Market trends and
opportunities for growth
Chilealimentos: Processed Fruit
Jonathan Banks
Business Insight Director
ACNielsen
28 September 2005
© 2005 ACNielsen
1
Market trends and
opportunities for growth
>UK shoppers and consumers
>Where they shop
>Attitudes to health and diet
>Implications for fruit
© 2005 ACNielsen
2
Demographics: the ageing population
>Average UK life expectancy is 78
>Andorra 83, Chile 77, Argentina 76, Brazil 72, Botswana 31
Population of over 65s (millions)
830
global
UK
420
230
7
9
1975
2000
Source: UN estimates
13
2025
© 2005 ACNielsen
3
Food: highest share of expenditure till 1998
15
18
Motoring & Travel
Personal goods and services
Household Goods & Services
16
17
4
13
Clothing and footwear
14
6
2
4
Tobacco
Alcoholic drink
4
5
1
4
18
16
Food
5
3
17
17
1992
2003/04
Fuel and power
Housing
Crown Copyright
Source: ONS Annual Abstract of Statistics 2005
% of household expenditure
Leisure Goods & Services
© 2005 ACNielsen
4
What is your biggest concern over the next 6 months?
25
20
• After London bombings Terrorism will stay front of mind
• Health and Job Security top the list
41
22
21
19
1919
15
13
14
13
10
11
14
12
11
10
9
7
5
7
6
1
8
7
5
4
2 2 0
2
e
N
on
ic
al
st
W
ar
ty
ab
ili
rr
or
is
m
Te
y
ec
Po
lit
e
Th
er
co
nc
on
o
m
er
n
e
C
rim
O
th
Jo
b
se
H
ea
cu
rit
y
lth
0
UK
Source: ACNielsen Consumer Confidence survey May 2005
Europe
LatAm
© 2005 ACNielsen
5
The UK economy: In good shape – for now
COUNTRY
CHILE
ARGENTINA
BRAZIL
UK
FRANCE
CHINA
USA




GDP $
GDP % UNEMPLOYMENT PUBLIC DEBT
(TRILLION) GROWTH
%
% of GDP
0.2
0.5
1.5
1.6
1.6
6.4
11.8
6
8
5
2
1
9
4
9
15
12
5
10
10
6
13
118
52
51
69
30
65
Personal debt > £1 trillion
 £7,500 per household excluding mortgage
Pension under-provision in public and private schemes
Low savings ratio
It will all end in tears!
Source: CIA
© 2005 ACNielsen
6
Market trends and
opportunities for growth
>UK shoppers and consumers
>Where they shop
>Attitudes to health and diet
>Implications for fruit
© 2005 ACNielsen
7
35%
Top 4 = 79% of total grocery
Tesco
30%
25%
20%
ASDA
Sainsburys
15%
Morrisons/Safeway
Se
pte
Ju
ne
-01
mb
erDe
01
ce
mb
erFe
01
br
ua
ry02
Ma
y-0
2
Au
gu
stNo
02
ve
mb
er02
Ja
nu
ary
-03
Ap
ril03
Ju
ly03
Oc
tob
erDe
03
ce
mb
er03
Ma
rch
-04
Ju
ne
Se
-04
pte
mb
erNo
04
ve
mb
erFe
04
br
ua
ry05
Ma
y-0
5
Au
gu
st05
10%
Source: ACNielsen Homescan Total Till 12 week ending periods to 3 September 2005
© 2005 ACNielsen
8
1330 out of town stores = ½ the market
Total FMCG Retailing
£105bn
Out of Town
£53bn
Megastores
£29bn
>40kfs
High Street
£28bn
Superstores
£24bn
>25kfs
Large Stores
£17bn
>10kfs
Convenience
£24bn
Small Stores
£11bn
>3kfs
Source: ACNielsen Scantrack TBR Year to 3 September 2005
© 2005 ACNielsen
9
Megastore growth is not just from ‘new non-food’
Total FMCG Retailing
£105bn
+2%
Out of Town
£53bn
+5%
Megastores
£29bn
+8%
>40kfs
Superstores
£24bn
+2%
>25kfs
High Street
£28bn
-1%
Large Stores
£17bn
=
>10kfs
Convenience
£24bn
=
Small Stores
£11bn
-3%
>3kfs
© 2005 ACNielsen
10
Convenience stores drive consolidation in the UK
>
2000:
>
>
>
>
>
>
2001:
>
>
>
>
>
>
Balfour / Clements
Anglo / Save
Compass / Whistlestop
United Co-op / Willis
Compass / Stopgap
2002:
>
>
>
>
>
>
T&S Stores / Day & Nite
Anglo / Repsol
Nomura / First Quench
CRS / CWS
Iceland / Booker
Co-op / Adrian Williams
Co-op / GT Smith
Musgrave / Budgens
Co-op / Alldays
Tesco / T&S Stores
2003:
> Co-op / Balfour
> Rippleglen / Supercigs
> 2004:
>
>
>
>
>
>
>
>
>
Sainsbury's / Bells Stores, Jacksons & Beaumont
Tesco / Adminstore (Cullens & Europa)
Somerfield / Aberness; Osprey
Co-op / Conveco
United Co-Op / Neighbours
Scotmid / SCS & MNN
Musgrave Group / Londis
TM Retail / Dillons
Morrisons / Safeway
> 2005 & What Next?
> Iceland / Bauger
> Somerfield /Safeway (115)
> Waitrose / Safeway (20)
> Tesco & Asda buy 7 Big W out of town
> Tesco / Morrisons: 30 pfs
> Somerfield: Bauger/ASDA/United Co-op?
> Morrisons: –more Safeway divestments?
> FWW/Boots/JS?
© 2005 ACNielsen
11
30
Hard Discounter evolution: 1998 to 2003
HD market share
25
GB
1998
2003
20
population/store HD share
115,000
2.5%
83,000
3.6%
15
10
5
0
0
20000
40000
60000
80000
100000
120000
140000
160000
Number of inhabitants per HD store
Source: ACNielsen
© 2005 ACNielsen
12
Development of Grocery Internet Shopping

Consumer acceptance continues to grow
steadily across all measures
2002
2003
2004
66.2
68.1 68.5
66.8
66.0 66.2
14.5 15.2
16.4
6.1 6.6 7.3
6.9
4.9 6.3
0.9 1.2 1.5
Penetration % Share of £ Exp
Freq of
Purchase
% Repeat
Buyers
Loyalty %
Source: ACNielsen Homescan 52 w/e 25th Dec 04, 27th Dec 03, 28th Dec 02
Avg Spend Per
Visit
© 2005 ACNielsen
13
Importance of impulse purchases:
We have a higher propensity than other European shoppers to
make impulse purchases. Promotions capitalise on this.
7
19
30
14
8
6
4
11
22
20
22
35
59
56
55
I plan but
sometimes buy
more
55
26
UK
9
10
Netherlands
France
I plan and
always buy
more
59
42
5
I never plan
14
14
Germany
Spain
Source : ACNielsen - Shopper Trends (Europe). 2004 - % agree
I plan & never
buy more
Italy
© 2005 ACNielsen
14
Summary of UK shoppers and shopping
> Ageing population
> Food now only 4th largest spend item
> Concern about health and job security
> Economy in good shape – for now
> Top 4 = 79%
> 1330 out of town stores = ½ the market
© 2005 ACNielsen
15
Market trends and
opportunities for growth
>UK shoppers and consumers
>Where they shop
>Attitudes to health and diet
>Implications for fruit
© 2005 ACNielsen
16
Food and beverage scares
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
Sept 04
Feb 04
Jan 04
Oct 03
Aug 03
May 03
May 02
Mar 02
Jun 01
Dec 99
Jun 99
Nov 96
Feb 90
Mar 89
Dec 85
86 to 96
1996
1977
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
farmed Salmon causes cancer
Red Bull banned in France
Bird flu will kill you
coffee link to miscarriages
Atkins diet can be deadly
Beef waste in chicken
Swordfish mercury poisoning
Prawns give you cancer
Soy sauce carcinogenic
Sunny Delight turns child orange
Coke banned in Belgium
E.coli epidemic
Perrier with benzene
Listeria
Salmonella
BSE
Aspartame link to brain cancer
Saccharin causes cancer in lab rats
Mar 04: Coke’s water bomb
May 04: Co-op bans musks and phthalates
Jul 04: 3 wholemeal bread slices = 1 Mars bar
>Oct 04 – Nitrofuran in Organic poultry
>Now: Sudan 1 and Para Red
© 2005 ACNielsen
17
Para 7: All but two of the residues found…were
below the government's official maximum
residue level, and…they present no risk to
human health. The food standards agency
agrees that residues below the maximum
residue level are safe.
© 2005 ACNielsen
18
Attitudes towards health:
People want to eat more healthily
69.7 72.1 74.1
“It’s important for me
to eat healthily”
2000 2004 2005
61.2 64.0 59.0
“I often don’t eat as healthily
as I think I should”
2000 2004 2005
59.7
59.6
2000
2004
“I am concerned about the
safety of food today”
Source: ACNielsen Homescan Survey February 2000, February 2004 and February 2005
© 2005 ACNielsen
19
Move away from highly processed
products towards “naturally healthy”
2004
2005
59%
51%
53%
54%
23%
I avoid products that
contain a high proportion
of artificial ingredients or
preservatives
I prefer foods that are
natural
24%
It's worth paying extra for
organic food
Source: ACNielsen Homescan Survey, February 2004 and February 2005
© 2005 ACNielsen
20
Life vs Death marketing:
Younger people are concerned with image, vitality and exercise potential.
Older people worry about living healthily and avoiding disease.
“Which of the following do you think is the main benefit of a healthy diet?”
25-34 yrs
35-44 yrs
45-64 yrs
65+ yrs
Vitality – feeling energised and
good about yourself
146
126
90
50
Not being overweight/obese
103
100
97
89
Healthy heart and circulation
75
99
110
113
Longevity, maintaining good
health in old age
85
79
111
137
Avoiding cancer
49
98
96
160
Healthy bones and joints
65
83
110
145
167
167
50
33
Avoiding colds and flu
93
80
80
153
Avoiding diabetes
64
91
57
71
114
94
164
89
Indexed on All Households
Being better at sport and exercise
None of these
SOURCE : ACNielsen Homescan Survey November 2003
© 2005 ACNielsen
21
US trends in Healthy Food Labelling
>This year’s npd gains less consumer traction
>Some health claims removed
>Greater emphasis on healthier choices (inc Organic)
>and healthy, balanced meals and diet
6
-6%
-4%
4
-7%
-8%
+1% -5%
+1%
2
+7%
-17% -3% -8%
G
ra
i
y
So
os
eF
re
e
-C
ar
b
Lo
w
ni
c
O
rg
a
W
ho
l
e-
C
al
La
ct
m
n/
B
Pr
ra
n/
G
er
m
nc
e
es
e
ce
ci
u
rP
re
se
n
re
e
te
ne
Sw
ee
iu
m
Fa
t-F
ce
Pr
es
en
C
la
or
ie
Sa
lt/
So
d
C
al
Lo
w
-F
at
im
0
Source: ACNielsen LabelTrends, Total U.S. Food-Drug-Mass Excluding Wal-Mart: 12 wks to 18/6/05
© 2005 ACNielsen
22
Wellness food + beverage propositions
grow over time
Proportion of Concepts with Wellness Benefits in BASES Consumer Research
50%
45%
2007:
Fibre
40%
35%
30%
25%
Carbs
20%
Fat
15%
Sodium
10%
5%
Calories
Cholesterol
Added Vitamins/
Neutraceuticals
Vits
Fat
Calories
0%
Source: ACNielsen BASES
© 2005 ACNielsen
23
Market trends and
opportunities for growth
>UK shoppers and consumers
>Where they shop
>Attitudes to health and diet
>Implications for fruit
© 2005 ACNielsen
24
The consumer’s dilemma
% agree
79
71
“I’m trying to eat healthier
foods than I used to”
“It’s nice to have fattening
treats once in a while”
“I often feel guilty about
eating the foods I like”
35
Source: ACNielsen Homescan GB 2004
© 2005 ACNielsen
25
© 2005 ACNielsen
26
Globally, Fruit and Veg +4% from ’03 to ’04
Sauces
+3%
+4%
Cooking Basics
2003
+3%
Desserts, Cakes & Pastries
Non-Sweet Carbs
+2%
Ready-to-Eat Meals
+3%
+4%
Fruit & Vegetables
+6%
Meat, Fish & Eggs
Dairy
+4%
Confectionery & Snacks
+4%
+5%
Non-Alcoholic Beverages
Alcoholic Beverages
+4%
+4%
Baby Food
€ (mill)
2004
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Global Growth by Product Area
SOURCE : ACNielsen Global Services: “What’s Hot around the Globe 2004”
© 2005 ACNielsen
27
US fruit sales
>Fresh 30% bigger than the rest combined
>And showing growth whilst canned stagnates
>Refrigerated and frozen grow
.
4,000
2003
2004
2005
3,500
2,500
2,000
1,500
1,000
500
IG
ER
N
O
ZE
R
EF
R
FR
TE
D
A
R
D
C
A
N
N
ES
H
ED
IE
D
0
FR
US$millions
3,000
Source: ACNielsen years ending August
© 2005 ACNielsen
28
Germany fruit sales
>Canned fruit volume is slightly up
>Price compression and mix lowering total spend
>Fresh fruit = €4billion and growing
200
2003
180
2004
2005
.
140
€ millions
160
120
100
80
60
40
20
0
Canned
Dried
Source: ACNielsen years ending August
Frozen
© 2005 ACNielsen
30
UK fruit and veg consumption
>Awareness of the ‘5 a day’ campaign is high
But there is a 500g shortfall v 2800g target, with vegetable consumption level
3000
2000
Total fruit
1500
1000
500
Total vegetables
(exc. potatoes)
0
19
7
19 4
7
19 5
7
19 6
7
19 7
7
19 8
7
19 9
8
19 0
8
19 1
8
19 2
8
19 3
8
19 4
8
19 5
8
19 6
8
19 7
8
19 8
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
9
20 9
20 0
01 0
20 -0
0 2
20 2-0
03 3
-0
4
g per person per week
2500
Sources: Adjusted National Food Survey 1975-2000; Expenditure & Food Survey 2001-3
© 2005 ACNielsen
31
UK vegetable consumption
>No growth despite healthy eating campaigns
800
700
All processed
500
Other fresh
400
300
200
Fresh green
100
0
19
7
19 4
7
19 5
7
19 6
7
19 7
7
19 8
7
19 9
8
19 0
8
19 1
8
19 2
8
19 3
8
19 4
8
19 5
8
19 6
8
19 7
8
19 8
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
99
2
20 00
0 0
20 1-0
0 2
20 2-0
03 3
-0
4
g per person per week
600
Potatoes have also declined: from 1318 to 600
Sources: Adjusted National Food Survey 1975-2000; Expenditure & Food Survey 2001-3
© 2005 ACNielsen
32
UK fruit consumption
>Slow growth
1200
1000
600
Fresh fruit
400
200
Processed fruit
0
19
7
19 4
7
19 5
7
19 6
7
19 7
7
19 8
7
19 9
8
19 0
8
19 1
8
19 2
8
19 3
8
19 4
8
19 5
8
19 6
8
19 7
8
19 8
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
9
19 8
99
2
20 00
0 0
20 1-0
0 2
20 2-0
03 3
-0
4
g per person per week
800
>Growth of processed mainly driven by pure fruit juices
Sources: Adjusted National Food Survey 1975-2000; Expenditure & Food Survey 2001-3
© 2005 ACNielsen
33
UK fruit consumption
>Tinned: sharp declines
>Dried: slower decline
>Frozen: not started
80
Tinned peaches,
pears & pineapples
60
All other tinned or
bottled fruit
50
Dried fruit
40
Frozen fruit
30
20
Jams, fruit curds +
marmalade
10
-0
2
Nuts, Edible Seeds
And Peanut Butter
20
01
19
98
19
95
19
92
19
89
19
86
19
83
19
80
19
77
0
19
74
g per person per week
70
Sources: Adjusted National Food Survey 1975-2000; Expenditure & Food Survey 2001-3
© 2005 ACNielsen
34
Fruit juice/juice drinks…
>Chilled double digit growth; Ambient static
1600
Chilled
1600
Ambient
1400
386
526
460
1200
1000
800
600
400
537
593
793
834
840
2 years ago
Year ago
Latest year
472
1000
949
968
961
£ millions
Millions litres
1200
1400
800
600
400
200
200
0
0
2 years ago
Year ago
Latest year
£/litre
2 years ago
Year ago
Latest year
Ambient
0.84
0.86
0.87
Source: ACNielsen Great Britain to 14 May 2005
Chilled
1.22
1.17
1.13
premium
46%
35%
29%
© 2005 ACNielsen
35
Chilled fruit juice…
>Growth in both key segments
NFC
FC
450
400
400
350
350
147
300
125
250
200
107
150
100
157
244
206
184
200
150
100
50
0
0
Year ago
Latest year
£/litre
2 years ago
Year ago
Latest year
210
250
50
2 years ago
236
300
£ millions
Millions litres
450
FC
0.85
0.81
0.77
166
133
2 years ago
NFC
1.72
1.68
1.61
Year ago
187
Latest year
Premium
103%
108%
109%
Source: ACNielsen Great Britain to 14 May 2005; smaller ‘drinks’ segment not shown
© 2005 ACNielsen
36
Fruit Juice/Juice Drink Flavour preferences
300
+12%
250
150
100
50
+30%
+46%
-7%
+19%
+18%
+19%
al
bl
en
ds
C
ra
nb
er
ry
G
ra
pe
fr
ui
O
t
th
er
fla
vo
ur
s
Tr
o
pi
c
bl
en
ds
A
pp
le
A
pp
le
ra
ng
e
0
O
Millions litres
200
Source: ACNielsen Great Britain to 14 May 2005
© 2005 ACNielsen
37
European Examples:
Still Fruit Drinks with Added Value
Source: WILD Group
© 2005 ACNielsen
38
US: Functional soft drinks
•diverse health claims
• a mass of
health claims
© 2005 ACNielsen
39
© 2005 ACNielsen
40
Packaging:
>Microwaveable cans
>Peel-seam cans
>New print systems
>Self-chilling cans
>Self-heating cans
>Pouches
© 2005 ACNielsen
41
New product launches reflect current consumer
drivers – many combining all three!
Convenience
and Snacking
Health and
Well-being
340
691
235
304
1,201
275
1,165
Pleasure and
Indulgence
Source: Leatherhead Food International 2004
© 2005 ACNielsen
42
Beverages – some key categories
>Milk c. 50p/litre
+16%
.
+63%
250
£3.48
£2.88
Category value £m
200
+11%
£1.96
150
£1.57
-2%
100
+55%
£1.36
50
£1.29
£0.76
-19%
+23%
0
FC
Flavoured
Milk
Dairy
substitutes
NFC
Yogurt
drinks
Source: ACNielsen September 2005
Probiotic
Smoothies
© 2005 ACNielsen
43
© 2005 ACNielsen
44
Lycopenes and Anthocyanins…
Inhibit ‘bad’ cholesterol (LDLc)
Encourage ‘good’ cholesterol (HDLc)
Help repair damaged blood vessels
Vitamin C
Helps regulate blood clotting
Helps regulate blood pressure
Source: David Berryman
© 2005 ACNielsen
45
Antioxidants versus Malfunction
Malfunction
Cancer
Heart &
circulation
Prevention source
Active ingredient
Citrus fruits
Berry fruits
Raspberry
Apple
Flavonoids + Vitamin C
Anthocyanins
Ellagic Acid
Flavonols
Citrus
Tomato
Water Melon
Berry fruits
Apple
Vitamin C
Lycopene
Lycopene
Anthocyanins
Flavonols
Source: David Berryman
© 2005 ACNielsen
46
Consumer confusion
> If it’s cheap it must be rubbish
> Salad options are less fattening
> Organic is better for me
> GM is bad for me
> Banning ‘junk food’ ads to kids will reduce obesity
> I’m too busy to eat/exercise properly
> Vegetarian options are healthier
> I need to eat more fruit and veg, but:
> an apple contains 4 tsp of sugar
> a third of all produce contains pesticide residue
> fruit looks unappetising
© 2005 ACNielsen
47
Summary of the UK
> Food scares are the norm
> Want to eat more healthily
> Low-carb fad has faded
> Fruit consumption growing – but behind target
> Processed fruit sub-categories declining –
except juice
> NPD: convenience, health, indulgence
> We’re confused consumers!
© 2005 ACNielsen
48
Jason Clay - WWF:
>Live like you’ll die tomorrow
>Farm like you’ll live forever
© 2005 ACNielsen
49
Thank you!
>Questions?
>jonathan.banks@acnielsen.co.uk
>Good luck!
© 2005 ACNielsen
50
© 2005 ACNielsen
51