James Russo – SVP Global Consumer Insights March 2014

THE CONNECTED CONSUMER

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THE WORLD IS CHANGING

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$17 BILL

Source: Nielsen RMS Global FMCG Dollar Sales 2012

IMMENSE OPPORTUNITIES ACROSS THE AMERICAS

$633 BILL

$83 BILL

$1 TRILLION IN FMCG SALES

$38.2 BILL

$122 BILL

$35 BILL $15 BILL

$4 BILL

$2,400

$693

$881

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ONLINE

WORLD 34% NORTH AMERICA 79% LATIN AMERICA 43% MEXICO 37%

UNIFYING MEGA TREND

ACCESS

2012 1 BILLION

2014 1.75 BILLION

2.6 BILLION PEOPLE

Source: internetworldstats.com

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INFLUENCE

INFLUENCIAL MEGA TREND

68% GLOBAL CONSUMERS TRUST COMMENTS POSTED ONLINE

66% MEXICAN CONSUMERS TRUST COMMENTS POSTED ONLINE

5.1 BILLION PEOPLE

Source: Nielsen Global Survey – Trust in Advertising

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CONNECTED CONSUMERS ARE GLOBAL AND LOCAL

Nielsen Global Survey 4Q ,13

CONCERNS VALUES

BEHAVIOR

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TOP CONSUMER CONCERNS

Source: Nielsen Global Surveys. 2011 Q4 / 2013 Q4.

NORTH AMERICA 1) Economy 2) Jobs

3) Debt 4) Health 5) Food Prices

LATIN AMERICA 1) Jobs 2) Economy

3) Crime 4) Health 5) Work/Life Balance

MEXICO 1) Jobs 2) Economy

3) Crime 4) Debt 5) Health

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8 July 2013 – New Wealth, New World: Nielsen report – percept who strongly or somewhat agree

QUALITY TIME WITH FAMILY IS MOST IMPORTANT

HIGHER EDUCATION IS IMPORTANT

FAMILY PLANNING IS IMPORTANT

WOMEN SHOULD HAVE INFLUENCE ON IMPORTANT HH ISSUES

TRADITIONAL VALUES ARE VERY IMPORTANT

MOST IMPORTANT ROLE FOR WOMEN IS WIFE/MOTHER

RELIGION IS IMPORTANT GUIDING SOURCE

88%

91%

89%

85%

69%

34%

34%

LA

76%

77%

70%

78%

69%

31%

39%

NA

91%

92%

91%

86%

74%

36%

28%

MEXICO

OUR VALUES ARE SIMILAR

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OUR MINDSETS ARE AS WELL

SHOPPING BASICS 51% 56% 45% 1

LIVING COMFORTABLY 40% 35% 43% 2

SPENDING FREELY 9% 9% 13% 3

NA LA MEXICO

Nielsen Global Survey 1Q13 – Mindset over the middle class

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WHO IS LIVING COMFORTABLY?

Source: Nielsen Global Consumer Confidence & Opinion Survey 4Q13

50% - 60%40% - 50%30% - 40%20% - 30%

GLOBALLY, 42% OF CONSUMERS SAY THEY ARE LIVING COMFORTABLY

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DESPITE ONGOING ECONOMIC CONCERNS

GLOBALLY, 57% OF CONSUMERS SAY THEY ARE IN A RECESSION

Source: Nielsen Global Consumer Confidence & Opinion Survey 4Q13

0-25%25%-50%50%-75%75%-100%

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WHERE DOES THIS LEAVE RETAIL SALES?

UNIT SALES + 0.4% 0%

ALCOHOLIC BEVERAGES + 7% + 3%

GENERAL MERCHANDISE - 4% - 4%

MEXICO UNITED STATES

Source: Nielsen ScanTrack, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 11/23/2013 (vs. year ago), UPC-coded Source: Meat, Deli, Produce - Nielsen Perishables Group FreshFacts® - Fresh Coverage Area, 52 weeks ending 11/30/13., UPC and Non-UPC Source: Nielsen ScanTrack. T Mexico Selfservices.. FY 2013 vs FY 2012

How do we reach the connected consumer in these challenging times?

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Faster, Fresher, Better 1

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CONSUMERS PAYING MORE FOR LESS TIME SPENT

Source: Nielsen ScanTrack, Total U.S. All Outlets Combined (plus Convenience), 13 weeks increments (average unit price percent change vs. year ago), UPC-coded Nielsen Perishables Group FreshFacts® U.S. Fresh Coverage Area (units)

Faster Fresher

shoppers who claim to purchase a CPG product online in past 12 month

Better

LATAM 42% U.S. 40% MEXICO 24%

Eating more natural, fresh foods

MEXICO 65% LATAM 63% U.S. 49%

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Wellness Required 2

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GROW IT OR BUY IT: CAPITALIZE ON AN UNSATURATED MARKET Don’t be caught with a health and wellness void

Source: Nielsen Global Survey (4Q13) ; Nielsen Annual Ailment Survey 2013 Source: Global On line Survey 2011

The No. 1 global consumer concern after the economy is HEALTH.

60% of Mexicans were

engaged in some form of weight

management in 2013

52% of Latin Americas were engaged in

some form of weight management

in 2013

38% of Americans were

engaged in some form of weight

management in 2013

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What’s In It For Me? 3

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BUILD A REASON AND THEY WILL BUY

Socially responsible

Niche products

Customization

Consumers who said they’d be willing to spend more on products and services from socially responsible companies:

LATAM 2011: 49% 2013: 55% MEXICO 2011: 55% 2013: 54% US 2011: 36% 2013: 44%

Source: Nielsen Global Survey Corporate Social Responsibility 2011 & 2013

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The Great(er) Divide 4

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AFFORD THE BASICS

LIVING COMFORTABLY/ SPENDING FREELY

49% 51%

RESULTING IN POLARIZED CONSUMERS

Source: Nielsen Mindset over Middle Class Thought Leadership

xx% 44%

53%

56%

47%

NORTH AMERICA

LATIN AMERICA

MEXICO

What’s “Basic”? Lower income consumers exhibit a huge appetite for media, logging almost 25 more hours than higher income consumers

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“We” Mentality 5

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ATTRIBUTES OF TWO SPENDING POWERHOUSES

Hardwired Untethered

By Appointment Always On

Listeners Sharers

Physical Virtual

BOOMERS MILLENNIALS

Distinct Segments – Distinct Marketing

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Shopping Less, Engaging More 6

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annual shopping

trips

FIND YOUR BEST OUTLET TO BE SEEN AND HEARD

Source: Nielsen Consumer Panel, Nielsen IBOPE Mexico.

158 annual shopping

trips

U.S. 2008-2009

2013

1 billion+ log in each month

231 million log in each month

31% own a tablet (+486% in 2 yrs)

11% own a tablet in Mexico

67% own a smartphone (+49% in 2 yrs)

63% own a smartphone in Mexico

381 annual shopping

trips

MEXICO 2010

141 382 annual shopping

trips

2013

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More Choices, More Chances To Get Lost 7

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KEEPING UP WITH CONSUMERS Buy, adjust and measure across media platforms

Source: (ANA/Nielsen Multi-screen Survey, 8/20/13

Thinking of today and 3 years from now, indicate the importance of integrated multi-screen campaigns in effectively delivering a marketing message

Somewhat Important Very Important

2013

2016

55%

12%

38%

85%

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TOP 3 PREFERRED SOURCES

TV IN-STORE

FRIENDS/FAMILY

IN-STORE TV

INTERNET/ FRIENDS/FAMILY

REALIZE THAT TRADITIONAL MEDIA PLAYS A CRITICAL GLOBAL ROLE IN REACH

Source: Nielsen

NORTH AMERICA

LATIN AMERICA

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MUST RESONATE WITH CREATIVES ALIGNED WITH CONSUMER NEEDS

Everyone likes:

humor

relatability

Followed by:

family health value

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Less Loyalty But More Opportunity

8

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GAIN A GREATER SHARE OF THE FRAGMENTED WALLET

Source: Nielsen Homescan, top 10 banners based on CPG sales for 52 w/e 9/28/13

The Opportunity

Average Loyalty

22% 78% OU

TLET

BR

AND

The Opportunity

29% 71%

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AFFORD THE BASICS:

45%

LIVING COMFORTABLY/ SPENDING FREELY:

55%

PRICE

CONVENIENCE. TASTE

HEALTH QUALITY SAFETY

FUNCTIONAL PRICE

ASPIRATION CORE VALUES

SUSTAINABILITY

VALUE

LOYALTY LOYALTY

ENCOURAGES SWITCHING

BY DIFFERENTIATING ON SUSTAINABLE FACTORS

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33 Source: Global Survey – somewhat or strongly agree

81%

81% of Mexican consumers say QUALITY is the most important factor in a purchase

78%

78% of Global consumers say QUALITY is the most important factor in a purchase

KEY DRIVER OF PURCHASE DECISION AND LOYALTY

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Innovation 2.0 9

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TRADITIONAL SUCCESS METRICS UNDER SCRUTINY

Launching New Products • Capture demand earlier

• Persevere with conviction

• Cultivate support

Source: Nielsen Breakthrough Innovation Report

Reinventing Mature Products • Reinventing the best selling vehicle in

North America for the past 32 years • Infotainment and user interfaces

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NEW WAYS TO MEASURE WHAT MATTERS Advances in neuroscience generate new insights to improve advertising impact

Understand the moments an ad activates memory and draws attention

Source: Nielsen Neuro

0

5

10

0 5 10 15 20 25 30

EFFE

CTIV

ENES

S

Identifying the beneficiaries was

highly engaging and activated empathy

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Make A Big Impact With Minimal Content 10

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Number of 15-second television commercials jumped more than 80% between 2008 and 2012

Oreo's Super Bowl Tweet: 'You Can Still Dunk In The Dark'

LESS CAN BE MORE, MUCH MORE

15 seconds

7 words

Source: Nielsen Neuro, Ad Age

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WHERE WE STARTED

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DRIVING OUTCOMES IS ABOUT AN INCREASINGLY UNCOMMON SENSE OF THE CONNECTED CONSUMER

James Russo – SVP Global Consumer Insights March 2014

THANK YOU