Pulse Report - Frozen Food - Q2 2011

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Frozen Food

SymphonyIRI

Welcome to the Pulse Q2 2011 edition for FrozenFood. We hope you find it useful. Please do not

hesitate to contact us if you have any questions or

comments at [email protected]

Pulse


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Frozen Food SymphonyIRI Pulse Q2 2011

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About the Report

This Frozen Food report is one of 10 super category reports designed toshow high-level comparison and analysis for retail markets across major

countries in Europe.

This report contains data gathered from around Europe. This market wassplit into the following categories: Frozen Vegetables, Frozen PotatoProducts, Ice Cream, Frozen Desserts, Frozen Meat, Frozen Fish, FrozenReady Meals and Frozen Dough & Bread Products.

The report highlights key metrics such as total sales figures, market trends,category shares, winners and losers for Europe and for individual countries.

The data has been sourced from SymphonyIRI Group retail databases andEurostat the statistical branch of administration for the EuropeanCommission.

The countries included in the report are: France, Germany, Italy,Netherlands, Spain and the UK.

The market channels used for each country in this report are as follows:

For analytical purposes the data sourced from available retail databaseshas been consolidated to provide consistent results. However, for somecountries it has not been possible to source data pertaining to certain

categories. When this has occurred it has been documented in the Notessection found at the end of the report.

Country Channels used

UKHypermarkets, Supermarkets, Drugstores and

Impulse Outlets

ESHypermarkets, Supermarkets, Hard Discounters,

Drugstores and includes the Canary Islands

DEHypermarkets, Supermarkets, Hard Discountersand Drugstores

NL Hypermarkets, Supermarkets, Hard Discountersand Drugstores

ITHypermarkets, Supermarkets, Small Self Service,Hard Discounters and Drugstores

FRHypermarkets and Supermarkets


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In the Radar

Economic figures influencing consumer behavior

Despite a context of general price rising andlow consumer confidence across Europe,

frozen food has experienced good growth inH1, due to a return to in-home cooking and

good ice cream sales pre-season.

Stephane AllainDirector, Client Services, SymphonyIRI Group France

Contact: +33 (0)1 30 06 22 34 / [email protected]

Source Eurostats, September 2011

Population in Mil lions Unemployment (%)

Average 12 MonthsInflation Rate GDP in Millions ()

January2010

January2011

Average2010

Dec.2011

Average2010

Dec.2011 2010

2011(Estimate)

France 64.7 64.7 9.8 9.9 +1.7 +2.0 1,932,801 2,001,557

Germany 81.8 81.8 7.1 6.1 +1.2 +2.0 2,476,800 2,566,095

Italy 60.3 60.3 8.4 8.0 +1.6 +2.3 1,548,816 1,588,893

Netherlands 16.6 16.6 4.5 4.3 +0.9 +1.9 591,477 614,324

Spain 46.0 46.0 20.1 21.2 +2.0 +2.9 1,062,591 1,081,894

UnitedKingdom 62.0 62.0 7.8 7.8 +3.3 +3.9 1,696,583 1,721,104


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Global Trends

Positive Trend

Static Trend

Negative Trend+4.7%

+3.6%

+0.1%

-0.2%

TOTAL EUROPE +2.4%

Value Sales in Millions ()

Total EU 22,177

DE 7,693

UK 4,391*

FR 3,519

IT 3,286

ES 2,226

NL 1,062

1,032 1,166 1,109 1,069 1,023 1,190

448547 643 523 468

592247292 265

251 250

296726

879 928

713 739

907

1,891

1,947 1,866

1,923 1,875

2,029

782

885919

785

930

880

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

04-Apr-10 04-Jul-10 03-Oct-10 02-Jan-11 03-Apr-11 03-Jul-11

Millions

Period Ending

FRANCE

GERMANY

ITALY

NETHERLANDS

SPAIN

UNITEDKINGDOM

*based on an exchange rate of1.166 to the pound

Source: SymphonyIRI Retail Databases; Period Ending 03 Jul, 11

Value sales and growth and decline in the last year

Value sales for the last six quarters

+1.5%

+3.6%


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6,481

2,256

1,906

4,831

3,775

4.6

2.2 3.0

0.1

2.8

Frozen

Ready

Meals

Ice Cream Frozen Fish Frozen

Vegetables

Frozen

Meat

Millions

Total Sales % vs. YA

Top 5 Categories Evolution

29.2%

21.8%

17.0%

10.2%

8.6%

7.2%4.2%1.8%

Frozen Ready Meals Ice CreamFrozen Fish Frozen VegetablesFrozen Meat Frozen Potato ProductsFrozen Desserts Frozen Dough & Bread Products

Europe

Value Sales () and % Change vs. Yr Ago

6,481

1,591

941

396

4,831

3,775

2,2561,906

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom

MillionsEuros

Category Value Sales and Share of Value in the Last Year

Key trends

Overall in Europe, the Frozenmacro-category experienced acontinuous growth in value by+2,4% experiencing a sharp rise

in Spain, Germany and France,but UK slightly decline. The

Netherlands remains flat and Italyexperienced slightly positivegrowth.

Germany and UK still account for54% of the value share.The German consumption ratesare the highest in the market with

an average annual expenditureper capita of92, followed by UK72, the Netherlands, France

Italy, and Spain .

In term of evolution, the top 3categories increase theirdominance: ready meals, Ice

cream and frozen fish.



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Europe

Top 5 Losers: Value Saleschg vs. Yr Ago ()

Top 5 Winners: Value Saleschg vs. Yr Ago ()

139.4

130.3

108.8

83.4

39.6

0 50 100 150

Frozen Ready

Meals

Ice Cream

Frozen Fish

Frozen Meat

Frozen Potato

Products

Millions

-4.6

-5 -4 -3 -2 -1 0

Frozen Dough &

Bread Products

Millions

Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom

Category Insights

The top 5 winning categories have a combined growth of 500 millions vs Yearago.

Frozen ready meals is the highest growth category, because of the impact of theglobal financial crisis at a European level has seen people returning to staying athome and preparing meals in the home, with a growth on convenience meals andhome cooking. This category is mainly driven by snacks (pizza and hamburger, for

example)

Frozen meat and fish are increasing but mostly thanks to the price increase of rawmateriel

Ice cream sales have seen a situation reversal, thanks to a good pre-seasonsemester linked to weather.

The only category which is going down is frozen dough and bread, but withoutseriously penalizing the total frozen food



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970

372 367

779

661

-2.5

1.4

4.4 4.3

7.0

Frozen

Ready

Meals


Meat

Frozen

Vegetables

Millions


27.6%

22.1%

18.8%

10.6%

10.4%

8.5%

1.8%

0.2%

Frozen Ready Meals Ice CreamFrozen Fish Frozen MeatFrozen Vegetables Frozen Potato ProductsFrozen Desserts Frozen Dough & Bread Products

France


970

779

661

372 367300

638

0

200

400

600

800

1,000

1,200


MillionsEuros


Key trends

The frozen universe is growing muchfaster than total FMCG at 3.6% vs 2.5% ontotal FMCG

This growth has been driven by icecreams which are rocketing on 1stsemester (March/April/May) due to unusual

weather temperatures. We can also notethat we positive trend on main frozen

categories (except frozen vegetables)mainly supported by consumption (+1.2%in volume).

Inflation rate, is low on 1st semesterexcept on fish.

In term of brand, private label are stilldeclining to national brands profit.



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France



50.9

27.8

15.4

13.0

10.6

0 10 20 30 40 50 60

Ice Cream

Frozen Fish

Frozen Meat

Frozen Ready

Meals

Frozen Potato

Products

Millions

-9.6

-12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0

Frozen Vegetables

Millions

Category Insights

Ice Cream : a very dynamic on the beginning of the season, supported by a very goodweather. Ice Creams are driven by bulk segment and also cones, where demand is good

thanks also to high promotion level and numerous innovations. Private label are decliningmarket share to national brand profit. Unilever the leader, followed by Nestl the challenger,

and also Haagen Daasz are were dynamic thanks to innovation and advertising support.

On salt frozen categories, frozen fish are still taking off but only in value, mainly driven byinflation (both on fish and shell fish), as it is flat in unit growth.

Frozen Meals : correct result for Pizza (+2% in value) driven by Dr Oetker & Nestl(Buitoni), although private label are declining. Snacking are growing at +2,6% such as

Frozen ready meals are also recovering a positive trend (+1,9%), after years of difficulties,driven by Marie and Findus in contribution.

Frozen meat: gained in offer and also increasing due to consumption transfer from fresh tofrozen meals due to price attraction.

Frozen Vegetables : there is a break in trend, since the beginning of 2011, where thiscategory is very bad oriented (-2,5% in value and also in volume -2,5%) mainly driven by

weak demand, although all driver such as promotion and offer are stable

At the opposite potatoes categories are positive since the beginning of the year both invalue (+5,7%) and in volume (+4,7%)

In terms of vendor on salted frozen food: All main national competitors are increasing theirvalue Nestl (+8%), Findus(+6%), McCain (+3%), Dr Oetker (+17%), which has for result adrop of market share of private label



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Germany


37.9%

15.6%

15.3%

8.8%

7.5%

7.1%4.9%2.9%

Frozen Ready Meals Frozen MeatIce Cream Frozen FishFrozen Desserts Frozen VegetablesFrozen Potato Products Frozen Dough & Bread Products

2,912

674548

1,200 1,180

574 379226

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2,912

1,200 1,180

574674

2.4 6.43.22.76.5

Frozen

Ready

Meals

Frozen

Meat


Desserts

Millions



MillionsEuros


Key trends

Frozen desserts are strongly growingdue to price-aggressive one-off harddiscounter promotions.

The good development of frozen meatis price-driven because of higherconsumer prices for poultry products

reflecting the higher raw material cost.

Frozen ready meals show a small growth,the biggest category frozen pizza isgrowing slightly stronger than the otherready meals categories because of

increased promotion shares.



10/2010


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Germany



-9.7

-12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0

Frozen Dough &

Bread Products

Millions

77.7

72.7

34.5

28.0

22.7

0 20 40 60 80 100

Frozen Ready

Meals

Frozen Meat

Frozen

Desserts

Ice Cream

Frozen Potato

Products

Millions

Category Insights

For ice cream, a warmer spring has brought about a value growth of 6.6% in Q2which however did not bring a positive development to the total MAT. Although thespring was warmer, promotion activities did not increase in this period.

The highest price increases for frozen poultry took place for private label products.However, these price increases did not affect volume sales for private labels whichwere also up at 7.0%.

The category with the strongest price per kg increase are frozen potato productswith a 10,4% price increase vs. year ago.

Frozen vegetables have benefitted from the EHEC disease crisis caused by freshsalads/vegetables in Germany in Q2/2011 but a very positive effect on total MAT

can still not be seen.

Promotions accounted for 10.7% of the value sales of the frozen food categoriesand the share of promoted sales did not change vs. year ago although promotionactivities decreased for all food categories vs. last year because of the stableeconomic climate in Germany.



11/2011


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Italy

30.4%

23.2%

19.9%

18.2%

3.8%1.0%

0.9%

2.8%

Ice Cream Frozen FishFrozen Vegetables Frozen Ready MealsFrozen Potato Products Frozen MeatFrozen Dough & Bread Products Frozen Desserts

998

761

653598

12691

31 280

200

400

600

800

1000

1200



998

761

653598

1261.21.1 2.3 0.4 1.8


Vegetables

Frozen

Ready

Meals

Frozen

Potato

Products

M

illions


MillionsEuros



Key trends

All categories are growing both onYE and YTD, except Frozen

vegetables rather stable

Ice Cream slowed down in june aftera great growth due to an anticipated

good season

Ready Meals still growing but Pizzareduced its growth in 2011

Frozen Fish is the most positive,accelerating growth till +3,5 in YTD

Private Labels confirmed as the bestperformer on market share : their

quality/price ratio is more and more

appealing for consumers weakened

by economic downturn


12/2012


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Italy



17.2

10.8

6.9

4.2

2.8

0 5 10 15 20

Frozen Fish

Ice Cream

Frozen Ready

Meals

Frozen

Desserts

Frozen

Vegetables

Millions

0.0 0.0 0.0 0.0 0.0 0.0 0.0

Millions


Insights and recommendations

Ice Cream : a warmer spring led the growth on YTD 2011 ; Multipacks have drivenoverall market increases thanks to a richer offer on POS (65 skus on avg, +4 vs ya) ;

growth also supported by stable prices , in countertrend with FMCG inflation rate raised

to +2% in June; Big Brands are consolidating share vs. unbranded ; Private Labels arethe best performing thanks to larger assortments, higher promotions, increased sales

index

Frozen Meals : Pizza has helped to consolidate the growth in 2011 and keeps theoverall market in positive ; Other Meals are experiencing very negative growth in 2011(-4,6%) as Retailers are shrinking assortments on Brands and the leader Findus (BEIG)

stopped ADV investments ; only Private Labels continue to grow enlarging distributionand increasing promotions

Frozen Fish : Fish sees a positive growth trend led by Natural Fillets, and Fish Fingers(rate of growth around +7% in 2011) ; Recipe fish and preparations for first meals are

the only declining segments : consumers are more likely to renounce added valueproducts because of high prices ; The competitive arena is very fragmented but leader

Findus and Private Labels are increasing their shares

Frozen Vegetables : market stable but the main segment (peas = 24%) is decreasingboth on YE and YTD by 3% ; mixed-veg and herbs are very dynamic ( over +30% and+6% respectevely on YTD) : offering on mixed veg is enlarging on POS as

manufacturers are opening a new season of innovation ;; Leader Findus facingdistribution troubles : share is decreasing and main competitors ( Orogel / Private

Lables) are taking advantages


13/2013


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Netherlands

39.3%

21.0%

14.1%

9.7%

6.8%

3.1%1.0%

5.1%

Frozen Ready Meals Ice CreamFrozen Fish Frozen Potato ProductsFrozen Vegetables Frozen MeatFrozen Desserts Frozen Dough & Bread Products

417

223

150

103

7254

3310

0

50

100

150

200

250

300

350

400

450



417

223

103

72

150

-3.6-0.50.7

3.65.7

Frozen

Ready

Meals


Potato

Products

Frozen

Vegetables

Millions


MillionsEuros


Key trends

Despite a bad summer and a strongdecline of ice cream sales becauseof that, Total Frozen Food is stillshowing a modest growth in the

Netherlands.

However, frozen foods is still losingshare within the total supermarketturnover, as the growth is lower then

the total market growth.

Frozen Meat Snacks and FrozenPizzas are the biggest contributors

(in absolute figures) to the growth.But also frozen vegetables is

showing strong growth figures. Thestrong rise in prices of freshvegetables, probably influencing the

last.



14/2014


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Netherlands



-0.5

-4.8

-8.2

-5.8

-9.0 -8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0

Frozen Potato

Products

Frozen Meat

Frozen Desserts

Ice Cream

Millions

14.3

3.9

1.1

0.7

0 5 10 15 20

Frozen Ready

Meals

Frozen

Vegetables

Frozen Fish

Frozen Dough &

Bread Products

Millions

Category Insights

Frozen Ready Meals consists out of 3 groups: Ready to Eat meals (including pizza), MeatSnacks and Savoury Snacks. Savoury snacks (the smallest group) is stable. Ready Meals

is showing a 3% growth again (value and volume), mainly thanks to innovations of Dr.

Oetker (Stone oven pizza) and Wagner (Sensazione). Frozen Meat Snacks shows thestrongest growth (6% in value, 4% in volume). The main driver behind this growth are

innovations (small meat balls, chicken in sauce, new burgers) & relaunches combined with

price increases (hamburgers and sat)of the leading brand: Mora.

As mentioned earlier is frozen vegetables probably profiting from the strong price increaseof fresh vegetables. All the major brands in this segment (Bonduelle, Iglo and Private

Label) show growth in value and volume. Bonduelle is successful with the new premiumBonduelle Pure concept. Next to that also frozen fruits (a relatively new segment in the

Netherlands) is still growing strong.

In frozen fish, the sales of shellfish and fish sticks (aimed at kids) are growing strongly,while prepared fish products are declining strongly. This results in a total growth of frozenfish of 1,1% in value and 0,6% in volume.

The loss of value sales for Frozen potato products is mainly due to price decreases. Involume the category is fairly stable, although the brand Aviko does well with the

introduction of their extra crunchy range.

Frozen desserts is an very small segment in the Netherlands. Only around Easter andChristmas there are some offerings in this segment.

The strong loss of ice cream is evidently due to the extremely bad summer of 2010,effecting all segments and all brands.



15/2015


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Spain

33.1%

26.6%

23.2%

8.1%5.4%0.5%

0.1%

3.0%

Frozen Fish Ice CreamFrozen Ready Meals Frozen VegetablesFrozen Dough & Bread Products Frozen Potato ProductsFrozen Desserts Frozen Meat

737

591

517

180

12166

11 30

100

200

300

400

500

600

700

800



737

591

517

180

1210.9

7.74.5

2.7 1.9

Frozen Fish Ice Cream Frozen

Ready

Meals

Frozen

Vegetables

Frozen

Dough &

Bread

Products

Millions


MillionsEuros


Key trends

Frozen categories withcontinuous growth +4,7% versusFMCG trends (+0.7%). The main

drive comes by Fish, Pizzas andSeefood.

The Private Label with trend+7,5% and get to 53,5 valuemarket share (+1,4pts)

To point the new opening storesin Hyper and super is only 83stores.

From June, Frudesa (Bonduellefrozen division) belong to Findus

Group



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Spain



52.9

22.2

15.5

5.4

3.3

0 10 20 30 40 50 60

Frozen Fish

Frozen Ready

Meals

Ice Cream

Frozen Potato

Products

Frozen

Vegetables

Millions

-0.2

-0.5

-0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.0

Frozen Desserts

Frozen Meat

Millions


Category Insights

Nestle on the top of the manufacturer, with 7,8 pts of market share, and -2,5%value trend. However, the following manufacturers obtain positive sales evolution:Pescanova (+5,2%), Unilever (+6,4%), Oetker (10,6%). This four manufacturer addup the half of the rest of share.

The new Findus Group (Findus+Frudesa) will changed the assortment and the mixof Vegetables and Ready to Eat categories; turn to a brand leader in manysegments.

The average of volume price has suffer a fall of (-2,2%). Mainly all the categoriesfall their prices. This price evolution dont come directly for promotional, reducedthe promotional pressure to 15,8% (-2,3ptos than year ago)

For Pizzas Category is the consecutive year with emphasize trends; due to Nestleand Oetker. Both vendors set more than 65 pts of share. And unusual growth,

Nestle +4,2% and Oetker +10,6% in value evolution


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United Kingdom

24.3%

24.1%

18.1%

14.1%

5.3%4.2%

9.9%

Frozen Ready Meals Ice CreamFrozen Fish Frozen Potato ProductsFrozen Vegetables Frozen DessertsFrozen Meat

186

1,0671,060

793

618

435

232

0

200

400

600

800

1000

1200



1,060

793

618

435

1,067

-0.1

3.2

-1.4-3.6

0.5

Frozen

Ready

Meals


Potato

Products

Frozen

Vegetables

Millio

ns


MillionsEuros

Data for the United Kingdom does not include Northern Ireland


Key trends

Total Frozen performance hasaccelerated in latest 12 weekswith value growth of 1.1% YOYcompared to MAT growth of 0.5%

YOY

Of the top 5 categories only thetop 2 are experiencing YOY value

gains.Trended performance of thecategory TY has been positive ablip in the first half of the qtr has

stabilised in the latest weeks.

In the recent month OL has againseen growth due to increase involumes derived by Incremental.

Base has also grown marginally

in the latest 12 weeks, due toincreased ROS and prices in OL



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United Kingdom



-0.7

-1.1

-11.4

-16.0

-16.1

-18.0 -16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0

Frozen Potato

Products

Frozen Meat

Frozen Fish

Frozen Desserts

Frozen Vegetables

Millions

33.3

5.3

0 10 20 30 40

Ice Cream

Frozen Ready

Meals

Millions

Data for the United Kingdom does not include Northern Ireland

Category Insights

With growth (value & volume) in only 4 of the 12 major categories. The overallfrozen category is being bolstered by certain strong performing categories bringing

up the average (Poultry, Ready meals, & Pizza).

Volume and units have continued to fall away this period and it only the increasesseen in prices that are keeping up the more positive value trend.

Retailer own brand is continuing to perform strongly due to a combination ofnumerous factors including the increasing acceptance of OL as a quality offer andthe difficult financial circumstance consumers find themselves in.

The level of promotion has actually declined for the first time in years in Totalfrozen this qtr. However it still should be note that within Frozen certain categories

ie Frozen Pizza have very high levels of promotion 80% - 90% VSOD somanufacturers will still need a robust promotional strategy to compete.

Ice Cream, one of the key sectors in the summer months is mirroring the widercategory trends, notably increasing promotions which are less effective and

switching to Private Label driven by price.



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Final Notes

Notes on Category Definitions for Countries

Due to the diverse products found in individual countries across this market it was necessary to

consolidate the available data into the categories in this report. In some cases it wasnt always

possible to align products across all 6 countries hence the need to highlight any anomalies in the

report. Those exceptions are listed below:

Frozen Dough & Bread Products

The UK data in this report does not include this category


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Resources

To gain insight into opportunities across specific categories, segments, channels or retailers, contact

your SymphonyIRI client service representative regarding custom analyses leveraging the following

resources:

InfoScan Census is a syndicated retail tracking service that enables manufacturers and retailersto acquire industry insights used to make better business decisions. InfoScan Census utilizes the

data that SymphonyIRI Group collects from grocery, drug, and mass merchandise retailers to provide

the most comprehensive and accurate syndicated data offering in the Fast Moving Consumer Goods

(FMCG) sector. With access to accurate, granular detail by category, geography, measure, and time

period, clients have the tools needed to develop marketing and sales strategies based on product

performance, distribution, and promotion responsiveness. All data about frozen foods are coming

from InfoScan Census.

SymphonyIRI Consulting provide strategic insights and advice leveraging a variety of datasources, predictive analytics, enabling technologies, and business analyses to help CPG

manufacturers and retailers address significant sales and marketing issues effectively

Contact: SymphonyIRI Group, [email protected], Tel: +33 1 30 26 81 00

About SymphonyIRI Group

SymphonyIRI group, formerly named Information Resources, Inc. (IRI), is the global leader ininnovative solutions and services for driving revenue and profit growth in FMCG, retail and

healthcare companies. SymphonyIRI offers two families of solutions: core IRI solutions for

market measurement and symphony advantage solutions for enabling new growth opportunities

in marketing, sales, shopper marketing and category management. SymphonyIRI solutions

uniquely combine content, analytics and technology to deliver maximum impact. SymphonyIRI

helps companies create, plan and execute forward-looking, shopper-centric strategies across

every level of the organisation.

For more information, visit www.SymphonyIRI.eu

Pulse Report - Frozen Food - Q2 2011

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