THE DAIRY CASE:
A FRESH PERSPECTIVE
PRESENTED BY: ROB BABA
JUNE 3RD, 2014.
AGENDA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
 Canadian Consumer Trends
 Refrigerated/Dairy Department Performance
 Closing Thoughts
2
CANADIAN CONSUMER TRENDS
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
TRENDS DEFINING A NEW MARKETPLACE
Slow CPG
Growth
Rising
Prices
Cautious
Consumer
Value Driven
Consumer
Discount
Driven
Evolving
Consumer
4
CPG STILL SPUTTERING FOR GROWTH IN NORTH AMERICA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
United States
Canada
+1.1
-0.1
+1.4
+0.2
Dollars
Units
Dollars
Units
Nielsen: ScanTrack - Total Tracked Sales
52 wks ending March 25, 2014
Nielsen: MarketTrack - Total Tracked Sales
52 wks ending March 8, 2014
5
2014 IS STARTING OFF SLOW
Slow growth, driven only by inflation
$ % Chg
Unit % Chg
5
2
2
2
2
0
0
2011
2012
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
0
Inflation
2009
2010
+5
+0
+2
+2
2
0
2013
+2
2
1
Q1 2014
+1
Source: Nielsen MarketTrack, National All Channels – 52weeks to March 8, 2014 - Total Tracked Sales excluding Fresh Random Weight
6
NOT ALL REGIONS ARE CREATED EQUAL
$ % Chg
52 week Regional CPG Performance
Unit % Chg
4
2
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
1
1
0
1
0
0
0
National Maritimes
1
0
0
Quebec
Ontario
Prairies
Source: Nielsen MarketTrack, National All Channels – 52 weeks Ending March 8, 2014 - Total Tracked Sales excluding Fresh Random Weight
B.C.
7
ALL REGIONS EXPERIENCED AN INCREASE IN CONSUMER
CONFIDENCE, EXCEPT FOR LATAM
Global
North
America
Europe
100
75
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
MEAP
Latin
America
94
96
Asia
Pacific
106
93
MEAP: Middle East South Africa
Source: Nielsen Global Online Consumer Confidence Surveys – Q1 2014
8
U.S. CONFIDENCE INDEX INCREASED 6 PTS TO 100;
CANADA DECLINES 1 PT TO 99
114
111
112
113
Canada
Recession
104
108
106
US
102
101
106
99
96
100
99
96
100
100
98
96
99
97
100
94
98
96
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
93
90
84
83
84
82
80
94
89
83
81
81
77
1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 Q3 10 Q4 10 Q3 11 Q4 11 Q3 12 Q4 12 Q1 13 Q2 13 Q313 Q4 13 Q1 14
Source: Nielsen Global Online Consumer Confidence Surveys – Q1 2014
9
WHERE IS THE CONSUMER TODAY?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Do you think economics conditions are better
today than a year ago?
YES
NO
50%
50%
10
TOP CONCERNS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Rising utility bills are the newest consumer pressure point
1) Economy
2) Debt
3) Jobs
1) Debt
2) Economy
3) Utility Bills
4) Health
5) Food Prices
4) Health
5) Jobs
2011
2014
Source: Nielsen Global Omnibus Consumer Confidence Survey Q1 2014 - Canada
11
WHERE IS THE CONSUMER TODAY?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Based on your feelings towards economic
conditions, will you reduce your spending?
YES
NO
63%
37%
12
WHAT ARE CONSUMERS DOING TO SAVE?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Top saving activities:
• Only buy items when on sale
75%
• Stock up when on promotion
64%
• Use Coupons
63%
• Seek out stores with lower prices
58%
• Buy lower priced store brands
53%
• Shop at Discount Retailers
38%
• Buy lower priced name brands
33%
$$$
Source: Nielsen PanelViews Survey - Canada - May 2013
13
SINCE BEFORE THE RECESSION, % OF RETAIL SALES
SOLD WITH A PRICE CUT HAS INCREASE 10 POINTS
% Dollars Sold on TPR
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
31%
27%
27%
2007
2008
2009
33%
34%
2010
2011
Source: Nielsen MarketTrack, National GB+MM+DG - 12 week periods ending June 29, 2013
35%
37%
2012
2013
14
ALMOST 6 BILLION IN GROCERY SALES HAVE
SHIFTED TO DISCOUNT RETAILERS SINCE 2007
Yr 2007
Yr 2014
MORE TO COME
43.5%
Discount Share
Projections:
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
34.3%
+9 share
points
2014:
44.7%
2017:
50.9%
Discount $ Share
Source: Nielsen MarketTrack – National GB+DG+MM– 52 weeks to March 8, 2014
15
AS A SHARE, VISIBLE MINORITIES ARE SKYROCKETING
1 in 3
% of Population that is a Visible Minority
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
35
30
1 in 5
25
20
15
1 in
20
10
5
0
1921
1931
1941
1951
1961
1971
1981
1991
1996
2001
2006
Source: Statistics Canada 2010 Medium Growth (Reference scenario), 2011 Immigration & Ethno-cultural Diversity in Canada
2011
2017
2031
16
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
OVER A THIRD OF RECENT IMMIGRANTS COME
FROM ASIA
Source: Statistics Canada 2011 Immigration & Ethno-cultural Diversity in Canada
17
GROWTH RATES ARE STAGGERING…
300%
= Forecasted size in 2031
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
~Growth Rate by 2031
250%
Arab
930K
West
Asian
523K
7.3M or 17.5%
of Canadian Population
200%
South
Asian
3.6M
Korean
407K
150%
Other Latam
489K 733K
Filipino
1.0M
Black
1.8M
Chinese
2.7M
100%
SE Asian
449K
50%
Japanese
142K
0%
Source: Statistics Canada, 2010
200,000
400,000
600,000
800,000
1,000,000
Population (2006)
1,200,000
1,400,000
1,600,000
18
OPPORTUNITY WITH SOUTH ASIANS
South Asians
($/buyer index)
2.5X
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
1.9X
1.5X
Categories
• All Other Prepared Foods (e.g.
specialty eastern food)
• Vegetables / Grains Dried
• Cooking Oils & Spray
• Milk
• Yogurt
 Bringing behaviours from home countries
 We see trends about Milk in India also being used in cooking and making own
yogurt and cheeses.
Source: Nielsen Ethnic Action Package (Syndicated)
19
REFRIGERATED/DAIRY DEPARTMENT
PERFORMANCE
Total Tracked Grocery*
Sales (000’s)
$ 45,479,168.3
+1%
REFRIGERATED/DAIRY KEEPING PACE WITH
GROCERY.
Unit % Chg ±0%
National - Total Grocery, 66.5%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Sub-Departments,
Top 10 Ranking on $’s
$ Sales
(000’s)
$ Share
(of Total Tracked Sales)
16.3
$%
Chg
Unit
% Chg
Inflation
+1
+1
0
Refrigerated/Dairy
$ 11,116,153
Prepared Foods
$ 5,446,373
8.0
0
-1
0
Frozen Foods
$ 5,199,835
7.6
-1
-2
+2
Snack
$ 4,571,210
+2
+2
+1
Cold Beverages
$ 3,474,280
-4
-2
-2
Condiments & Sauces
$ 2,820,873
4.1
+1
+1
0
Breads & Rolls
$ 2,712,646
4.0
+1
-1
+2
Confectionery
$ 2,091,530
3.1
+3
+4
-1
Processed Meat
$ 1,994,396
2.9
+6
+3
+3
Hot Beverages
$ 1,496,463
+5
+3
+2
*Total Grocery: Grocery including Bakery, Deli, Produce, Meat and Seafood
Source: Nielsen MarketTrack, National All Channels, 52 Weeks Ending February 08, 2014
6.7
5.1
2.2
21
Total Refrig/Dairy
Tracked Sales (000’s)
ONTARIO ONLY REGION SHOWING NO
GROWTH OR INFLATION.
$ 11,116,153.1
+1%
Regional Importance
35.9
31.4
26.9
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$
Importance
12.2
6.7
5.7
Maritimes
12.6
Quebec
Ontario
Tl West
Man/Sask
Alberta
BC
$ % Chg
+1
+2
0
+3
+3
+5
+1
Inflation
+1
+1
-1
+1
0
+1
+1
Source: Nielsen MarketTrack, All Channels, 52 Weeks Ending February 08, 2014
22
MILK DECLINING 1.5 SHARE POINTS ($60MM) DRIVEN BY BOTH
DEFLATION AND DECREASED CONSUMPTION.
Ontario - Top 10 Categories
Total Refrig/Dairy
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Rank
$ Shr
$ Shr
Pt Chg
100.0
0.0
+1
+1
22.7
-1.5
-6
-2
20.2
+0.4
+2
+1
13.3
+0.5
+4
+2
$ Sales (000’s)
$3,994,937
$
Unit
% Chg % Chg
Top 10 Sales Categories
1
MILK
2
NATURAL CHEESE - EXACT WEIGHT
3
YOGURT PRODUCTS - REFRIGERATED
4
EGGS
$343,284
8.6
+0.2
+3
+3
5
JUICES & DRINKS - REFRIGERATED
$330,910
8.3
-0.1
-1
+2
6
BUTTER & DAIRY SPREADS
4.2
+0.1
+4
+4
7
DIPS - PREPARED
$115,720
2.9
0.0
0
-1
8
MARGARINE
$110,475
2.8
-0.2
-6
-3
9
CREAM
$97,755
2.4
+0.1
+4
+10
CREAM CHEESE - EXACT WEIGHT
$97,650
2.4
0.0
+2
+5
10
$906,394
$807,871
$530,548
$169,447
Source: Nielsen MarketTrack, Ontario All Channels, 52 Weeks Ending February 08, 2014
23
COFFEE TYPE DRINKS SHOWING TOP % GROWTH,
HOWEVER OFF A SMALL BASE.
Ontario - Top 10 $ Growth
Categories
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Rank
Category
$ % Chg
132
$ Volume
Unit % Chg
Inflation
$6,016
+88
+44
$52,227
+39
+4
$28,801
+12
+1
$1,235
+5
+2
1
Coffee Type Drinks
2
Rice & Non Dairy Alternative Beverages
3
Coffee Creamers - Flavoured
4
Coffee Creamers (Excl Flavoured)
5
Yogurt Products - Refrigerated
4
$530,548
+2
+3
6
Butter & Dairy Spreads
4
$169,447
+4
-1
7
Cream
4
$97,755
+10
-7
8
Eggs
3
$343,284
+3
-1
9
Pasta - Refrigerated
3
$33,937
+6
-3
10
Whipping Cream
3
$20,298
+3
0
43
13
8
Source: Nielsen MarketTrack, Ontario All Channels, 52 Weeks Ending February 08, 2014
24
ONTARIO RETAILERS LOWERING REGULAR PRICES WHILE
INCREASING TPR PRICES.
Total Price Trends
Tl Refrig/Dairy
Regular Price
% Chg
TPR Price
% Chg
+1
-1
+2
+3
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
National
Ontario
Regular Price
TPR Price
Top 5 Price Increases ($ % Chg)
Top 5 Price Increases ($ % Chg)
Ontario National
Ontario National
Coffee Type Drinks
+20
+24
Coffee Type Drinks
+10
+3
Cottage Cheese
+6
+6
Pasta - Refrigerated
+10
+2
Processed Loaf
+6
+4
Milk
+9
+10
Eggs
+3
+4
Yogurt Products - Refrigerated
+8
+6
Natural Cheese - Exact Weight
+3
+2
Processed Cheese Slices
+7
+1
Source: Nielsen MarketTrack, National and Ontario GB+D+MM, 52 Weeks Ending February 08, 2014
25
CONSUMERS FINDING VALUE IN REFRIG/DAIRY, TPR SALES UP
ALMOST 5% VERSUS YEAR-AGO.
Ontario - TPR Sales
% of $ Sold on TPR
Total Refrig/Dairy
Year Ago
+4.8
40.7
Top 10 Refrig/Dairy Categories Sold on TPR
60.6
Cream Cheese - Exact Weight
57.7
Processed Cheese Slices
56.5
Juices & Drinks - Refrigerated
50.6
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Processed Cheese Spreads
+4.8
+8.5
+0.1
+3.3
Margarine
47.8
+5.1
Natural Cheese - Exact Weight
47.8
+1.3
Butter & Dairy Spreads
47.0
+2.3
Yogurt Products - Refrigerated
46.7
+5.2
Coffee Creamers - Flavoured
Coffee Type Drinks
Source: Nielsen MarketTrack, Ontario GB+D+MM, 52 Weeks Ending February 08, 2014
45.7
43.6
+1.7
+3.7
26
CLOSING THOUGHTS…
• Current CPG growth is fueled by higher prices, not
consumption.
 For real growth, focus on initiatives that drive increased
consumption since higher prices will have a compounding
affect.
• Consumers will continue to look for value, but good prices and
promotions will not guarantee long term success.
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
 Value is not about Price alone, but a balance between Price &
Benefits & Emotion.
• Increasing ethnic population trends create natural opportunity
to understand and capitalize on.
 Know their home country behaviours, then tailor and talk to
them.
27