WHAT GLOBAL TRENDS
MEAN FOR THE FUTURE OF
THE PROTEIN INDUSTRY
Bruce Axtman
Nielsen Perishables Group
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
AGENDA
•
•
•
•
Consumer and economic trends
U.S. demographic shifts
Evolving shopper behaviors
Promoting for maximum impact with
consumers
• Fresh is in
• Winning in today’s retail environment
2
CONSUMER AND ECONOMIC TRENDS
Global Consumer Confidence Index
102
94
90 90
85
84
92
94
89 88 89
91 92
77
2H
'0
6
2H
'0
7
2H
'0
Q1 8
20
0
Q3 9
20
0
Q3 9
20
1
Q4 0
20
1
Q1 0
20
1
Q2 1
20
1
Q3 1
20
1
Q4 1
20
1
Q1 1
20
1
Q2 2
20
1
Q3 2
20
12
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
HOVERING NEAR THREE YEAR AVERAGES
Source: Nielsen Global Omnibus Consumer Confidence Survey 3Q2012
4
SECOND WAVE OF “RECOVERY” UNDERWAY
Nielsen U.S. Consumer Confidence Index
92 92
85
83
93
83 83
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
80
1Q08
2005 - 2007
1Q09
1Q10
2008 - 2Q 2009
Pre-Recession
Source: Nielsen Global Omnibus Consumer Confidence Survey 1Q13
1Q11
1Q12
1Q13
2010 - 1Q 2013
Recession
Post-recession
5
U.S. GROWTH SLOWED
Actual and Projected U.S. GDP Growth (2006-2017)
Forecast for 2013 Slow Growth
Actual
Forecast
3.4%
3.4%
2.7%
2.4%
1.9%
2.4%
2.2%
1.8%
3.3%
1.5%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
v
-0.3%
2006
2007
2008
2010
2011
2012
2013
2014
2015
2016
2017
2009
Source: IMF World Economic Outlook, Oct 2012; 2012-2014 from Wells Fargo forecasts as of Dec 21 2012; TCG Analysis
6
WHAT WE DISCUSS TODAY PREPARES US FOR
TOMORROW
Actual and Projected U.S. GDP Growth (2006-2017)
Forecast for 2013 Slow Growth
Actual
Forecast
2.7%
2.4%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
1.9%
3.4%
2015
2016
3.3%
2.4%
2.2%
1.8%
3.4%
1.5%
-0.3%
2006
2007
2008
2010
2011
2012
2013
2014
2017
2009
Source: IMF World Economic Outlook, Oct 2012; 2012-2014 from Wells Fargo forecasts as of Dec 21 2012; TCG Analysis
7
SEEMINGLY A LOT HAS CHANGED IN TWO YEARS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Spring 2011
Source: Nielsen
Spring 2013
8
ECONOMIC CONCERNS REMAIN IN THE
FOREFRONT OF CONSUMER MINDS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
What are your biggest concerns over the next six months:
CONCERNS
Q1 2013
ECONOMY
28%
27%
JOBS
11%
13%
DEBT
10%
8%
FOOD PRICES
5%
7%
HEALTH
7%
7%
FUEL PRICES
11%
5%
UTILITY PRICES
5%
6%
WORK LIFE BALANCE
3%
5%
Source: Nielsen Global Omnibus Consumer Confidence Survey 1Q13
Q4 2012
CHANGE
SAME
9
IS THIS THE NEW NORMAL?
DECLINING
HOUSEHOLD INCOMES
2007
$53,768
2008
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
2009
2010
2011
CONSUMERS
LIVING PAYCHECK TO PAYCHECK
$52,546
$52,195
68%
$50,830
$50,054
Source: U.S. Census Bureau; Reuters Sept 2012 survey
The New York Times & USA TODAY/Sentier Research
10
U.S. DEMOGRAPHIC SHIFTS
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Copyright ©2013
“OLDEST OLD” CROWD GROWING RAPIDLY
Source: USA TODAY (Feb. 4, 2013)
12
OLDER MORE TRIPS; YOUNGER BIGGER BASKETS
Total Retail Channels
Shopping Trips Per Household
Millennials
Gen X
Boomers
Greatest Gen
113
135
157
170
Basket Ring $ Per Trip
Millennials
Gen X
Boomers
Greatest Gen
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Basket Ring $ Per Household
Millennials
Gen X
Boomers
Greatest Gen
$6,060
$7,194
$7,223
$6,156
$54
$53
$46
$36
% Dollars on Deal*
Millennials
Gen X
Boomers
Greatest Gen
31%
27%
25%
26%
Millennials more deal prone
Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/29/2012, excludes gas only or Rx only trips; *UPC-coded products
13
ETHNIC WILL BE MAJORITY BY 2050
Distribution of the U.S. Population
Hispanic
70%
65%
Black
60%
Asian
White Non-Hispanic
60%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
4%
13%
14%
8%
9%
6%
7%
14%
14%
27%
30%
2040
2050
13%
16%
19%
23%
2000
2010
2020
2030
Source: U.S. Census
46%
54%
35%
5%
51%
15%
15%
14
HISPANIC BUYING POWER
Hispanic consumer market in the U.S. is larger than the
entire economies of all but 13 countries in the world
UGA Selig Center Multicultural Economy study, May 1, 2012
$1.7 trillion
$1.5 trillion
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$1.2 trillion
$1.0 trillion
$488 billion
$210 billion
1990
2000
2010
Source: Selig Center for Economic Growth, University of Georgia, Athens
2012
2015
2017
15
WHO ARE U.S. SEAFOOD CONSUMERS?
Highest indexing consumer characteristics
78%
affluent urban and suburban areas and
downscale urban areas
live in
Young Transitionals
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Copyright ©2013
No children, 35 or younger
White
consumers make up 56% of seafood sales in top stores, but
African American, Hispanic and Asian consumers index well
$75K+ HH Income
Source: Nielsen Spectra
College graduates
16
SHOPPER BEHAVIORS
ARE EVOLVING
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UNDERSTAND EVOLVING SHOPPERS
Eating but not cooking
Engaged in food and cooking
18
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EATING BUT NOT COOKING
19
STRONGEST FRESH GROWTH IN CONVENIENCE
NOT JUST FOR FAMILIES
DOLLAR GROWTH
8%
VOLUME GROWTH
5%
4%
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Copyright ©2013
1%
CONVENIENCE
STAPLES
19%
62%
CONTRIBUTION TO FRESH DOLLAR SALES
Source: Nielsen Perishables Group FreshFacts® Total U.S. 52 weeks ending 9/29/2012 vs. Year Ago; Products in each group are not mutually exclusive
FreshFacts Powered by Spire/Consumer Essence Segmentation
20
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CONVENIENCE PRODUCT INNOVATIONS
FOR DIFFERENT DAY PARTS
Lunch and Dinner
Source: MultiAd Kwikee & company websites
Breakfast
Smaller Meal Occasion:
Snacking & Smaller HH
21
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
PACKAGING INNOVATIONS MEETING
CONVENIENCE NEEDS
Source: MultiAd Kwikee & company websites
22
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ENGAGED WITH FOOD AND COOKING
23
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
ENGAGED WITH FOOD
Food & cooking
websites
67 to 91
million unique
monthly visitors
Source: Nielsen BookScan; Nielsen NetView, Home & Work; Nielsen Online Views Survey – March & April 2012 (n= 50,643)
Spend more
than average
on both fresh
and
center store
24
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
CREATIVE
restaurant quality meals at home
increasingly
SOPHISTICATED
and global palates
PASSIONATE
about understanding food
INTRIGUED
by sourcing: production and
processing methods
EDUCATED
on health
Food Technology, January 2012
25
CATEGORIES WITH KEY ATTRIBUTES ARE
DRIVING GROWTH
DOLLAR GROWTH
VOLUME GROWTH
8%
7%
5%
5%
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Copyright ©2013
3%
3%
HEALTHY
PREMIUM
INDULGENT
MULTICULTURAL
GLOBAL
37%
9%
3%
CONTRIBUTION TO FRESH DOLLAR SALES
Source: Nielsen Perishables Group FreshFacts® Total U.S. 52 weeks ending 9/29/2012 vs. Year Ago; Products in each group are not mutually exclusive
26
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
HEALTHY LABEL CLAIMS GROWING
Sales range from $70B for fat claims to $64M for health claims
Label Claims Dollar Sales and Unit Change
$80
$70
Fat presence
Natural +4%
Preservative Presence +3%
Billions
$60
$50
$40
Salt or Sodium
Presence
+.5%
$30
$20
Organic +9%
Protein
Presence
+10%
Hormone
Antibiotic
Free +12%
Iron
Presence
+4%
$10
$0
52 Weeks Ending 11/24/2012
Source: Nielsen Scantrack & Nielsen Label Trends; UPC-coded;
Total U.S. - All Outlets Combined
27
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
ORGANICS GOING STRONG, ESPECIALLY IN MEAT
Natural/ Organic
Dollar Sales % Change vs. Year Ago
Sources: Nielsen Scantrack & Nielsen Label Trends Total U.S. - All Outlets Combined; Photo Sources: Company websites
28
PROMOTING FOR MAXIMUM
IMPACT WITH CONSUMERS
RETAILERS OFFERING FEWER PROMOTIONS,
SHALLOWER DISCOUNTS
Declining promotions playing out in both circular ads and discount strategies
CIRCULAR PRINT
AD COUNT
PROMOTIONAL AVERAGE
RETAIL PRICE
(TOTAL PERISHABLES)
(TOTAL PERISHABLES)
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Copyright ©2013
-0.6%
SALE
+2%
SALE
Source: Market Track Promotional Data (Grocery channel only) 52 weeks ending 9/29/2012 vs. Year Ago; Nielsen Perishables Group FreshFacts® (FCA), 52 weeks ending 10/27/2012 vs. Year Ago
30
PROMOTIONS FLAT OR DOWN ACROSS FRESH
-2.1%
SEAFOOD
Produce
-1.0%
Meat
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
-0.8% Seafood
Deli
Bakery
Bakery
Deli
Seafood
Meat
0.3%
Promotional
volume down
in 8 of 14
seafood
categories
0.5%
Produce
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area; 52-weeks ending 2/23/20123 (vs. year ago)
31
PARADIGMS ARE SHIFTING
Today the predominant promotional strategy in fresh categories involves suppliers
offering cost savings per box in exchange for circular ads, but printed retailer circulars
are shrinking or disappearing altogether
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
TRADITIONAL
ADDITIONAL OUTLETS
Direct to consumer from
retailers or
suppliers/manufacturers
CIRCULAR AD
FSI
SEGMENTATION
DIRECT MAIL
SOCIAL MEDIA
TV
LOYALTY CARD
ONLINE
MOBILE
RADIO
32
FRESH IS IN
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FRESH FOODS DRIVE SALES AND STORE CHOICE
FRESH FOODS
COMPRISE
30%-60% OF TOTAL
GROCERY SPENDING
GLOBALLY
Source: Nielsen Global Survey of Fresh Foods, March 2013
FRESH FOODS:
• Contribute a healthy percentage
of total grocery spending
• Drive strong retailer equity
• Boost high-traffic volume
• Constitute a staple for a
healthy diet
34
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SHOPPERS SPLITTING THEIR FRESH TICKET
Source: Company websites
35
FRESH DEPARTMENT CONTRIBUTION
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
29%
39%
32%
16%
7%
MEAT
PRODUCE
DELI
BAKERY
$70
$54
$52
$52
5%
SEAFOOD
FRESH FOOD
CONTRIBUTION TO
TOTAL STORE SALES
MEAT
Source: Nielsen Perishables Group FreshFacts®;2012
PRODUCE
DELI
BAKERY
$74
SEAFOOD
36
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
FRESH PURCHASES REMAIN STRONG WHILE
NON-FRESH CATEGORIES FIGHT DECLINES
Total U.S.
52 Weeks Ending 2/23/2013
DOLLAR GROWTH
VOLUME GROWTH
6%
7%
6%
5%
4%
3%
4%
3%
0%
MEAT
0%
PRODUCE
DELI
BAKERY
Source: Nielsen Perishables Group FreshFacts® Total U.S. 52 weeks ending 2/23/2013 vs. Year Ago
SEAFOOD
37
FRESH SEAFOOD JOINING MOMENTUM OF FROZEN
Total Seafood Volume Sales Trend by Type
Fresh
Smoked
6%
5% 5% 5%
Frozen
3%
2%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
1%
-1%
2010
2011
2012
-5%
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area; Stable Stores; Nielsen Scantrack, Total U.S. – Food + WMT + Sam’s + Target
38
FRESH SEAFOOD RETAIL PERFORMANCE OVERVIEW
After recession-related decline, fresh seafood is making a comeback
3-year History
YTD through March
9%
7%
6.5%
5%7.0%
5%
2%
1%
0%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
7%
-1%
-1% -1%
-5%
2010
2011
Dollar % Change
2012
-0.5%
Volume % Change
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area; 52-weeks ending 2/23/20123 (vs. year ago)
Average Retail % Change
39
FRESH SEAFOOD DRIVING GROWTH
• Sales growth was positive across seafood varieties
• Fresh seafood driving department dollar and volume growth
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Seafood Department, Total U.S.
GROWTH
DRIVERS:
Crabs
Salmon
Lobster
Tilapia
Sea Bass
8%
7%
6%
3%
4%
2%
2%
1%
-1%
Fresh Seafood
Dollar % Change
Prepared Seafood
Volume % Change
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area; 52-weeks ending 2/23/20123 (vs. year ago)
Other Seafood
Average Retail % Change
40
SALMON
Strong supply bolstered the top-selling fin fish
Salmon Trend Comparisons
Total U.S., 52 Weeks Ending 2/23/13
Salmon purchased by
16%
OF U.S.
23%
13%
HOUSEHOLDS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
(+1 pt from a year ago)
3%
-8%
Salmon
Dollar Growth
Volume Growth
Average Retail Growth
Distribution Points Selling Growth
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area (vs. year ago); Nielsen Perishables Group FreshFacts® Shopper Insights
41
TILAPIA
Tilapia Trend Comparisons
Total U.S., 52 Weeks Ending 3/30/13
Tilapia purchased by
18%
OF U.S.
15%
9%
2%
HOUSEHOLDS
(+1 pt from a year ago)
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
-6%
Tilapia
Dollar Growth
Volume Growth
Average Retail Growth
Distribution Points Selling Growth
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area (vs. year ago); Nielsen Perishables Group FreshFacts® Shopper Insights
42
SHRIMP
Shrimp Trend Comparisons
Total U.S., 52 Weeks Ending 2/23/13
8%
Shrimp supplies
6%
expected to decline
3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
in 2013
2%
Total Shrimp
Dollar Growth
Volume Growth
Average Retail Growth
Distribution Points Selling Growth
Source: Nielsen Perishables Group FreshFacts®, Total U.S. – Fresh Coverage Area (vs. year ago); Nielsen Perishables Group FreshFacts® Shopper Insights
43
CANNED TUNA
Suffering due to price increases
Canned Tuna Trend Comparison
2012
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
13%
-2%
-9%
Dollar Growth
Volume Growth
Source: Total U.S. – Fresh Coverage Area; Stable Stores; Nielsen Scantrack, Total U.S. – Food + WMT + Sam’s + Target
Average Retail Growth
44
WINNING IN TODAY’S
RETAIL ENVIRONMENT
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HOW SEAFOOD CAN WIN IN TODAY’S RETAIL
ENVIRONMENT
•
Opportunities that seafood may adopt that are winning in other
fresh departments.
•
Consumer targeting
•
•
•
•
Different offerings for different consumers
Product development
•
Convenience
•
Premium
•
New varieties/flavors
Strategic promotions
•
Connecting to consumers lifestyles
•
Aggressively leveraging health
Expanded distribution
•
New channels
46
QUESTIONS?
For more information:
Bruce Axtman
Bruce.Axtman@nielsen.com