Confidential & Proprietary Copyright © 2010 The Nielsen Company Summerfruit NZ Industry Review.

Confidential & Proprietary • Copyright © 2010 The Nielsen Company

Summerfruit NZIndustry Review

Confidential & ProprietaryCopyright © 2010 The Nielsen Company

Agenda

• Business Needs Assessment• Executive Summary & Recommendations• Homescan Methodology & Definitions• How has the fruit category performed?• How has summerfruit performed this summer?• How does this compare to other fruits?• Have prepacked summerfruit sales been successful? • Did the negative press in the Dominion (Lower NI newspaper) on 30

January impact peach sales?• What impact have early summerfruit season pickings (pre November)

had on the category? • Did the overlap in regions fruit crops in January effect demand in

2010?


Business Needs Assessment

BackgroundSummerfruit NZ want to understand how their category performs in relation to other fruit categories to help with industry planning. Report will be used for planning for the industry with relevant portions shared with the growers. Information will be used to help build on relationships with supermarket retailers.

Business Decisions/Research Questions• How did the summerfruit season perform?• Was it better or worse than a year ago?• What is driving this performance?• Have prepacked summerfruit sales been successful?• Did the overlap in regions fruit crops in January effect demand in 2010?• Did the negative press in the Dominion (Lower NI newspaper) on 30 January

impact peach sales?• What impact have early summerfruit season pickings (pre November) had on

the category?


Executive Summary

How has summerfruit performed this summer?• Summerfruit maintains #2 ranking for summer despite value declines– $ decline of 8.5% over summer (vs. -2% for total fruit) and down 1.1% category

share– 70 cents less spent on loose summerfruit each purchase occasion – Adult households, young families and older families driving the decline

• Mixed families increase loyalty to summerfruit, increasing spend on loose fruit

Have prepacked summerfruit sales been successful?• Strong growth of prepacked summerfruit (+17%) with an increase of 90 cents each

purchase occasion • 46,800 more households purchasing this summer than YA• Increased value spend by lifestages less engaged with summerfruit overall this

summer• Fewer young and mixed families buying this year– Is summerfruit less appealing for households with young children vs. other fruit

types?


Executive Summary cont.

Did the overlap in regions fruit crops in January effect demand in 2010?• Hhld penetration was higher post January than last year but average spend was

considerably lower• Lower spend per trip is the key driver behind negative performance of loose summerfruit– Spend per trip dropped immediately after Christmas and did not stabilise until

February/March• Did the excess supply of fruit in January deflate prices vs. YA?

Did the negative press in the Dominion (Lower NI newspaper) on 30 January impact peach sales?• There is no apparent effect on shopper purchase measures

What impact have early summerfruit season pickings (pre November) had on the category? • Early season household penetration is below last summers levels but higher prices could

be driver• summerfruit loyalty took a dive below last summers levels in October and never

recovered• Are these factors due to early season fruit pickings or other environmental factors?


Recommendations

Focus on increasing spend per trip to drive up summerfruit value• Prepacked formats are already achieving this• Target independent outlets where prepacked produce share of trade is

low – positive growth opportunity for retailer• Communicate recipies using fresh fruit during the season

Re-gain shopper loyalty to summerfruit• Re-engage older singles & couples and older families with summerfruit

Increased spend on total fruit but decreased share spent on summerfruit• How can customers be rewarded for higher purchase weights of loose

produce?Cross promotion opportunities with other fruit or non-fruit suppliers eg.

plums and chocolate

Communicate benefits of summerfruit for young children to overcome the potential barrier to purchase

• For example, small fruit size for small hands, essential vitamin levels of fruit types to meet daily growth requirements


Nielsen definitions & terminology

• MAT – moving annual total • YA- year ago• Penetration – % of all households buying product• Average Spend per Occasion – how much on average each

household is spending on product each time they purchase• Average Frequency of Purchase – how many times on average a

household shops for product in a given time period• AWOP$ – average $ spend per household in a given time period• CATWOP$ - average $ spend per household on the fruit and

vegetable category in a given time period• Loyalty – AWOP/CATWOP ie. Share of fruit/veg $ being spent on

summerfruit• Barcoded is used interchangeably with prepacked


How has the fruit category performed?


Fresh fruit has increased in annual value due to strong growth from barcoded fruit, but performs behind other fruit formats in supermarkets. A poor performance from loose fruit in the summer period has caused category decline. What is driving the loose fruit decline?

Fruit Category Performance - Value % Change vs YAData period to 25 April 2010

0.7%

-0.6%

9.1%

-2.0%

-4.0%

9.3%

-6% -4% -2% 0% 2% 4% 6% 8% 10%

TOTAL FRESH FRUIT

TOTAL FRUIT LOOSE

TOTAL FRUIT BARCODE

Mat 26 w eeks

84% share

16% share

Annual Supermarket $ Growth

Total Scanned Grocery 4.4%

Canned Fruit 2.9%

Frozen Fruit 14.7%


Although shoppers are still purchasing loose fruit on the same frequency, they are spending 30 cents (5%) less on average each time they purchase loose fruit. Barcoded fruit is growing due to more buyers who are shopping more often than last summer.

What are the key consumer drivers of retailer market share?(Penetration)ALL SHOPPERS - AVERAGE OCCASIONS - BASED ON VALUE ($000'S)/1000

Click on the below periods to see the trend:

04/2009

04/2010HALF YEAR TO

HALF YEAR TO

HALF YEAR TO

07/2009

10/2009

01/2010

04/2010

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439.0

405.9

373.0

350.1

337.4

300.7

296.4

295.5

275.8

426.9

424.5

378.9

364.4

384.2

290.9

328.7

327.3

311.3

Source : ACNielsen | Homescan NZ

+46,800 hhlds

-30 cents


Who is driving the decline at a retail level?Foodstuffs have declined on both MAT and 26weeks, with non supermarkets performing poorly in loose fruit vs. last summer. Progressive has gained share of trade with strong growth, particularly prepacked formats which now account for 19% of all fruit sales in their stores.

27% share of trade

Fruit Category Performance - Value % Change vs YAData period to 25 April 2010

-4.5%

-1.2%

-6.4%

9.4%

1.0%

-7.8%

-4.6%

-9.8%

11.4%

-5.1%

-15% -10% -5% 0% 5% 10% 15%

NZ TOTAL FOODSTUFFS

NZ NEW WORLD

NZ PAK N SAVE/WP

NZ TOTAL PROGRESSIVE

NZ OTHER

Mat 26 w eeks

29% share of trade

44% share of trade


Which fruits have seen the fastest growth?

•Prepared Fruit +86.6%•Prepared Fruit +86.6%

•Tropicals +15.1%•Tropicals +15.1%

•Berries +10.9%•Berries +10.9%

•Bananas+2.3%•Bananas+2.3%


Fruit Category Summary

• Fresh fruit performs behind supermarket frozen and canned fruit• Loose fruit is driving category decline as prepacked fruit

has strong growth off a small base– 30 cents (5%) less being spent on loose fruit each shopping trip– 46,800 more shoppers of prepacked fruit shopping more often

• PAK’nSAVE and independants driving decline as Progressive gains share of trade


How has summerfruit performed this summer?


Summerfruit has performed behind the category for both MAT and summer vs. prior year. As the majority of sales, loose summerfruit is driving the decline. Prepacked formats have excellent growth and gain category share, although off a small base.

Summerfruit Performance - Value % Change vs YAData period to 25 April 2010

0.7%

-7.2%

16.7%

-8.5%

-2.0%

-8.5%

17.8%

-10.2%

-15% -10% -5% 0% 5% 10% 15% 20%

TOTAL FRESH FRUIT

TOTAL FRUIT STONE FRUIT(TP)

TOTAL FRUIT STONE FRUIT(TP) BARCODE

TOTAL FRUIT STONE FRUIT(TP) LOOSE

Mat 26 w eeks

Mat $ Share 10.1% - 0.9% vs YA

93% of summerfruit -2% vs YA (MAT)

Summerfruit retains #2 ranking despite losing 1.1% category share this summer vs. YA.


Summerfruit has gained buyers this summer although is being purchased less often. Prepacked summerfruit has attracted heavier summerfruit buyers while loose summerfruit has attracted lighter spenders. How do prices compare this summer to last summer?



MAT TO 19/04/2009

MAT TO 25/04/2010

HALF YEAR TO 26/04/2009HALF YEAR TO 25/10/2009HALF YEAR TO 25/04/2010QTR TO 26/07/2009

QTR TO 25/10/2009

QTR TO 24/01/2010

QTR TO 25/04/2010

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439.0

405.9

373.0

350.1

337.4

300.7

296.4

295.5

275.8

426.9

424.5

378.9

364.4

384.2

290.9

328.7

327.3

311.3


-70 cents+90 cents

+32,400 hhlds +42,000 hhlds


What is driving how much my consumers buy over time?ALL SHOPPERS - NEW ZEALAND - TOTAL STONE FRUIT (TP)

Source : ACNielsen Homescan NZ

Summerfruit Season (08-09) Summerfruit Season (09-10)

Spend per occasion was down versus last summer, exceeding the $5 mark for the Christmas period only vs. last year when it remained elevated until April. Buyer base was slow to build, despite stronger start than last summer. Extended summer meant shoppers were buying later into the season on a more frequent basis than last summer.

Is the deflated $ per occasion the result of the over-supply in the market?


Despite shoppers spending less on fruit overall, the decrease in spend on summerfruit has seen a drop in shopper loyalty this summer. Who is driving this decline?

How is loyalty changing over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - BASED ON VALUE ($000'S)/1000




Adult hhlds, older families and young families have reduced $ spent on summerfruit this summer. High income hhlds have decreased their loose summerfruit spend by 17% this summer vs YA. Mixed families & Older S&C spent more on fresh fruit, but only mixed families increased summerfruit share of fruit repertoire. What else are they buying?

Which groups are driving my growth/decline? (Lifestage)NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - HALF YEAR TO 25/04/2010 - BASED ON VALUE ($000'S)/1000


Although summerfruit has become less important for all lifestages (other than mixed families), spend on prepacked summerfruit

increased this summer increasing share of fruit repertoire.


Summerfruit buyers have spent a greater proportion of their fruit spend on bananas and berries this summer. All lifestages except mixed families have spent more $ on bananas this summer, growing share of fruit repertoire. Does mixed family loyalty to summerfruit indicate a preference when in season? Berries gaining share predominantly from adult households.

What else are my brand buyers purchasing?STONE FRUIT BUYERS - NEW ZEALAND - MAT TO 25/04/2010 - BASED ON VALUE ($000'S) - SHARE BASED ON TOTAL FRUIT



Progressive is the only retailer with positive growth in summerfruit for the summer period. Summerfruit Performance - Value % Change vs YA

26 week data to 25 April 2010

-8.5%

-15.5%

-7.3%

-20.6%

17.1%

-12.9%

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

NEW ZEALAND

NZ TOTAL FOODSTUFFS

NZ NEW WORLD

NZ PAK N SAVE/WP


NZ OTHER

Are summerfruit shoppers buying

differently in Progressive?


Progressive has the lowest spend per occasion and purchase frequency with a strong increase in households driving the retailer growth. Progressives new shoppers are shopping more frequently as all other outlets have had fewer purchases of summerfruit this summer. Spend per occasion is down across the board, suggesting lower fruit prices this year.



MAT TO 19/04/2009MAT TO 25/04/2010HALF YEAR TO 26/04/2009HALF YEAR TO 25/10/2009HALF YEAR TO 25/04/2010QTR TO 26/07/2009QTR TO 25/10/2009QTR TO 24/01/2010QTR TO 25/04/2010

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Foodstuffs undertrades in summerfruit due to New World share of loose fruit as does Progressive. Supermarkets overtrade in prepacked summerfruit due to non supermarkets predominance of loose fruit. Is there an opportunity to drive growth of prepacked with independent outlets?

Retailer Value Share of Trade - 26 weeks to 25 April 2010

40.0%

16.8%

23.2%

23.7%

36.4%

38.9%

16.3%

22.6%

22.0%

39.1%

53.0%

22.3%

30.6%

42.9%

4.1%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

NZ TOTAL FOODSTUFFS

NZ NEW WORLD

NZ PAK N SAVE/WP


NZ OTHER

Stone Fruit Loose Barcode

Estimated Fair Shares

42.3%

20.6%

21.8%

32.1%

25.5%


Summerfruit summary

• Summerfruit maintains #2 ranking for summer despite value declines– $ decline of 8.5% over summer (vs. -2% for total fruit) and down 1.1%

category share– Increase in buyer base but less frequent purchases of summerfruit

• Loose summerfruit drives decline (down 10.2% vs. YA) with 70 cents less spent each purchase occasion – Adult households, young families and older families driving the decline

• Prepacked summerfruit grows at 17%, (up 2% of summerfruit) with an increase of 90 cents each purchase occasion– Majority of lifestages are less engaged with summerfruit overall but

increased $ spend on prepacked formats• Mixed families increase loyalty to summerfruit, increasing spend on

loose fruit• Bananas and berries gaining share of summerfruit buyers fruit

repertoire• Progressive performing ahead of the market with more summerfruit

buyers and more frequent shopping


How does this compare to other fruits?


Considerable decline across the fruit category, with summerfruit and apples the key drivers. Loose & prepacked formats are driving the category decline, with only barcoded summerfruit and citrus growing vs. last summer. Pears, citrus and melons decline vs. last summer although MAT performance is positive.

86.6%

Summer

$ share of category23.0%

15.8%

15.0%

10.4%

10.4%

7.5%

5.7%

4.0%

3.4%

3.0%

Fruit Category Performance - Value % Change vs YA26 week period to 25 April 2010

2.3%

-8.5%

-9.4%

10.9%

-2.4%

-1.0%

-2.1%

-1.6%

-3.9%

-7.6%

15.1%

-15% -10% -5% 0% 5% 10% 15% 20%

TOTAL FRUIT BANANAS (TP)

TOTAL FRUIT STONE FRUIT(TP)

TOTAL FRUIT APPLES (TP)

TOTAL FRUIT BERRIES (TP)

TOTAL FRUIT CITRUS (TP)

TOTAL FRUIT OTHER FRUIT(TP)

TOTAL FRUIT GRAPES (TP)

TOTAL FRUIT PEARS (TP)

TOTAL FRUIT MELONS (TP)

TOTAL FRUIT AVOCADO (TP)

TOTAL FRUIT TROPICALS (TP)

TOTAL FRUIT PREPARED FRUIT(TP)

Summerfruit retains #2 ranked fruit for summer (MAT#4)


Average spend on summerfruit, apples and citrus is below last years levels. Bananas and berries have maintained higher spend per buyer throughout this summer. Summerfruit only managed #3 ranked average fruit spend per buyer this summer.


#3

#1


Berries achieved higher penetration levels this summer. Summerfruit holds #2 penetration ranking ahead of apples in January and February. Number of hhlds buying bananas are consistently above other fruits year round.


#2


Spend per occasion down for apples, summerfruit and citrus this summer. Berries and bananas purchase values trending upwards.



Summary

•Decline across many fruit types this summer vs. YA– Apples and summerfruit are key drivers of negative fruit

performance– Spend per occasion down this year for apples, citrus and

summerfruit

• Berries and bananas perform this summer– Average spend per household increasing– Highest hhld penetration reached for fruit types by berries in

December peak

• Seasonality less of an impact on other fruits as purchase frequency more stable over summer


Have prepacked summerfruit sales been successful?


What do we know about prepacked summerfruit already?

• Value growth ahead of the category this summer vs. YA– +17.8% versus category decline of 2%

•Gaining $ share of summerfruit sales and total fruit sales– Accounts for 7.8% of all summerfruit sales, +1.8% vs. last

summer– Gained 0.2% of total fruit sales this summer

•Captured increased spend from lifestages less engaged with summerfruit this summer– Increased spend from all lifestages except mixed families

What else do we need to know to assess success?


The prepacked summerfruit season is short in comparison to loose summerfruit.More early season buyers this year, but drop off this year in January. Unlike loose summerfruit, spend per occasion is higher than a year ago which has driven value sales,

What is driving how much my consumers buy over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) BARCODE



Prepacked summerfruit accounts for 8% of summerfruit sales


Prepacked apricots, cherries and plums reached higher penetration levels this summer but only for one period. Apricots challenged the penetration highs of cherries and peaches while nectarines never reached the buyer numbers of last year.


On the whole, loyalty to prepacked summerfruit remained consistent this summer.

How is loyalty changing over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) BARCODE - BASED ON VALUE ($000'S)/1000


Summerfruit Season (09-10)Summerfruit Season (08-09)

Although few sales in prepacked summerfruit in April last year, the avg. spend was high as a proportion of avg. spend on total fruit & vegetables which

drops at end of summer.


Prepacked summerfruit has successfully retained shoppers who are less engaged with summerfruit overall this summer. There are fewer young and mixed families buying prepacked summerfruit this summer. Does the ‘stone’ make it less appealing for households with young children?

Which groups are driving my growth/decline? (Lifestage)NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) BARCODE - HALF YEAR TO 25/04/2010 - BASED ON VALUE ($000'S)/1000



Prepacked summerfruit summary

• Value growth ahead of the category this summer vs. YA– +17.8% versus category decline of 2%

• Gaining $ share of summerfruit sales and total fruit sales– Accounts for 7.8% of all summerfruit sales, +1.8% vs. last summer– Gained 0.2% of total fruit sales this summer

• Captured increased spend from lifestages less engaged with summerfruit this summer– Increased spend from all lifestages except mixed families

• Short prepacked season affects buyer reach– Apricots, cherries and plums exceeded penetration levels of last summer

but only for one period – Apricot penetration levels challenged highs of cherries and peaches– Repeat of last summers nectarine buyer peak never happened. Why?

• Loyalty to prepacked summerfruit has remained stable this year• Fewer young and mixed families buying this year– Is summerfruit less appealing for households with young children vs.

other fruit types?


Did the negative press in the Dominion (Lower NI newspaper) on 30 January impact peach sales?


HHld penetration increased in February in Lower North Island with peak penetration exceeding last summers levels.

What is driving how much my consumers buy over time?ALL SHOPPERS - LOWER NORTH ISLAND - TOTAL STONE FRUIT (TP)



Negative press on peach sales in Dominion 30

January


There is no apparent effect on prepacked summerfruit sales following January article.


What impact have early summerfruit season pickings (pre November) had on the category?


Early season hhold penetration is certainly lower this year than last, but average spend was higher until November.

How are the key consumer drivers of sales changing over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - BASED ON VALUE ($000'S)/1000


Is the lower penetration levels due to poor fruit quality or higher prices?


Pre-season summerfruit loyalty was ahead of last year due to a drop in total fruit purchases preseason in 2009. Category sales recovered in the October month but summerfruit never recovered their share of sales versus last year.

How is loyalty changing over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - BASED ON VALUE ($000'S)/1000

Source : ACNielsen Homescan NZWas the lower loyalty to summerfruit this season due to poor quality early season produce?


There has been a steady growth in the no. of HHs making repeat purchase in the first half of the season.

New Product Launch - STONE FRUITHow many households have purchased?

24 weeks to 12 Apr '10

Source: Nielsen | Homescan ® (New Zealand) - Issue # 162213


What impact have early summerfruit season pickings (pre November) had on the category?

• What do we know?– Early season household penetration is below last summers levels

– But higher prices could have been driver– summerfruit loyalty took a dive below last summers levels in October and

never recovered– Repeat purchase rates post November have been steady

• Are these results due to customer disatisfaction with early season produce?

• What else do we need to consider?– Impact & quality of imported summerfruit vs. NZ fruit– Other factors that changed market dynamics in October– Pricing of summerfruit this summer vs last summer

– Negative impact on summerfruit value share of category


Did the overlap in regions fruit crops in January effect demand in 2010?


More hhlds bought this qtr in LNI & SI, shopping more often for summerfruit but spending less on each occasion.



MAT TO 19/04/2009MAT TO 25/04/2010HALF

YEAR TO HALF YEAR TO HALF YEAR TO QTR TO 20/04/2008QTR TO 20/07/2008QTR TO 26/10/2008QTR TO 25/01/2009

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On the whole hhld penetration was higher post January than last year but average spend was considerably lower.

How are the key consumer drivers of sales changing over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - BASED ON VALUE ($000'S)/1000



Spend per occasion did drop immediately following December month this summer and did not stabilise until March. Did the excess supply of fruit cause the drop in average spend due to decreased fruit pricing?

What is driving how much my consumers buy over time?ALL SHOPPERS - NEW ZEALAND - TOTAL FRUIT STONE FRUIT (TP) - BASED ON VALUE ($000'S)/1000


Confidential & Proprietary Copyright © 2010 The Nielsen Company Summerfruit NZ Industry Review.

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Transcript of Confidential & Proprietary Copyright © 2010 The Nielsen Company Summerfruit NZ Industry Review.