Chase Price Sensitive Shoppers
Everywhere.
• Price is the key driver of profit
• Margin conceded will be
very hard to recover later
• Price cuts can be matched & neutralised by
competitors
• Lower prices erode consumer perceptions of value
• Narrower profit margins lead to reduced
investment in innovation and brand building
Source: Nielsen AAC Checkout Conference 2010
21
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Continue To Invest In Retaining Buyers As Well As
Attracting New Ones.
• Successful brands build sales through attracting new
buyers and retaining existing ones
• Successful brands need high equity to retain consumer
loyalty during a downturn
• Brands in the Hair and Beauty categories showing
strength against Private Label - Still Retain 88% share
• Sector has increased spend in Irish advertising by 20%
this year.
Source: Nielsen AAC Checkout Conference 2010, Nielsen Scantrack, Nielsen Ad Dynamix
Image Source: Paul Sapiano Photography; licensed
under Creative Commons
– Attract new buyers through advertising, promotions and
innovation
– Retain existing consumers through strong product delivery and
brand equity
22
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
4
The Search for
Value –
Discounters
continue to
grow
23
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Discounters still win on lowest priced store perceptions, but Tesco
has regained ground.
Lowest Price Store
Base: All Supermarket shoppers (2010 n=1008, 2011 n = 959)
Ref: Q20
24
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Discounters have reached 13% value share, but they perform even
better in many categories.
Trade Performance _ MAT TY
€10.6n
Data to Latest BiMonth
Total Market: ScanTrack ROI Total Product: Sum(PROD) Source: ScanTrack Data to: Latest BiMonth
(5)
Specialist off licences includes Alcohol sales only
Copyright The Nielsen Company.
Nielsen and Nielsen logo are trader
trademarks of CZT/ACN
Version 2.2
Independents includes Confectionery, Cigarettes, and Alcohol sales only
Scantrack categories only ie excludes fresh, random weighted etc
25
Source : Strategic Planner June 2012, Total Available Coverage
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Aldi and Lidl media spending increase for first six months of
2012.
+25% increase in media spend
(v. 2011)
TV spend 20% of total
+32% increase in media spend
(v. 2011)
TV now 12% of total spend
Source: Nielsen Ad Dynamix (Jan to June 2012)
26
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
5
The Search for
Value –
Private Label
continue to
grow
27
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Private Label in
Numbers
€2.2 billion
Branded
products
€8.4
Worth
billion
the MAT Value of Private Label
Branded
declining at
21%
the Value Share Private Label
currently has
-1.2%
value
Year on Year
€99.8 million
the amount Private Label has grown
in the last year
+4.7%
Categories included are – Alcohol, LAD, Sprits, Bakery,
Cigarettes, Canned Food, Grocery, Chilled/Frozen
Food, Household, Health & Beauty, Confectionery and
the rate of Value Growth of Private
Tobacco
Branded
playing in a
79% Arena
Label Year on Year
28
Source : Strategic Planner June 2012, Total Available Coverage
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Increased advertising of Private Label by the retailers, focussing on
quality and value for money.
The new Supervalu Range
Aldi – ‘Like brands. Only cheaper.’
Tesco – new ‘Everyday Value’ range
Own Label
“brand
building”
by the
Retailers
focussing
on
quality
Lidl – ‘Quality for Less’
and
value for
money
29
Source: Nielsen Media 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Private Label remains weakest in Health & Beauty and Alcohol,
categories where there is some of the highest investment in brand
equity.
Frozen
52% Share
Household
35% Share
Bakery
24% Share
Wine
16% Share
Grocery
35% Share
Confectionary
17% Share
Health & Beauty
12% Share
30
Source : Strategic Planner June 2012, Total Available Coverage
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Shoppers plan to buy more Private Label, particularly in categories
where Private Label is already strong.
Buy
more
Categories store brands bought past 12 months
Base: All Supermarket shoppers (n = 426)
Ref: Q119, Q120
Buy
Buy
the same
less
31
Source: Nielsen – ShopperTrends 2011 Ireland results
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Trends in the media sector showed an increase in media spend by
supermarkets & grocery chains in 2011
9% increase in
media spend
(2011 v 2010)
for the Supermarket
& Grocery chain
sector
€99.8 million
Increase Private Label
5%
Value Growth of Private Label
In 2011, TV spots in
sector reached
98.7% Adults 15+
99% Hskprs
1 or more times…
37% increase
in TV spend
6% increase
in Press
spend
Source: Nielsen – AD Dynamix 2011 v 2010 (ex UTV/Ch4) & Nielsen/TAM Ireland Jan-Dec 2011, All spots on ROI (ex UTV/Ch4) channels
for Supermarket and Grocery chain sector) Consolidated
32
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
5
Winning
Categories in
the Recession
33
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Trends in the Top 20 fastest growing categories show consumers looking
for value @ home options.
cooking dinner
@ home (meal
kits, meat
extracts, Oils)
preparing
lunch @
home
(peanut
butter,
spreads)
Cheaper
options:
loose
tobacco
Nesting: Home
Baking, Home
cleaning, Ignition
products
34
Source :Nielsen Strategic Planner June 2012, Total Available Coverage (exc H&B)
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
On to Off-trade switch continues as consumers cut back on big night out
for big nights in. 1% fall in consumption of LADs overall.
On-Trade
-6%
Lager
Perry
+5%
-18%
Wine
Alter
(LAD: beer, cider, perry, spirit mixers, wine
alter) Total OnTrade MAT to May 2012 VOL
Stout
+ 11%
-9%
Off-Trade
+6%
(LAD: beer, cider, perry, spirit mixers, wine
alter) Total Off incl Dunes MAT to May 2012
VOL
Cider
Ale
+12%
-1%
Spirit
Mix
NABLA
B
-10%
+1%
35
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
There is still a place for Premium though, as trends in Ice Cream and
Pet food show.
Ice Cream
TOTAL
SUPER
PREMIUM
+1%
+24%
Cat Food
TOTAL
SUPER
PREMIUM
SINGLE
SERVE
+0%
+27%
Coffee
TOTAL
SINGLE
SERVE
+11%
+31%
36
Source: Nielsen Total Scantrack inc Discounters April 2012
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Currently 63% of Irish people feel they are overweight, higher than
the EU average of 58%.
At the moment do you consider yourself?
Ireland
Ireland
European Union
•
•
•
•
•
•
•
•
•
•
Underweight (5%)
About the right weight (31%)
A little overweight (42%)
Somewhat overweight (15%)
Very overweight (6%)
Underweight (5%)
About the right weight (37%)
A little overweight (38%)
Somewhat overweight (16%)
Very overweight (4%)
Source: Nielsen – Global Online Survey Q3 2011
37
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
And Healthy products continue to perform ahead of their category in
many cases.
38
Source: Total Scantrack incl Discounters to 17/06/12 Value MAT % Chg
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Categories showing growth
Off-Trade – Fuelled by the switch to the Big Night In
Super Premium brand extensions – Everyone deserves
a treat
Healthy Option brand extensions – driven by the
overweight perceptions
39
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
6
Winning
Brands in the
Recession
40
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Some brands have successfully gained share in tough times – New
Product Development, promotions, and media investments
are the drivers.
BEN & JERRYS TAKE
HOME ICE CREAM
+3.0%
DOVE IN DEODRANT
+2.7%
PERSIL IN LAUNDRY
DETERGENT +3.9%
MC CAIN IN FROZEN
CHIPS +2.5%
KNORR IN STOCK
CUBES +2.8%
BIRDSEYE IN FROZ
FISH+3.2%
KENCO IN SOLUBLE
COFFEE + 2.2%
ORAL B IN
TOOTHPASTE +7.0%
41
VALUE share points gained MAT to May 2012, Scantrack
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Investment in Irish media part of strategy – TV strong player
Ben & Jerry’s Ice Cream
TV – 82.0%
(Ads15+ - 86.2% 3+ Reach)
Cinema/Press – 18%
McCain
BIRDSEYE
(Crispy/Oven/Home Chips)
(Cod Fillets/Fish Fillets/
TV – 59.5%
Fish Fingers /Simply Bake)
TV – 83.4%
Outdoor/Radio/Press – 40.5%
Outdoor/Press – 16.6%
Dove Deodorant
Knorr
TV – 74.1%
(Wmn 15+ - 91.2% 3+ reach)
(Stock Cubes & Stock Pot)
Press – 25.9%
TV – 100%
KENCO
(coffee/refill/Millicano/
Smooth roast)
TV – 84.6%
Radio/Press – 15.4%
PERSIL
ORAL B
(Persil/with Comfort/2 in 1/Small &
Mighty)
(Pro Expert Toothpaste)
TV – 51%
Press/Radio/Outdoor – 49%
TV – 68.7%
Press – 31.3%
42
Source: Nielsen Ad Dynamix (May 11-Apr 12)/Nielsen/TAM Ireland – Mon-Sun All Day, Consolidated May 11-Apr 12,
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
7
Viewing Trends
43
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Average daily viewing time
for 2011 per individual
Q1 2012 viewing @3hr33min day remains
dominated by live TV.
Ireland
3hr 25min
USA
4hr 53min
Europe
3hr 48 min
INCREASE OF 20MINS IN 10 YEARS
WORLDWIDE
Based on Consolidated viewing
IRE Avg daily
viewing time
3hr 33min
92% of content is watched live
97% of content is viewed on
Inds 4+
2hr 27min
Child 4-14
same day as live
3hr 57min
99% of content has been
watched by day
Wmn 15+
3
Adults preferred
viewing day is
Sunday,
Children prefer
Saturday
Source: Nielsen /TAM (Ireland) Inds Mon-Sun All Day, Jan-Mar 2012
Eurodata TV - One TV Year In the World report
44
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
In 2011, subscribing channels broadcast
351,659 programmes
To a potential audience of
4,086,000 individuals 4+
4,293,773 spots
for 4,580 brands
Reaching
99.3% of individuals 4+
2012 Subscribing channels – RTE1, RTE2, TV3, 3e, TG4, UTV, Setanta, Ch4, E4, E4+1, MTV, Nick, Nick Jr, Com Cent, Com Cent +1, Comedy Central Ex,
Discovery, E!, Sky One, Sky News, Sky Sp 1, Sky Sp 2, Sky Sp News, Sky Living, Sky Living +1, Sky Atlantic
45
Nielsen/TAM Ireland – Mon-Sun All Day, 01/01/2011-31/12/2011, Consolidated
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Average daily live reach of subscribing channels remains strong
80.0%
75.5%
70.0%
68.7%
67.4%
66.1%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Adults 15+
Hskprs
2009
2010
Men 15+
2011
2012 (to 31 May)
Women 15+
46
Nielsen/TAM Ireland – Mon-Sun All Day, Live 01/01/2009 to 31/05/2012 1+ min
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
8
Advertising
Trends
47
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Irish consumers place higher trust in advertising such as TV
and press ads than the EU average.
89
Consumer opinions posted online
64
Branded Websites
44
Editorial content such as newspaper articles
47
Emails I signed up for
39
Brand sponsorships
31
Ads on TV
29
44
Ads in magazines
28
43
Billboards and other outdoor advertising
29
41
Ads in newspapers
29
45
Ads on radio
26
45
Ads before movies
25
40
TV Program product placements
23
31
Ads served in search engine results
30
30
Online video ads
22
24
Ads on social networks
22
24
Online banner ads
19
18
Display ads (Video or banner) on mobile devices
(smartphones, tablet devices - i.e., ipad)
18
22
Text (SMS) ads on mobile phones
17
22
EU AVERAGE
Recommendations from people I know
96
65
56
66
57
42
IRELAND AVERAGE
Q. To what extent do you trust the following forms of advertising/recommendation?
Percentage of respondents answering "trust completely" or "trust somewhat")
Source: Nielsen Global Trust in Advertising Online Survey 2011
48
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Irish consumers are still highly influenced by TV and Press ads
when making purchase decisions in FMCG.
Q. Which of the below media influence you when making purchase decisions for the
following types of products? Ireland
FMCG
H&B
CLOTHES
HOME
ELECTRONICS
INSURANCE
CAR
ENTERTAINMENT
MEDIA INFLUENCES
TV COMMERCIAL
49% 44% 34% 47% 35% 39%
27%
37% 34%
37%
37%
INTERNET OR ONLINE REVIEWS
25%
29%
26%
48% 40% 38% 36%
DOES NOT APPLY
21%
21
%
27%
RADIO COMMERCIAL
20
%
15
%
14
%
12
%
15
%
NEWSPAPER/MAGAZINE AD
OUTDOOR BILLBOARD
9%
28%
31% 37%
22%
23%
22%
15
%
19
%
13%
12%
10%
13%
21
%
15
%
12%
WEBSITE BANNER AD
7%
8%
11%
10%
12%
9%
9%
ONLINE VIDEO AD
6%
7%
7%
11%
7%
8%
7%
MOBILE AD
3%
3%
2%
4%
3%
Source: Nielsen Global Trust in Advertising Online Survey 2011
2%
4%
49
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
In conclusion…
• Price promotions are important but brands growing share are
those investing in advertising and in particular TV
• Brand equity has big value
• Retailers growing in share are investing in compelling marketing
for their pricing and private label ranges
• Brand owners must continue to brand build – need to
differentiate from private label to succeed
• Live TV viewing still dominates
• TV is a trusted source and key influencer of consumers
50
Copyright © 2012 The Nielsen Company. Confidential and proprietary.
Thank you
About the Nielsen Global Consumer Survey
• The Nielsen Global Survey reaches over 28,000 Internet users around the world every three
months – representing a global online population of close to one billion consumers. The survey
was established in 2005 and is used to gauge consumer sentiment in the economy, follow
consumers spending intentions and monitor changing habits. The survey currently spans 56
countries across 15 time zones. The Nielsen survey is the largest of its kind to reveal global
insights on emerging trends in the consumer packaged goods and media industries. The
findings are used by international FMCG companies, retailers and media news outlets to keep
a pulse on consumer’s attitudes and behaviors as it relates to the ever-changing retail, media
and technology landscape. Each quarter, Nielsen reports Consumer Confidence Index results.
Twice annually, topical questions on consumers’ watch and buy habits are included.
• The Quarter 2 Survey was fielded from May 4 - May 21, 2012
• Irish respondents 500
About the Nielsen European Growth Reporter
• Compares overall market dynamics (value and unit growth) in the Fast Moving Consumer Goods sector across
Europe.
• Is based on the sales tracking Nielsen performs in every European market.
• Covers sales in grocery, hypermarket, supermarket, discount and convenience channels
• Is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of
these countries and channels
52
Copyright © 2012 The Nielsen Company. Confidential and proprietary.