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The worlds leading marketing information company

The Power of

Private Label 2005

A Review of Growth

Trends Around the World


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Executive News Report from ACNielsen Global ServicesSeptember 2005

1

THE POWER OF PRIVATE LABEL 2005A Review of Growth Trends Around the World

TABLE OF CONTENTS

Executive Summary 2

Geographic Insights 9

Category Insights 13

Pricing Trends 17

Private Label Consumers 22

Methodology 28

The information contained in this report has been collected from ACNielsenin 38 countries around the world. For questions or to obtain more detailedinformation by country please contact your local ACNielsen Global Servicesrepresentative or contact either of the authors, Clare Nishikawa [email protected] Jane Perrin [email protected].

The information contained in this report is not to be used with sourcesoutside of your company without the express written permission of

ACNielsen Global Services.

Copyright 2005 ACNielsen. All rights reserved. ACNielsen and ACNielsen with globe designare trademarks or registered trademarks of AC Nielsen (US), Inc. Other brand and productnames are trademarks or registered trademarks of their respective companies.


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TOP FIVE PRIVATE LABEL COUNTRIES LOCATED IN EUROPE

Across the 38 countries and 80 categories included in this study Private Label sales accountedfor 17% of the value sales over the 12 months ending the first quarter of 2005. In comparison to

year ago, Private Label sales grew by 5%.

Europe maintained its position as the most developed Private Label region with an aggregatedPrivate Label share in value sales of 23% for the 17 European countries included in the study.As with our 2003 study, the European countries of Switzerland, Germany, Great Britain, Spainand Belgium were the five countries with the highest Private Label shares.

North America, which ranked second in regional Private Label shares, saw a significant growthof Private Label sales, up 7%. The share of Private Label in this region is currently at 16%.

Although starting from a smaller base, Private Label in the Emerging Markets saw the fastestgrowth over the last year, up 11%. Private Label now holds a 6% share of sales in the Emerging

Markets. This growth was primarily driven by the increasing strength of the modern trade (wherePrivate Label goods are more prevalent), as well as the entry of Private Label products into newcategories.

SHARE AND GROWTH RATES OF PRIVATE LABEL BY REGION(BASED ON VALUE SALES)

17%

23%

16%

6%

4%

2%

0% 5% 10% 15% 20% 25%

Global

Europe

North America

Emerging

Markets

Asia Pacific

Latin America

5%

4%

7%

11%

5%

5%

0% 2% 4% 6% 8% 10% 12%

Global

Europe

North America

Emerging

Markets

Asia Pacific

Latin America

PLSHARE PLGROWTH


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EUROPEAN PRIVATE LABEL SALES EXPERIENCED GREATEST MARKET SHARE GAIN

In comparison to year ago, global Private Label sales grew by 5%, outpacing manufacturerbrands (growing by only 2%). The result was a global gain of 0.4 share points for Private Labelversus the previous year. In fact, growth in Private Label sales outpaced manufacturer brands inevery region except for Latin America. (In general, Latin America continues to be a far lessdeveloped Private Label market than the rest of the world.) The result was that Private Label inLatin America lost 0.1 points versus manufacturer brands.

Interestingly, the region with the most developed Private Label market saw the greatest gain inshare points. Private Label sales grew in Europe by 4%, while aggregated sales ofmanufacturer brands remained flat. The result was a gain of 0.7 share points for Private Label.This growth is illustrative of the fact that sales of Private Label have not peakedeven withinthe largest Private Label markets.

REFRIGERATED

FOOD HAD THE HIGHEST SHARE OF

PRIVATE

LABEL

Across product areas, Paper Products, Plastic Bags & Wraps has traditionally been thestrongest product area for Private Label sales (as seen in our 1998 and 2003 studies). AlthoughPrivate Label shares in this product area are still strong, now at 31%, and continue toexperience growth, Private Label Refrigerated Food now tops the list, with an aggregated shareof value sales of 32%. The most significant share of Private Label sales within this area wasseen within the Refrigerated Complete Ready Meals category (Private Label had a value shareof 47%). Retailer development of Private Label brands to meet the needs of their shoppers forconvenient meal alternatives has resulted in the growth of this category.

As seen in our previous studies, Private Label shares within the areas of Personal Care,Cosmetics and Baby Food were the smallest at less than 5%.

PRIVATE LABEL SHARES AND GROWTH RATES BY PRODUCT AREA(BASED ON VALUE SALES)

PRODUCT AREA PLSHAREPL

GROWTH PRODUCT AREA PLSHAREPL

GROWTH

1 Refrigerated Food 32% 9% 8 Non-Alcoholic Beverages 12% 3%

2 Paper, Plastic & Wraps (PPW) 31% 2% 9 Home Care 10% 2%

3 Frozen Food 25% 3% 10 Snacks & Confectionery 9% 8%

4 Pet Food 21% 11% 11 Alcoholic Beverages 6% 3%

5 Shelf-Stable Food 19% 5% 12 Personal Care 5% 3%

6 Diapers & Feminine Hygiene 14% -1% 13 Cosmetics 2% 23%

7 Health Care 14% 3% 14 Baby Food 2% 13%


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PRIVATE LABEL BRANDS PRICED A THIRD LOWER THAN MANUFACTURER BRANDS

On a global basis, across all of the 38 countries and 80 categories studied, Private Labelproducts were priced, on average, 31% lower than their manufacturer counterparts. Thevariance across regions ranged from 40% lower in the Emerging Markets to 25% lower in LatinAmerica and Asia Pacific. It is interesting to note that the two least developed regions (from aPrivate Label perspective), also had the smallest price differential versus manufacturer brands.

On a category basis, the average price differential ranged from Private Label being priced 46%lower in Personal Care products to just 16% lower for Refrigerated Food. At the individualcountry/category level, however, there were a number of examples where Private Labelproducts had an average price that was actually higher than the manufacturer brands. Onereason for this was the presence of premium Private Label products. In addition, severalcountries cited intense promotional price wars among manufacturers as a contributing factor tolower manufacturer price points.

It is interesting to note that there is not a direct correlation between lower price and largestshare. Of the five product areas with the smallest price differential in comparison tomanufacturer brands, three had the largest share of Private Label and two had the smallest.

PRIVATE LABEL PRICE DIFFERENTIAL VERSUS MANUFACTURER BRANDS

-46%

-42%

-37%-36%

-34%-32%

-27%-26% -26%

-24% -24%

-20% -20%

-16%

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%PersonalCare

Pet

Food

Hea

lthCare

Hom

eCare

Diapers&

Fem

inineHygiene

Non

-Alcoholic

Beverages

She

lf-StableFood

Alc

oholic

Bev

erages

S

nacks&

Con

fectionery

Bab

yFood

Pap

er,Plastic&

Wraps

Cos

metics

FrozenFood

RefrigeratedFood


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RETAILER CONCENTRATION A KEY FACTOR IN PRIVATE LABEL DEVELOPMENT

In order to study the impact of retailer concentration on the development of Private Label, we

looked at the share of total country value sales held by the leading five retailers within eachcountry. Interestingly, there is significant variation in this measure around the world. Forexample, in the European countries of Sweden and Finland the top five retailers account fornearly 100% of total country sales, whereas in the Asian countries of South Korea and Japan,the leading retailers hold only 12% of total sales.

Not surprisingly, the level of retailer concentration was closely aligned with the level of PrivateLabel development. Of the top ten countries (ranked by share of Private Label), nine countrieshad retailer concentration of over 60%. The only exception in this group was the United Stateswhose retail environment was far more fragmented. Ranking 10th in share of Private Labelsales, the United States ranked 30th in retailer concentration. The top five retailers in the UnitedStates accounted for only 36% of total country sales. The majority of other countries with such a

fragmented retailer landscape had a far less developed Private Label market.

DISCOUNTERS CONTINUED TO PLAY A SIGNIFICANT ROLE

A contributing factor to Private Label growth, particularly in Europe, was the growing presenceof Hard Discounters. Hard Discounters sell a very limited selection of products (primarily shelfstable food) at a very low price. More importantly (for this study), hard discounters mostly sellPrivate Label products. For example, within Aldi, Private Label products account forapproximately 95% of sales. Hard Discounters such as Aldi and Lidl are present in everyEuropean country and are expanding this presence. As hard discounters continue to grow andgain share, with more stores and wider consumer acceptance, so does Private Label.

RETAILERS CREATE POWERFUL BRANDS THAT MEET CONSUMER NEEDS

The approach of retailers to Private Label, particularly in the more developed markets, hasadvanced far beyond simply meeting the consumers need for lower priced products (the moretraditionally perceived role of the Private Label brand). Retailers such as Tesco in Great Britainand Loblaws in Canada, for example, have both added new private label offerings to their mix.In addition to continuing to offer a value or no frills option, they also now offer healthy PrivateLabel lines for both adults and kids.


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CONSUMERSWHO REALLY BUYS PRIVATE LABEL?

NEARLY EVERYONELooking at consumer panel data from 14 countries, it was found that thepenetration of Private Label was significant. In fact, in nine of the 14 countries, 100% of

households had purchased Private Label products over the past year. Penetration was thesmallest in Singapore, but even there, 77% of households purchased at least some PrivateLabel products within the last year.

EIGHTY-TWO PERCENT OF BRITISH SHOPPING TRIPS INCLUDED PRIVATE LABEL

PRODUCTS

Frequency of purchase was found to be a key driver of Private Label share. Looking acrosscountries, consumers purchased Private Label products at varying degrees. Those countrieswith the highest Private Label share were found to purchase Private Label goods most often.Consumers in Great Britain (with a Private Label share of 28%), were found to have Private

Label products in their basket on 82% of their shopping trips. Private Label consumers in lessdeveloped markets generally purchased Private Label products on only 16% of their shoppingtrips.

PRIVATE LABEL CONSUMERS RANGE FROM THEYOUNG TO THE OLD, THE RICH TOTHE POOR AND FROM SINGLES TO LARGE FAMILIES

Looking across consumers and households, Private Label purchasing varied based ondemographic composition.

Income: The share of spend allocated to Private Label products was generally higher in thosehouseholds with a lower household income.

Household Size: Households with more family members allocated a higher share of their totalspend to Private Label products.Age: On trying to identify the typical age of the Private Label consumer, there was no cleartrend that held true across regions.

HOW BIG WILL PRIVATE LABEL GROW?

The limits of Private Label are currently undetermined but it seems almost certain that they havenot been reached.

In a number of countries, category penetration of Private Label is still significantlyunderdeveloped. As Private Label offerings are expanding into new markets and categories,

global share will of course grow. For example, in Switzerland, where 97% of all the categoriestracked in this study had Private Label entries, the total Private Label share was high at 45%. Inthe Philippines, however, where only 26% of the categories tracked had a Private Labelpresence, the share for Private Label was less than a percentage point.


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How big will it grow? Today, Private Label has a 17% share of market globally and it is stillgrowing. Even in the most developed market of Switzerland, Private Label continues to extendits reach. (In the last year, Private Label in Switzerland gained yet another share point).

The differential between the 17% global share and Switzerlands high of 45% is a good place tobegin our predictions for the future. Somewhere in between these two percentages is theanswer but it is important to note that as the share in Switzerland grows so does the upperboundary of this range.

As retailers with strong Private Label offerings expand their reach across categories andcountries, Private Label will continue to challenge the position of branded products in the mindsof the consumers. How high they will grow is yet to be determined.


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DETAILED FINDINGSGEOGRAPHIC INSIGHTSThe Power of Private Labellooked at retail sales across 38 countries (encompassing Europe,North America, Asia Pacific, the Emerging Markets and Latin America) and 80 categories.

Private Label value sales and share across these markets and categories grew, with 17 dollarsout of every 100 being spent on Private Label products. In 2003, Private Label share was foundto be only 15%.

As seen in the table below, the strength of Private Label varied widely across the countriesincluded in the study, from Switzerland (with a Private Label share of 45%), to the Philippines(where Private Label sales hold an insignificant share of total country sales).

VALUE SHARES OF PRIVATE LABEL BY COUNTRY

COUNTRY REGION PLSHARE COUNTRY REGION PLSHARE

1 Switzerland Europe 45% 20 Norway Europe 8%

2 Germany Europe 30% 21 Ireland Europe 7%

3 Great Britain Europe 28% 22 Czech Republic Emerging Markets 7%

4 Spain Europe 26% 23 Hong Kong Asia Pacific 4%

5 Belgium Europe 25% 24 Brazil Latin America 4%

6 France Europe 24% 25 Greece Europe 4%

7 Netherlands Europe 22% 26 South Africa Emerging Markets 4%

8 Canada North America 19% 27 Puerto Rico Latin America 4%

9 Denmark Europe 17% 28 Japan Asia Pacific 4%

10 United States North America 16% 29 Israel Europe 3%

11 Sweden Europe 14% 30 Singapore Asia Pacific 3%

12 Austria Europe 14% 31 Chile Latin America 3%

13 New Zealand Asia Pacific 12% 32 Argentina Latin America 3%

14 Italy Europe 11% 33 Colombia Latin America 2%

15 Portugal Europe 11% 34 Croatia Emerging Markets 2%

16 Hungary Emerging Markets 10% 35 Thailand Asia Pacific 1%17 Slovakia Emerging Markets 10% 36 Mexico Latin America 1%

18 Finland Europe 10% 37 South Korea Asia Pacific 1%

19 Australia Asia Pacific 9% 38 Philippines Asia Pacific


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As in our 2003 study, the Emerging Markets, Asia Pacific and Latin America were again foundto have less developed Private Label markets than Europe and North America. In the EmergingMarkets, the strongest Private Label development was seen in Hungary and Slovakia wherePrivate Label sales accounted for 10% of total country sales. When looking across Asia Pacific,

the Pacific countries of New Zealand and Australia had far more developed Private Labelmarkets than the Asian countries. New Zealands Private Label share was 12% and Australiaswas 9%. The Asian countries all had much smaller Private Label markets, accounting for 4% orless of total country sales. The highest ranking country in Latin America was Brazil, where only4% of sales were for Private Label products.

Europe maintained its position as the most developed Private Label region. In fact, when the 38countries were ranked, based on Private Label share, eight of the top 10 highest-rankingcountries were in Europe. The other two were in North America. Both the United States andCanada were amongst the most developed countries in terms of Private Label share.

EUROPES HIGH LEVEL OF RETAILER CONCENTRATION CORRELATES WITH STRONGPRIVATE LABEL DEVELOPMENT

Retailer concentration was measured as the share of sales held by the top five retailers withineach country. Of the ten most developed Private Label countries, nine had retailerconcentrations over 60%. The United States was the only exception among this group - despitea more fragmented marketplace (with a retailer concentration of only 36%), its share of PrivateLabel was still among the top ten countries. Generally, across the countries, when retailerconcentration was low, the share of Private Label was also low.

RETAILER CONCENTRATION OF THE MOST DEVELOPED PRIVATE LABEL MARKETS

COUNTRY REGIONPRIVATE LABEL

SHARERETAILER

CONCENTRATION

1 Switzerland Europe 45% 86%

2 Germany Europe 30% 65%

3 Great Britain Europe 28% 65%

4 Spain Europe 26% 60%

5 Belgium Europe 25% 80%

6 France Europe 24% 81%

7 Netherlands Europe 22% 64%

8 Canada North America 19% 62%

9 Denmark Europe 17% 89%

10 United States North America 16% 36%


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PRIVATE LABEL GROWTH SEEN ACROSS ALL REGIONS

At the global level, aggregated Private Label sales for the last 12 months grew at 5%. At theregional level, the Emerging Markets saw the fastest growth of Private Label up 11% since

last year (albeit from a small base). This growth was attributed to the increasing strength of themodern trade (where Private Label products are far more prevalent), as well as the presence ofPrivate Label products in an increasing number of categories.

At an individual country level, the ten countries experiencing the fastest growth of private labelwere drawn from a number of regions including the Emerging Markets, Europe, Asia Pacific andLatin America.

The most surprising presence in the list below is that of Spain. Being a large developed countryin terms of total packaged goods sales and already having a Private Label share of 26%, Spainstill ranked among the top ten in Private Label growth. This strong growth was attributable to anumber of factors including: the expanded availability of Private Label products (as stores with a

focus on Private Label opened more outlets), as well as further development and innovation ofPrivate Label offerings (such as anti-wrinkling products within face care).

TOP TEN FASTEST GROWING PRIVATE LABEL MARKETS

COUNTRY REGION PLGROWTHMANUFACTURER

GROWTH PLSHARE

1 Croatia Emerging Markets 77% 0% 2%

2 Greece Europe 24% 2% 4%

3 Thailand Asia Pacific 18% 8% 1%

4 Argentina Latin America 18% 22% 3%

5 South Korea Asia Pacific 17% 1% 1%

6 Finland Europe 16% -3% 10%

7 Spain Europe 16% 6% 26%

8 Singapore Asia Pacific 16% 1% 3%

9 Colombia Latin America 15% 6% 2%

10 Hungary Emerging Markets 15% 5% 10%


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PRIVATE LABEL CONTINUED TO GAIN SHAREMOST SIGNIFICANTLY IN EUROPE

The growth of Private Label brands over the last 12 months again outpaced that ofmanufacturer brands. As mentioned previously, aggregated Private Label sales for the last 12

months grew globally at 5%, with manufacturer brands growing by only 2%. The result was again in Private Label share across the 38 countries of 0.4 share points. In two-thirds of thecountries studied (26 out of 38), Private Label brands were growing at a faster rate than theirmanufacturer counterparts.

The most significant share gains for Private Label were in the developed Private Label region ofEurope. Private Label sales grew in Europe by 4%, while aggregated sales of manufacturerbrands remained flat. The result was a gain of 0.7 share points for Private Label.

The share gains within Europe were driven by a number of countries. Looking globally at the tencountries with the largest Private Label share gains, seven were in Europe. For five of thoseseven countries, the growth rate of manufacturer brands was actually negative. In Spain, value

sales for both manufacturer brands and Private Label brands were growing but Private Labelgrowth was at twice the pacethe result was a gain of 1.8 share points for Private Label.

TOP TEN PRIVATE LABEL MARKETS BASED ON SHARE POINT GAIN

COUNTRY REGION

PLGROWTH

RATE

MANUGROWTH

RATE

PLSHAREPOINTGAIN

1 Spain Europe 16% 6% 1.8

2 Slovakia Emerging Markets 14% -6% 1.6

3 Netherlands Europe 8% -2% 1.6

4 Finland Europe 16% -3% 1.5

5 Sweden Europe 10% -2% 1.4

6 France Europe 3% -2% 1.0

7 Germany Europe 3% -2% 1.0

8 Croatia Emerging Markets 77% 0% 0.8

9 Hungary Emerging Markets 15% 5% 0.8

10 Norway Europe 14% 1% 0.8

A contributing factor to Private Label growth, particularly in Europe, was the growing presenceof Hard Discounters. Hard Discounters sell a very limited selection of products (primarily shelfstable food) at a very low price. More importantly (for this study), hard discounters mostly sellPrivate Label products. For example, within Aldi, Private Label products account forapproximately 95% of sales. Hard Discounters such as Aldi and Lidl are present in everyEuropean country and are expanding this presence. As hard discounters continue to grow andgain share, with more stores and wider consumer acceptance, so does Private Label.


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CATEGORY INSIGHTS

In order to provide a fair representation of the role of Private Label across a wide range ofproduct areas, we chose a selection of 80 different categories within 14 different product areas.For example, within the larger product area of Refrigerated Food, six categories were chosen toprovide a perspective on this area:

Milk

Yogurt

Butter/Margarine

Cheese

Complete Ready Meals

Meat/Poultry/Game

REFRIGERATED FOOD TAKES THE LEAD AS THE MOST DEVELOPED PRIVATE LABELPRODUCT AREA

Refrigerated Food, represented by the six categories cited above, had the highest overall shareof Private Label in the study, with an aggregated value share of 32% (see chart included in theExecutive Summary). Within this area, the Complete Ready Meals category had the highestPrivate Label share, with nearly half of the category sales (47%) made up of Private Labelproducts. The most significant Private Label shares for this category were found in Europe. InGreat Britain, for example, 97% of sales in the Refrigerated Complete Ready Meals categorywere for Private Label brands. Another significant Private Label category in Refrigerated Foodwas Milk, with 43% of sales accounted for by Private Label brands.

In addition to Refrigerated Food, Frozen Food and Shelf-Stable Food also had a number ofentries in the top Private Label categories when ranked on share. In aggregated sales, each ofthese product areas had over 20% of sales accounted for by Private Label brands.

As identified in the 2003 study, the Private Label stronghold in Paper Products, Plastic Bags &Wraps (PPW) was still evident. This product area ranked second in Private Label share at 31%.Furthermore, looking globally across all of the 80 categories studied, the category of AluminumFoil (a part of PPW) had the highest Private Label share at 49%. Penetration of Private Label inthis area across all of the countries was a significant contributor to share, with five of the sixcategories in this product area having Private Label products present in every country.


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VALUE SHARES OF PRIVATE LABEL BY CATEGORY

CATEGORY PRODUCT AREAPL

SHARE CATEGORY PRODUCT AREAPL

SHARE

1 Aluminum Foil PPW 49% 41 Fabric Softeners Home Care 13%2 Complete Ready Meals Refrigerated 47% 42 Mouthwash Personal Care 13%

3 Milk Refrigerated 43% 43 Pain Relief Health Care 13%

4 Garbage/Refuse Bags PPW 40% 44 Wine Alcoholic Bev 12%

5 Meat/Poultry/Game Frozen 39% 45 Mayonnaise Shelf-Stable 12%

6 Fish/ Shellfish/ Seafood Frozen 39% 46 Wet Soup Shelf-Stable 12%

7 Vegetables Frozen 38% 47 Breakfast Cereals - RTE Shelf-Stable 11%

8 Vegetables Shelf-Stable 36% 48 Whisky Alcoholic Bev 11%

9 Kitchen Paper/Towel PPW 33% 49 Cleansing - Bath/Shower Personal Care 10%

10 Cheese Refrigerated 33% 50 Household Cleaners Home Care 10%

11 Potato Fries Frozen 32% 51 Feminine Personal Hygiene Diapers/Fem Hyg 10%

12 Plastic Wrap/Rolls PPW 31% 52 Savory/Neutral Crackers Shelf-Stable 9%

13 Cooking Oil Shelf-Stable 30% 53 Cereal/Fruit/Muesli Bars Snacks/Conf 9%

14 Toilet Tissue PPW 30% 54 Drinking Yogurt Non-Alco Bev 9%

15 Jam/Jelly/Marmalade Shelf-Stable 28% 55 Toothbrushes Personal Care 9%

16 Meat/Poultry/Game Refrigerated 28% 56 Skin Tanning (Protection) Personal Care 9%

17 Rice Shelf-Stable 26% 58 Laundry Detergent Home Care 8%

18 Facial Tissue PPW 24% 57 Chips/Crisps Snacks/Conf 8%

19 Dry Pasta Shelf-Stable 23% 59 Carbonated Beverages Non-Alco Bev 8%

20 Dog Food Pet Food 22% 60 Dry Soup Shelf-Stable 7%

21 Butter/Margarine Refrigerated 21% 61 Chocolate Snacks/Conf 7%

22 Cat Food Pet Food 20% 62 Facial Cleansing Personal Care 6%

23 Vodka Alcoholic Bev 19% 63 Body Moisturizers Personal Care 6%

24 Auto Dish Detergent Home Care 19% 64 Disposable Razors Personal Care 6%

25 Juices/Juice-Based Drinks Non-Alco Bev 19% 65 Fresheners/Deodorizers Home Care 6%

26 Ice Cream/Frozen Yogurt Frozen 18% 66 Sports Energy Drinks Non-Alco Bev 5%

27 Pizza Frozen 17% 67 Hair Styling Personal Care 5%

28 Disposable Baby Diapers Diapers/Fem Hyg 17% 68 Toilet Soap Personal Care 4%

29 Toilet Care Home Care 17% 69 Eye Shadow Cosmetics 4%

30 Complete Ready Meals Frozen 16% 70 After Shave Preps Personal Care 3%

31 Ketchup - Tomato Based Shelf-Stable 16% 71 Face Moisturizers Personal Care 3%

32 Sweet Biscuits (Cookies) Snacks/Conf 16% 72 Shampoo Personal Care 3%

33 Flavored Milk Drinks Non-Alco Bev 16% 73 Insect Control Home Care 3%

34 Self-Adhesive Dressings Health Care 16% 74 Beer/Lager/Ales Alcoholic Bev 3%

35 Yogurt Refrigerated 15% 75 Deodorants Personal Care 3%

36 Water Non-Alco Bev 14% 76 Toothpaste Personal Care 3%

37 Cold Remedies Health Care 14% 77 Baby Formula Baby Food 2%

38 Tea Non-Alco Bev 14% 78 Lip Stick/Gloss Cosmetics 2%

39 Coffee Non-Alco Bev 13% 79 Baby Food Baby Food 1%

40 Hand Dish Detergent Home Care 13% 80 Chewing Gum Snacks/Conf 1%


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As with the Power of Private Labelstudy released in 2003, the lowest level of Private Labeldevelopment was seen primarily in three product areas: Personal Care, Cosmetics and BabyFood. Interestingly, Personal Care Private Label products were available in most countries, butthe Private Label share was still only at 5% of value sales. For example, Shampoo Private Label

products were available in 37 of the 38 countries measured, but Private Label market share inthis category was limited to 3%.

For Cosmetics, however, availability of Private Label products did limit the value share. LipStick/Gloss and Eye Shadow Private Label brands were only available in half of the countriesmeasured. Similarly in the product area of Baby Food, only 15 of the 33 countries measuredhad Private Label Baby Food sales and only six of 32 had Private Label Baby Formula.

FASTEST GROWING CATEGORIES NOT ALWAYS THE SMALLEST CATEGORIES

It is not surprising that a number of the categories that experienced the fastest growth in PrivateLabel sales over the last year were the smaller, less developed Private Label categories. For

example, Eye Shadow, ranked 69th in Private Label share, but was the fastest growing category,growing by 34%. Similarly, Chewing Gum, the category with the smallest Private Label share,saw a 23% growth in Private Label sales.

Interestingly, however, the Private Label category with the second largest share, CompleteReady Meals, was also one the fastest growing categories. Complete Ready Meals grew by14% in the last year. Similarly, other larger Private Label categories, including Chocolate, Waterand Dog Food, also experienced strong growth

TOP TEN FASTEST GROWING PRIVATE LABEL CATEGORIES

CATEGORY PRODUCT AREAPL

GROWTHMANU

GROWTHPL

SHARE

1 Eye Shadow Cosmetics 34% 3% 4%

2 Drinking Yogurt Non-Alco Bev 28% 18% 9%

3 Chewing Gum Snacks/Conf 23% 4% 1%

4 Baby Food Baby Food 20% 3% 1%

5 Lip Stick/Gloss Cosmetics 16% -3% 2%

6 Complete Ready Meals Refrigerated 14% 7% 47%

7 Chocolate Snacks/Conf 13% 2% 7%

8 Face Moisturizers Personal Care 13% 7% 3%

9 Water Non-Alco Bev 13% 1% 14%

10 Dog Food Pet Food 12% 5% 22%


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PRIVATE LABEL GAINED SHARE ACROSS A NUMBER OF CATEGORIES

In 60 of the 80 categories measured, Private Label brands outpaced the growth of manufacturerbrands resulting in share gains. In the categories of Refrigerated Complete Ready Meals and

Frozen Fish/Shellfish/Seafood, the share gain for Private Label was more than one and a halfshare points. (A number of other categories actually experienced higher Private Label growthbut because of the small Private Label sales value in the category, the share gains wereminimal and not included in the top ten.)

In the category of Toilet Care, the gain in share for Private Label was not so much due to thelarge growth in Private Label but rather a decline in manufacturer sales over year ago.

TOP TEN PRIVATE LABEL CATEGORIES IN SHARE GAIN

CATEGORY PRODUCT AREA PLGROWTHMANU

GROWTHPLSHARE POINT

GAIN

1 Complete Ready Meals Refrigerated 14% 7% 1.6

2 Fish/Shellfish/Seafood Frozen 7% 1% 1.5

3 Cooking Oil Shelf Stable 12% 4% 1.4

4 Water Non-Alco Bev 13% 1% 1.3

5 Butter/Margarine Refrigerated 10% 1% 1.3

6 Dog Food Pet Food 12% 5% 1.2

7 Toilet Care PPW 7% -1% 1.1

8 Plastic Wrap/Rolls PPW -2% -6% 1.0

9 Milk Refrigerated 8% 4% 0.9

10 Meat/Poultry/Game Refrigerated 9% 4% 0.9

PRIVATE LABEL ACTIVE IN THE HOTTEST OF CATEGORIES

In addition to the 80 categories studied, we looked at the top categories from ourWhats Hot inFood & Beverages and Personal Care studies published in 2004.

In the Whats Hot in Food & Beverages study, ACNielsen had identified Soy Based FlavoredDrinks as the fastest growing category, growing by 30%. In this study we looked at a morecomprehensive category definition, the aggregate of Soy Based Drinks and Milks (both flavoredand unflavored products). The value sales for this category grew by 26% over the last 12months, with Private Label products having a small but expanded presence. In 2005, PrivateLabel brands captured a 5% share of aggregated value sales within the category, with valuesales growth of 45% over year ago.

Similarly, the 2004 Whats Hot in Personal Care study identified Tooth Stain Removers andWhiteners as the fastest growing category. Unlike 2004, the total category did not show growthin 2005 (declining in sales by 25% over last year), however, Private Label brands held a 5%share of the value sales and experienced 66% growth.


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PRICING TRENDSThe average price per category was calculated for each country by dividing the total dollar sales

by the total volume sold. Given the variances in units of measurement across the 38 countriesand 80 categories, it was not possible to compare the actual price per unit. Within each country,however, the unit of measurement for a category was consistent, making it possible to comparethe average price difference between manufacturer brands and Private Label products on acategory-by-category basis.

PRICE DIFFERENTIAL BETWEEN PRIVATE LABELAND MANUFACTURER BRANDS BY COUNTRY

COUNTRY REGIONPLPRICE

DIFFERENTIAL COUNTRY REGIONPLPRICE

DIFFERENTIAL

1 Greece Europe -48% 20 Philippines Asia Pacific -32%

2 Australia Asia Pacific -47% 21 South Korea Asia Pacific -31%

3 Germany Europe -46% 22 Mexico Latin America -28%

4 Belgium Europe -45% 23 South Africa Emerging Markets -28%

5 Czech Rep Emerging Markets -44% 24 US North America -28%

6 Spain Europe -44% 25 Switzerland Europe -27%

7 Hungary Emerging Markets -43% 26 Canada North America -27%

8 Ireland Europe -42% 27 Denmark Europe -27%

9 Portugal Europe -42% 28 Italy Europe -26%

10 France Europe -40% 29 Chile Latin America -26%

11 Austria Europe -40% 30 Netherlands Europe -26%

12 Slovakia Emerging Markets -38% 31 Japan Asia Pacific -25%

13 Sweden Europe -38% 32 Israel Europe -23%

14 Croatia Emerging Markets -37% 33 Brazil Latin America -20%

15 Finland Europe -36% 34 Puerto Rico Latin America -19%

16 UK Europe -36% 35 Colombia Latin America -19%

17 Argentina Latin America -35% 36 Singapore Asia Pacific -13%

18 Norway Europe -34% 37 Hong Kong Asia Pacific -10%

19 New Zealand Asia Pacific -33% 38 Thailand Asia Pacific -10%


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PRIVATE LABEL PRODUCT PRICED A THIRD LOWER THAN MANUFACTURER BRANDS

On a global basis, looking at the cumulated figures for all 80 categories, Private Label productswere found to offer consumers, on average, savings of 31% over manufacturer brands. These

are similar to the price differences seen in both the 1998 and 2003 studies.

Regionally, the Emerging Markets had the greatest discount on Private Label products, 40%lower than the manufacturer brands. European countries also experienced some of the largestprice differentials, with the average differential for Europe at 37%. Looking at the previous chart,the countries with the highest price differential were primarily in one of these two regions, withthe exception of Australia (ranking number two with a price difference of 47%). Greece had thelargest differential, with Private Label products sold at half the price of their manufacturercounterparts. This did differ, however, across categories. For example, Private Label HairStyling and Auto Dish products in Greece were actually priced two-thirds lower thanmanufacturer brands.

At the other end of the spectrum, Thailand and Hong Kong both experienced only a 10% pricereduction for Private Label brands. This limited price difference was closely related to the pricingapproach of the retail formats that offered Private Label (i.e., Modern Trade as compared to themore traditional shops). Similarly, the Modern Trade also introduced more premium PrivateLabel products into the market, thus lowering the price differential with manufacturer brands.

PERSONAL CARE PRIVATE LABEL PRODUCTS PRICED WITH THE LARGEST DISCOUNT

Looking at the pricing trends across the product areas included in the study, Personal Careproducts had the widest differential between Private Label and the corresponding manufacturerbrands. Private Label products in this product area were, on average, priced 45% lower thanmanufacturer brands. The following chart shows the Personal Care categories that

demonstrated this trend. Private Label products within the categories of After-Shave Preps,Mouthwash and Shampoo were all priced at less than half the price of the manufacturer brandson a global basis (a differential of over 50%). One reason for this large difference is that thetype of private label products available in the Personal Care area are of the more basic varietywith few added features or benefits.

Two Health Care categories, Pain Relief and Cold Remedies, and the Non-Alcoholic Beveragecategory of Sports Energy Drinks, saw a similar difference in price (Private Label productspriced at half that of manufacturer brands).

Interestingly, Private Label products in the Chewing Gum category were priced at a premiumwhen compared to manufacturer brands. This trend was seen in seven of the 18 countries

where Private Label brands were available. The reasons for this trend differed across countries,but a number of countries related the higher price to the fact that these products offered addedbenefits (e.g., coated gum) and were, therefore, priced at a premium.


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PRICE DIFFERENTIAL OF PRIVATE LABEL BY CATEGORY

CATEGORY PRODUCT AREAPLPRICE

DIFFERENTIAL CATEGORY PRODUCT AREAPLPRICE

DIFFERENTIAL

1 After Shave Preps Personal Care -55% 41 Toothpaste Personal Care -31%

2 Sports Energy Drinks Non-Alco Bev -52% 42 Vodka Alcoholic Bev -31%

3 Mouthwash Personal Care -51% 43 Drinking Yogurt Non-Alco Bev -30%

4 Shampoo Personal Care -51% 44 Ketchup - Tomato Based Shelf-Stable -30%

5 Pain Relief Health Care -50% 45 Flavored Milk Drinks Non-Alco Bev -29%

6 Cold Remedies Health Care -50% 46 Beer/Lager/Ales Alcoholic Bev -28%

7 Disposable Razors Personal Care -49% 47 Rice Shelf-Stable -28%

8 Fresheners/Deodorizers Home Care -44% 48 Whisky Alcoholic Bev -28%

9 Carbonated Beverages Non-Alco Bev -43% 49 Savory/Neutral Crackers Shelf-Stable -28%

10 Body Moisturizers Personal Care -43% 50 Juices/Juice-Based Drinks Non-Alco Bev -28%

11 Toothbrushes Personal Care -43% 51 Potato Fries Frozen -27%

12 Cleansing - Bath/Shower Personal Care -43% 52 Dry Pasta Shelf-Stable -27%13 Dog Food Pet Food -43% 53 Coffee Non-Alco Bev -27%

14 Skin Tanning (Protection) Personal Care -42% 54 Plastic Wrap/Rolls PPW -26%

15 Face Moisturizers Personal Care -42% 55 Kitchen Paper/Towel PPW -25%

16 Feminine Personal Hygiene Diapers/Fem Hyg -42% 56 Disposable Baby Diapers Diapers/Fem Hyg -25%

17 Hair Styling Personal Care -41% 58 Baby Food Baby Food -24%

18 Deodorants Personal Care -41% 57 Lip Stick/Gloss Cosmetics -24%

19 Fabric Softeners Home Care -41% 59 Eye Shadow Cosmetics -24%

20 Breakfast Cereals - RTE Shelf-Stable -40% 60 Aluminum Foil PPW -24%

21 Household Cleaners Home Care -39% 61 Vegetables Shelf-Stable -23%

22 Cat Food Pet Food -39% 62 Chocolate Snacks/Conf -22%

23 Wine Alcoholic Bev -38% 63 Vegetables Frozen -22%

24 Tea Non-Alco Bev -37% 64 Garbage/Refuse Bags PPW -22%

25 Auto Dish Detergent Home Care -37% 65 Butter/Margarine Refrigerated -21%

26 Self-Adhesive Dressings Health Care -36% 66 Milk Refrigerated -17%

27 Hand Dish Detergent Home Care -35% 67 Yogurt Refrigerated -17%

28 Water Non-Alco Bev -34% 68 Meat/Poultry/Game Refrigerated -16%

29 Laundry Detergent Home Care -34% 69 Cheese Refrigerated -16%

30 Jam/Jelly/Marmalade Shelf-Stable -34% 70 Toilet Tissue PPW -13%

31 Toilet Soap Personal Care -33% 71 Dry Soup Shelf-Stable -12%

32 Mayonnaise Shelf-Stable -33% 72 Complete Ready Meals Refrigerated -11%

33 Chips/Crisps Snacks/Conf -33% 73 Pizza Frozen -11%

34 Facial Cleansing Personal Care -33% 74 Fish/Shellfish/Seafood Frozen -11%

35 Cereal/Fruit/Muesli Bars Snacks/Conf -33% 75 Insect Control Home Care -9%

36 Toilet Care Home Care -32% 76 Baby Formula Baby Food -6%

37 Ice Cream/Frozen Yogurt Frozen -32% 77 Complete Ready Meals Frozen -5%

38 Cooking Oil Shelf-Stable -31% 78 Meat/Poultry/Game Frozen -2%

39 Sweet Biscuits (Cookies) Snacks/Conf -31% 79 Wet Soup Shelf-Stable 0%

40 Facial Tissue PPW -31% 80 Chewing Gum Snacks/Conf 7%


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PRIVATE LABEL BRANDS MEET CONSUMER NEEDS BEYOND A LOW PRICE

As we saw in the case of the added value products in Chewing Gum, Private Label products arenot always competing with manufacturer brands simply on price. In a number of the more

developed markets, retailers are developing their own lines to respond to growing consumerneeds.

Alongside a general improvement in the quality of products, Private Label offerings now alsoinclude products specifically focused on providing healthy alternatives. In addition, retailershave used the strength of their Private Label brand to develop other services such as mobilephones and financial services.

ACLOSER LOOK AT TWO KEY BRANDS

TESCO

The Tesco brand, launched in Great Britain in 1924, was one of the earliest Private Labelbrands sold. Today, alongside the Tesco Value brand (usually depicted by blue and whitestripes), Tesco have a premium quality brand, Tesco Finest, which also spans most productareas in the store. Overall, Tesco has been responsive to consumers and cultivated their storebrands to respond to a variety of consumer needs and beliefs.

Tesco Organics was launched over a decade ago to provide consumers with a variety oforganic foods from cookies to sausages.

In response to the growing share of the population with allergies or intolerances, TescoFree From includes over 150 products which are gluten, wheat or milk free.

The Tesco Healthy Livingrange includes over 500 products which have reduced fat,

sugar and sodium for consumers who prefer a healthier alternative. Similarly, Tesco Carb Controlwas specifically developed to make it easier and more

convenient for consumers to follow a low carb eating program.

On a more ethical note, Tesco Fair Trade products are fair trade certified which meansproducers and small suppliers in the developing world are guaranteed to receive a fairprice for their produce contained in these products.

Finally, Tesco Kids includes products from toothbrushes to fun size apples designed tocater specifically to the next generation.

Furthermore, Tesco has also used its brand equity to expand into personal finance, insuranceand the telecommunication industry.


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PRESIDENTS CHOICE

With the launch of the first Presidents Choice (PC) products in Loblaws in 1984, the aim was tooffer better value to Canadian consumers. Today, the brand has expanded beyond a price-pointfocus to offer quality, health-focused alternatives to consumers in Canada as well as the UnitedStates, the Caribbean, Hong Kong and Israel.

PC Blue Menuis aimed at the growing demands of health-conscious consumers.Focusing on nutrition, PC Blue Menuprovides healthier options including low fat, lowcalorie and high fiber products.

Similarly, as a result of consumer demand for organic foods, PC Organics offers a rangeof organic foods including organic juices, cereals, produce and baby food.

PC Mini Chefs extends the range of Presidents Choice products to provide parents witha healthy option for their children as well.

Presidents Choice has now expanded its product offerings from food products to non-fooditems including household and beauty products, pet food, lawn and garden and generalmerchandise and more recently financial services and telecommunications.

AND THE TREND CONTINUES

On a similar, more news-breaking note, 7-Eleven has just responded to a growing consumerneed for healthy foods by introducing a line of Private Label functional foods and beveragesunder its Formula 7 name.


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PRIVATE LABEL CONSUMERSTo supplement the retail measurement data, ACNielsen collected consumer panel data from 14

of the 38 countries, encompassing four of the five regions:

Australia, Hong Kong and Singapore in Asia Pacific

Finland, France, Germany, Great Britain, Italy, Spain and Switzerland in Europe

Chile and Colombia in Latin America

Canada and United States in North America

Consumer panel data allowed us to look at the shopping behaviors and demographics of PrivateLabel consumers around the world.

PRIVATE LABEL PRODUCTS WERE PURCHASED BY NEARLY ALL CONSUMERS WITHIN

THESE COUNTRIESIn nine of the 14 countries studied, 100% of households had purchased Private Label productsover the past year. Penetration was most limited in Singapore, but even in Singapore 77% ofhouseholds purchased at least some Private Label products over the last 12 months. The othercountries where Private Label was not purchased by every household included Italy (98%penetration), Hong Kong (96%), Chile (94%) and Colombia (80%).

PRIVATE LABEL PENETRATION BY COUNTRY

50% 70% 90%

Singapore

Colombia

Chile

Hong Kong

Italy

Australia

Finland

US

Canada

France

Spain

Great Britain

Germany

Switzerland


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EIGHTY-TWO PERCENT OF BRITISH SHOPPING TRIPS INCLUDED PRIVATE LABELPRODUCTS

Frequency of purchase was found to be a key driver of Private Label share. Across countries,consumers purchased Private Label products at varying degrees. Those countries with thehighest Private Label share were found to purchase Private Label goods most often.Consumers in Great Britain (with a Private Label share of 28%), were found to have PrivateLabel products in their basket on 82% of their shopping trips. Private Label consumers in lessdeveloped markets generally purchased Private Label products on only 16% of their shoppingtrips.

SHARE OF SHOPPING TRIPS INCLUDING PRIVATE LABEL

18%

23%

11%

12%

59%

34%

26%

45%

44%

73%

54%

82%

55%

70%

0% 20% 40% 60% 80% 100%

Colombia

Chile

Singapore

Hong Kong

Australia

Finland

Italy

US

Canada

France

Spain

Great Britain

Germany

Switzerland

low

med

high

ShareLevel

Average67%

Average42%

Average16%


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PRIVATE LABEL CONSUMERS RANGE FROM THEYOUNG TO THE OLD, THE RICH TOTHE POOR AND FROM SINGLES TO LARGE FAMILIES

Looking across consumers and households, Private Label purchasing varied based on

demographic composition.

Income

The share of spend allocated to Private Label products was generally higher in thosehouseholds with a lower household income.

PRIVATE LABEL SHARE OF SPEND SEGMENTED BY INCOME LEVEL

Interestingly, a handful of countries, namely, Singapore, Great Britain, Italy and Colombia,experienced the reverse trend. Within these four countries, it was the high income householdsthat allocated the greatest share of their total spend to Private Label products. Reasons for thiswere related to two very different situations. In some countries the premium products offered byretailers attracted a significant number of households with higher incomes, thus raising the

share of spend on Private Label. In Colombia, however, the reason was quite different. Lowerincome families, relying on public transportation, had limited access to Private Label brands dueto the fact that stores selling Private Label were further away from their homes (particularlywhen compared to their corner stores).

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Europe North America Asia Pacific Latin America

Share of

Spend

Low Medium High Low Medium HighLow Medium HighLow Medium High

Income Level


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Household Size

Overall, households with larger families allocated a higher share of their total spend to Private

Label products than households with smaller families.

PRIVATE LABEL SHARE OF SPEND SEGMENTED BY HOUSEHOLD SIZE

It is worth noting that, although Great Britain followed the general trend, whereby the largerhouseholds allocated the greatest share of spend to Private Label products (42%), smallfamilies in Britain also allocated a considerable share of total sales to Private Label brands(41%).

The only country where this trend was reversed was Italy. Surprisingly, in Italy, households withonly one or two family members, allocated a greater share of their total spend to Private Labelthan did larger households.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Small Medium Large Small Medium Large Small Medium Large Small Medium Large

Share ofSpend

Household Size


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Age

The typical age of the Private Label consumer varied across regions as well as by local country

within the regions.

PRIVATE LABEL SHARE OF SPEND SEGMENTED BY AGE OF HOUSEHOLD

Within both Latin America and North America, it was generally found that the youngerhouseholds allocated a greater share of their total spend to Private Label brands. Within AsiaPacific, it was the older consumers that allocated a greater share of spend to Private Label.Within Europe, overall, the middle aged consumers were the ones that gave the greatest shareof total spend to Private Label; however, the trend in Spain and Great Britain differed from this.In Spain the greatest share to Private Label was allocated by the younger consumers and inGreat Britain by the middle aged consumers.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%


Young Middle OldAged




Share ofSpend

Age of Household


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IN SUMMARY.Private Label continues to grow. In over two-thirds of the markets studied, Private Label grew

faster than its manufacturer counterparts.

Europe continues to be the region with the highest share of Private Label. Switzerlandmaintained its position as the number one Private Label country, growing to a 45% value shareof market.

With the growth of the modern trade, the Emerging Markets experienced the largest growth ratefor Private Label, albeit from a small base.

Refrigerated Food was found to be the product area with the largest Private Label share(replacing Paper, Plastic & Wraps formerly number one). This is primarily due to the increaseddevelopment of Private Label in the Complete Ready Meals category.

Globally, the price of Private Label brands was, on average, a third lower than manufacturerbrands. This price differential differed by country and category.

Retailer concentration continues to be a contributing factor in the development of Private Label.The more concentrated the marketthe greater the share of Private Label. As HardDiscounters expand their stores and enter new markets, the share of Private Label will grow.

Around the world, almost all consumers, to some degree, use Private Label. The share ofPrivate Label was highest among larger families and those with lower incomes. Frequency ofpurchase was found to be a key driving factor.

The growth of Private Label will continue. Private Label products today are being introduced intoboth new markets and categories. The introduction of more premium Private Label lines haschanged both the shape and perception of what a store brand can be. How far Private Labelwill grow is yet to be determined.


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PERIODS INCLUDED

Information was collected for the years ending April 2004 and 2005.

CATEGORY COVERAGE REPRESENTED A WIDE CROSS-SECTION OF PRODUCT AREAS

To provide a wide perspective on Private Label trends, the retail measurement data includesviews of 80 different categories within 14 larger product areas - Alcoholic Beverages; Non-Alcoholic Beverages; Snacks & Confectionery; Baby Food; Shelf-Stable Food; RefrigeratedFood; Frozen Food; Home Care; Paper Products, Plastic Bags & Wraps (PPW); Diapers &Feminine Hygiene; Personal Care; Cosmetics; Health Care; and Pet Food. The actualcategories chosen were not necessarily those with the highest Private Label share, but ratherrepresented a varied cross-section of consumer products.

Due to the fact that category coverage can differ across countries, we have cited in our findingsthe actual number of countries included in this study for each category. Where products weresegmented into different categories across markets, we have reconstructed the categories inorder to have the most consistent view available.

Channel coverage varied from country to country but generally included supermarkets,hypermarkets and mass merchandisers. The data from some countries also includesconvenience stores and drug stores. Department stores, cash and carry stores, wholesalersand food service outlets are generally excluded.

On looking specifically at the coverage of Private Label activity, certain exclusions should benoted that may have affected the country specific trends observed. For example, data from thehard discounters Lidl and Aldi was not included for the following countries:

Lidl: Czech Republic, Slovakia, Austria, Finland, France, Greece, Ireland, Netherlands, Norway,Portugal and Sweden.

Aldi: Australia (liquor), Denmark, Ireland, France, Netherlands (Private Label products), UnitedStates.

Additionally, the following stores are also excluded from this study:

Austria Hofer Philippines SM Supermarket

Croatia Kaufland MexicoWal-Mart; Soriana; HEB; Gigante;Commercial Mexicana;

Denmark Coop South Africa Woolworths

France Hard Discounters South Korea E-MartGreat Britain Marks and Spencer Sweden Netto

Greece Sklavenitis (some categories) Thailand Leader Price


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CATEGORY COVERAGE(Number of Countries Included)

ALCOHOLIC BEVERAGESBeer/Lager/Ales (35)Wine (23)Vodka (26)Whisky (27)

BABY FOODBaby Food (33)Baby Formula (32)

SNACKS &CONFECTIONERYChocolate (37)Chewing Gum (34)Chips/Crisps (38)Cereal/Fruit/Muesli Bars (30)Sweet Biscuits (Cookies) (36)

NON-ALCOHOLIC BEVERAGESCoffee (38)Tea (31)Carbonated Beverages (37)Juices/Juice-Based Drinks Ready To Drink (37)Sports Energy Drinks (33)Flavored Milk Drinks (31)Drinking Yogurt (28)Water (38)

SHELF-STABLE FOODBreakfast Cereals Ready To Eat (38)Dry Pasta (31)Rice (30)

Savory/Neutral Crackers (33)Dry Soup (35)Wet Soup (24)Containered Vegetables (25)Cooking Oil (32)Mayonnaise (37)Ketchup - Tomato Based (36)Jam/Jelly/Marmalade (25)

PERSONAL CARECleansing - Bath/Shower (36)Deodorants (37)Shampoo (38)

Hair Styling (34)Mouthwash (30)Toothpaste (38)Toothbrushes (Manual) (38)Toilet Soap (37)Skin Tanning (Protection) (28)Disposable Razors (36)Facial Cleansing (35)Face Moisturizers (34)Body Moisturizers (33)After Shave Preps (25)

FROZEN FOODIce Cream/Frozen Yogurt (34)Potato Fries (28)Vegetables (27)Meat/Poultry/Game (23)

Fish/ Shellfish/ Seafood (25)Pizza (30)Complete Ready Meals (26)

HOME CAREHand Dish Detergent (37)Auto Dish Detergent (29)Fresheners/Deodorizers (37)Household Cleaners (37)

Toilet Care (36)Insect Control (31)Laundry Detergent (38)Fabric Softeners (36)

REFRIGERATED FOODMilk (31)Yogurt (35)Butter/Margarine (33)Cheese (35)Complete Ready Meals (16)Meat/Poultry/Game (14)

PAPER PRODUCTS,PLASTIC BAGS &WRAPS (PPW)Aluminum Foil (21)Plastic Wrap/Rolls (23)Garbage/Refuse Bags (22)Kitchen Paper/Towel (33)Toilet Tissue (34)Facial Tissue (36)

DIAPERS &FEMININE HYGIENEDisposable Baby Diapers (38)Feminine Personal Hygiene (38)

COSMETICSEye Shadow (15)Lip Stick/Gloss (19)

HEALTH CARE

Pain Relief (22)Self-Adhesive Dressings (21)Cold Remedies (17)

PET FOOD

Cat Food (33)Dog Food (34)


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CONSUMER PANEL DATA ESTABLISHED TO REFLECT RETAIL MEASUREMENT

In order to align the data sources, consumer panel data from each country generally covered

the same 80 categories included in the retail measurement data. For some countries not allcategories were available; for others a wider selection of categories was included in themeasurement of consumer behavior.

DEMOGRAPHIC GROUPINGS ALIGNED ACROSS COUNTRIES

To enable the comparison of consumer panel data across countries, the local segmentationswithin each demographic - Household Income, Household Size and Household Age - wereconsolidated to form three basic groups low/medium/high, small/medium/large, young/middleaged/old. The actual income, age and size boundaries for these groups varied slightly acrosscountries.


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EXCHANGE RATES USED

To obtain a global perspective local currency was converted to US dollars using a constantexchange rate across the two-year period.

COUNTRY CURRENCY EXCHANGE RATE (PER US$)

EUROPEAustria, Belgium, Finland,France, Germany, Greece,Ireland, Italy, Netherlands,Portugal, Spain

Euro0.80

Denmark Danish Krone 5.96

Great Britain British Pound 0.55

Israel Israeli Shekel 4.51

Norway Norwegian Krone 6.59

Sweden Swedish Krona 7.28

Switzerland Swiss Franc 1.21

EMERGING MARKETSCroatia Croatian Kuna 5.90

Czech Republic Czech Koruna 25.50

Hungary Hungarian Forint 218.52

Slovakia Slovakia Koruna 32.77

South Africa South African Rand 6.83

ASIA PACIFICAustralia Australian Dollar 1.42

Hong Kong Hong Kong Dollar 7.39

Japan Japanese Yen 105.26

South Korea South Korean Won 1143.84New Zealand New Zealand Dollar 1.63

Philippines Philippines Peso 57.39

Singapore Singapore Dollar 1.62

Thailand Thai Baht 38.93

NORTH AMERICACanada Canadian Dollar 1.31

LATIN AMERICAArgentina Argentine Peso 2.94

Brazil Brazil Real 3.03

Chile Chilean Peso 615.38

Colombia Colombian Peso 2867.38Mexico Mexican Peso 11.69

Puerto Rico US Dollar 1.00

2005 privatelabel

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