REINVIGORATING THE CENTER OF THE STORE - Nielsen · .9 CONTRACTION RTE Cereal Soft Drinks Gum Sugar...

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Carman Allison – VP Consumer Insights REINVIGORATING THE CENTER OF THE STORE OCTOBER 2015

Transcript of REINVIGORATING THE CENTER OF THE STORE - Nielsen · .9 CONTRACTION RTE Cereal Soft Drinks Gum Sugar...

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Carman Allison – VP Consumer Insights

REINVIGORATING THE CENTER OF THE STOREOCTOBER 2015

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MEET YOUR PRESENTERS

CARMAN ALLISON

VP Consumer Insights

Nielsen

@CarmAllison

@Nielsen

JOE DAVIS

Director, Shopper Insights, Headquarter Initiatives

The Coca-Cola Company

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CENTER OF STORE CHALLENGES

MODERATE GROWTH WITH SALES SHIFTING TO FRESH

CONSUMERS ARE REDEFINING HOW THEY EAT

SHOPPING SHIFTS ARE PRESENTING NEW OPPORTUNITIES

1

2

3

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DEFINING CENTER OF STORE VS. PERIMETER

GroceryFrozen

DairyAlcohol

BakeryProduce

DeliMeat

Seafood

CENTER PERIMETER

FOOD FRESH

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IN THE PAST 2 YEARS, CENTER OF STORE HAS LOST 1.6% SHARE OF TOTAL STORE FOOD SPEND

Source: Nielsen Advanced Fresh Perspective – Food – Calendar Year Ends YTD Period ending June 27, 2015

CENTER PERIMETER

Shr. pt. chg. vs YA

2015 YTD

2014

2013

37.4%

36.7%

35.8%

62.6%

63.3%

64.2%

(+0.7)

(+0.9)

Dollar % Share

* Based on Nielsen sample stores

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64.9

63.4 63.5

64.963.9

62.5 62.6

64.463.1

62.0

35.1

36.6 36.5

35.136.1

37.5 37.4

36.0

36.9

38.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2013 2014 2015

$ share Perimeter Center

Q1 AND Q4 ARE KEY QUARTERS FOR CENTER OF STORE

Source: Nielsen Advanced Fresh Perspective – Food – Quarterly Period ending June 27, 2015

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7Source: Nielsen Scantrack x AOC + Convenience. Period Ending August 22, 2015

CENTER OF STORE- TOTAL -

CENTER OF STORE - FOOD -

CENTER OF STORE- NON FOOD -

$709.4B$370.5B

$339.5B

+2.1%-0.1%

$56.7B

+2.2%-0.1%

$31.5B

+1.9%+0.4%

$25.2BAbsolute $ growth(Billions)

$CAGR (from 2011)Units CAGR

Latest 52 weeks(Billions)

THE DEMISE OF THE CENTER OF STORE IS GROSSLY OVERSTATED

52%

48%

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CENTER OF STORE - FOOD -

$370.5

+2.2%

$31.5Absolute $ growth(Billions)

CAGR (from 2011)

Latest 52 weeks(Billions)

GROCERY DAIRY FROZEN

$246.9 $71.2 $52.4

+2.4%

$22.4

+0.8%

$1.7

+2.8%

$7.4

Share of Center Food Growth

71% 23% 5%

GROCERY AND DAIRY CASE CONTRIBUTING TO THE LARGEST CENTER OF STORE GROWTH

Source: Nielsen Scantrack x AOC + Convenience. Period Ending August 22, 2015

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CONTRACTION

RTE Cereal

Soft Drinks

Gum

Sugar

Margarine

Frozen Entrees

Powder Inst Drinks

SS Juice & Drinks

Frozen Pizza

RTE Desserts

-$764.4 -2.1%

-$731.2 -0.7%

-$411.3 -3.1%

-$379.3 -3.5%

-$284.9 -4.3%

-$272.5 -0.6%

-$237.4 -6.1%

-$179.0 -0.5%

-$164.0 -0.9%

-$155.8 -5.5%

4 yrCAGR

BUT NOT ALL IS GROWING IN CENTER OF STORE

Consumers are changing their

eating habits for healthier

alternatives

Source: Nielsen Scantrack x AOC + Convenience. Period Ending August 22, 2015

Absolute $ Chg

Millions

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+$4,751.2 5.1

+$3,870.7 7.0

+$3,129.0 4.1

+$2,540.7 8.4

+$2,297.2 5.9

+$2,291.3 3.6

+$1,717.2 7.9

+$1,585.8 6.1

+$1,301.1 6.0

+$941.1 15.7

EXPANSIONAbsolute $ Chg

Millions

4 yrCAGRCONTRACTION

RTE Cereal

Soft Drinks

Gum

Sugar

Margarine

Frozen Entrees

Powder Inst Drinks

SS Juice & Drinks

Frozen Pizza

RTE Desserts

-$764.4 -2.1%

-$731.2 -0.7%

-$411.3 -3.1%

-$379.3 -3.5%

-$284.9 -4.3%

-$272.5 -0.6%

-$237.4 -6.1%

-$179.0 -0.5%

-$164.0 -0.9%

-$155.8 -5.5%

DECLINES OFFSET BY CATEGORIES WITH LARGE GAINS

Salty Snacks

New Age Beverages

Candy

Coffee

Water

Cheese

Eggs

Yogurt

Nuts

Liquid Coffee

Source: Nielsen Scantrack x AOC + Convenience. Period Ending August 22, 2015

Absolute $ Chg

Millions4 yrCAGR

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THE LARGEST MANUFACTURERS ARE NOT GROWING

Top 25

Next 75

Over 100

Store Brands

FOOD MANUFACTURERS

4 YR CAGR

+0.1%

+3.2%

+6.3%

+2.6%

Source: Nielsen U.S. Scantrack xAOC 52 weeks ending 2011 vs 2015

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PERIMETER

4 Year CAGR

PERIMETER SHARE OF FOOD GROWTH FUELED BY INCREASED SPENDING DUE TO HIGHER PRICES

+5.1%

+1.5%

$’s Vol

FRESH

Meat

Produce

Deli

Bakery

Seafood

$ Share $ Vol

39.2% +4.7 -0.1

32.2% +5.4 +2.0

16.2% +6.2 +4.2

7.6% +4.0 +1.9

4.7% +4.9 -0.1

4 Year CAGR

Sources: Nielsen Perishables Group FreshFacts , Total U.S. – 52 weeks ending December 2014

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19%

29%

29%

23%

SHOPPING THE PERIMETER 48% of Millennials and 36% of Boomers shop the perimeter of the store on some or most trips

Source: Nielsen March 2015 Online Views Survey, Grocery Shopping/Meals, n=23409

Millennials

On most trips

On some trips

On a few trips

On none of my trips

14%

22% 33%

31%

Boomers

48% 36%Total Tips

101Total Tips

151

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DESPITE MILLENNIALS VISITING PERIMETER ON A GREATER PORTION OF TRIPS, THEY CONSUME LESS

Age% of

Households Center of Store Perimeter

<35 15.6% 94 93

35-44 13.2% 109 108

45-54 18.8% 112 111

55-64 17.5% 109 110

>65 13.3% 95 101

DOLLAR INDEX

Families

Shift

Sources: Nielsen Homescan Total Store View , Total U.S. – Al l Outlets - 52 weeks ending June 27, 2015

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HISPANIC AND ASIAN CONSUMERS WILL FUEL FUTURE GROWTH FOR PERIMETER

% of Households Center of Store Perimeter

White Non Hispanic

75.8% 103 99

Hispanic 12.6% 102 111

African American 12.4% 86 97

Asian 3.7% 78 106

DOLLAR INDEX

Center of store needs to diversify to meet multicultural needs

Sources: Nielsen Homescan Total Store View , Total U.S. – Al l Outlets - 52 weeks ending June 27, 2015

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CONSUMERS ARE REDEFINING HOW THEY EAT

OUT OF HOME

MEALSOLUTIONS

SNACKING HEALTH AND WELLNESS

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AWAY-FROM-HOME SURPASSES SUPERMARKET SALES

Sources: U.S. Census Bureau, Advance Monthly Sales for Retail & Food Services, Total U.S., 4451: Grocery Stores & 722: Food Services & Drinking Places, Seasonally Adjusted Sales

$10

$20

$30

$40

$50

$60

1992 2010 June 2015

Bill

ion

s

U.S. Grocery Stores U.S. Food Services & Drinking Places

$27.8

$43.0

$50.5

$17.2

$37.6

$51.5

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RETAILERS AND CONSUMERS ARE RESPONDING

RETAILERS NEED TO WIN CONSUMERS’ SHARE OF STOMACH

Welcome to the Grocerant

Sources: Hy-Vee; Supermarket News

4 Year CAGR

+5.8%+3.9%

$’s Vol

Deli Prepared MealsPerformance

Sources: *Nielsen Perishables Group FreshFacts , Total U.S. – 52 weeks ending December 2014

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MORE THAN 60% OF CONSUMERS BUY TAKE-AWAY DELI PREPARED MEALS FROM GROCERY STORES

Grocery

Mass + SC

Warehouse

C&G

Drug

Pt. Change vs. 2013% of Consumers Shopping Prepared Meals

61%

23%

17%

17%

3%

+1

+2

+2

+0

+1

Sources: Nielsen Homescan Total Store View , Total U.S. – 52 weeks ending June 27, 2015

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WHAT’S TRENDING IN THE MEAL SOLUTIONS?

Sources: *Nielsen Perishables Group FreshFacts , Total U.S. – 52 weeks ending 7/25/2015 (vs . year ago)

2%

3%

4%

5%

5%

5%

7%

7%

8%

9%

9%

10%

10%

12%

Desserts

Platters

Breakfast Foods

Salads

Sides

Prepared Chicken

Entrees

Sandwiches

Snacks

Soups

Appetizers

Pizza

Dips/ Spreads

Sushi

Growth continues as shoppers choose meals and components over ingredients

D E

L I D

E P

A R

T M

E N

T

Center of store categories still play a

role in complementing the plate

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CENTER OF STORE CATEGORIES ACCOUNTS FOR 50% OF THE PLATE

% of Meal Occasion

Source: Canadian Consumption Diary, 2014-2015

48%52%

Breakfast Lunch Dinner

51%49% 51%49%

Perimeter Center of Store

Based on a Canadian study

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50% OF AMERICANS ARE SNACKING AS A MEAL REPLACEMENT – SKEWED TO CENTER OF STORE

Source: Canadian Consumption Diary, 2014-2015

Global Snacking Survey U.S. Respondents Q1 2014

Top 10 Snacks’Share of Store Area

60%40%

Perimeter Center of Store

50%

Snacking as a mealreplacement

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HALF OF AMERICANS ARE ACTIVELY TRYING TO LOSE WEIGHT

• Source: Nielsen Global Online Consumer Confidence Surveys – Q4 2014 - USA

60%consider

themselves overweight

50%are trying

to lose weight

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DIET DOMINATES WEIGHT LOSS EFFORTS AMONGST THOSE TRYING TO LOSE WEIGHT

Source: Nielsen Global Online Consumer Confidence Surveys – Q3 2014

Making a change in their diet

83%59%

59%

57%

48%

45%

Eating less fats

Eating less sugary foods

Eating more fresh foods

Portion control

Less processed foods

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HEALTH & WELLNESS TODAY IS VERY FRAGMENTED

21ST CENTURY 20TH CENTURY

Wellness Characteristics

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MAJOR SHIFT IN “WELLNESS” THAT DRIVES GROWTH

21ST CENTURY 20TH CENTURY

Wellness Characteristics

+6%

CAGR

0%

CAGR

Source: Nielsen xAOC 52 weeks ending Q1 2012 vs Q1 2015

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AMERICANS INTEND TO BUY MORE FRESH ITEMS% who intend to buy

35

32

20

19

13

11

11

6

8

12

11

12

15

18

Vegetables

Fruit

Meat & Poultry

Fish

Cheese

Bread

Deli Meats

Buy moreBuy less

+

+

+

+

+

Source: Nielsen Global Survey – Q3 2014 - USA

13

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ACTIONS TO DRIVE CENTER OF STORE GROWTH

MAXIMIZE ASSORTMENT

IN STORE MATTERS

MOST

FOCUS ON REVENUE GROWTH

THINK OUTSIDE THE

AISLE

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MORE CONSUMERS ARE SHOPPING CENTER OF STORE OUTSIDE OF CONVENTIONAL GROCERY

49.8%

20.8%

10.8%

5.1%

3.5%

2.2%

2.1%

1.2%

0.9%

Conventional Grocery

Supercenters

Warehouse Club

Value Grocery

Mass Merch + SC

Dollar Stores

Drug Stores

Premier Fresh Grocery

Online

2015 2011

-4.5

+3.2

+0.9

+0.6

-0.1

+0.4

-0.2

+0.1

+0.2

Share pt. chg

Sources: Nielsen Homescan Total Store View , Total U.S. – Al l Outlets - 52 weeks ending June 27, 2015

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SMALL FORMATS DRIVING STORE EXPANSION

Source: Nielsen TDLinx

38%

30%

20%

8%4%

Dollar Stores

C-Stores

Drug Stores

Grocery

Mass Merchandisers

% of U.S. Store Count Expansion in the Top 20 Expansion Chains2014 versus 2007

18,371 new

stores

80% of Americans are considered

urban

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# of items carried

Sales velocity

2013 vs. 2010% Chg

GROCERY DAIRY FROZEN

17% 16% 9%

-7% -4% -4%

MORE IS LESSMore choice means sales per item is in decline

Source: Nielsen Scantrack: xAOC 2013 vs. 2010

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SMALLER STORES PUT MORE PRESSURE ON CENTER OF STORE ASSORTMENT – NEED TO GET IT RIGHT

$100

$90

$70

Item

A

Item

B

Item

C

Item

D

Item

E

High Performing

Items

Item A Item B Item C

High Cannibalization

LowCannibalization

Size of bubble: $ volumeOverlap: Level of cannibalization

Sale

s ra

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$ s

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CENTER OF STORE FOOD HAS A HIGHER PERCENT OF SALES ON PROMOTION - BUT THEY DON’T WORK

Source: Nielsen Scantrack x AOC + Convenience. Period Ending August 22, 2015

Nielsen Trade Promotion Landscape Analysis 2015

% Sold on Promotion% of Promotions that Don’t

Make Money

27.3%

21.0%

32.9%

Total Store

Center Food

Center Non- Food

71% Total Store

• 74% Dairy

• 73% Grocery

• 71% Frozen

Need to focus on promotional effectiveness to drive sales and profit

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JOE DAVISDirector, Shopper Insights, Headquarter Initiatives

The Coca-Cola Company

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THINK OUTSIDE THE AISLE TO FIND NEW GROWTH

What is our value to the rest of the store, and how do we demonstrate that value to retail customers?

How do we leverage partners in the store to drive new growth with shoppers?

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BUILD NEW CONNECTIONS FOR SHOPPERS

Source: Nielsen Total Store Connectivity Study, 2014*Sales for Fresh Coverage Area - ~18,000 stores for Traditional Grocery, Supercenter, Mass and Club channels (not projected)

StrongWeak

Stro

ng

We

ak

RESONATE WITH BUYERS

Weak Sales Connection & Weak Basket Connection

FRESH, HEALTHY INDULGENCE

Fresh health categories, with focus on convenience and indulgence

DEMONSTRATE YOUR VALUE

Strong Sales Connection & Weak Basket Connection

BIG PLAYERS ACROSS THE STORE

Large categories, more center store focused with broad reach

DEVELOP PARTNERSHIPS

Weak Sales Connection & Strong Basket Connection

PLANNED - OCCASION BASED

Specialty categories purchased for a planned or special occasion

MANAGE CONNECTIONS

Strong Sales Connection & Strong Basket Connection

TRADITIONAL CONVENIENT/STAPLESCategories that are focused on convenience and quick prep time

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FIND THE SWEET SPOTLeverage the correlation between consumer preference and sales

Highsales

correlation

High buyer

overlap

SWEET SPOT

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LEVERAGE CATEGORIES TO CAPTURE INCREMENTAL PURCHASES

Source: Nielsen Total Store Connectivi ty Study, 2014

91% of purchases DON’T include

Diet Carbonated Soft Drinks

90% of purchases DON’T include

Regular Carbonated Soft Drinks

Find similar buyers, but rare basket affinities

HIGH INCOME, older large FAMILIES or empty nesters

Deli PreparedChicken Buyers

HIGH INCOME, large FAMILIES ranging in age

Regular CarbonatedSoft Drink Consumers

HIGH INCOME, older large FAMILIES or empty nesters

Diet CarbonatedSoft Drink Consumers

DIE

T

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BUILD RELATIONSHIPS WITH CATEGORIES THROUGH SMALLER TRIP TYPES

Source: Nielsen Total Store Connectivity Study, 2014

Diet Carbonated Soft Drinks Regular Carbonated Soft Drinks

11%

30%32%

16%

In the Basket:

Fill-intrips

VALUE-ADDED VEGETABLES

Diet & Value-Added Veg Diet

Value-Added Veg

Stock-Up trips

Quicktrips

87%

12%

1%

59%52%

9%

30%32%

17%

In the Basket:

Fill-intrips

Regular &Deli Entrees Regular

Deli Entrees

Stock-Up trips

Quicktrips

86%

13%

1%

61%51%

DELI ENTREES

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Do we need a slide describing the campaign? (VO option is below)

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INCREASED BASKET SIZES DRIVES JOINT BENEFIT

Source: Nielsen Homescan Total Shopper View:YAGO: 8/5/12-12/29/12; Test: 8/4/2013- 12/28/13Source: Nielsen Homescan Total Shopper View: 8/4/2013- 12/28/13 versus year ago“Coke Effortless Meals Products” refers specifically to the packs included in the Effortless Meals program

CAMPAIGN PRODUCTS EXPERIENCED

53% GROWTH IN SALES

INCREASE IN HOUSEHOLDS BUYING DELI PREPARED FOODS8%

WERE ALSO NEW TO COKE AT THE STORE

19%

basket size with the other product (vs. without)

DELI PREP FOODS SHOPPERS

COCA-COLA SHOPPERS

+59%

+47%

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CREATE VALUE FOR EVERYONE

• Leverage the growing importance of Fresh

• Stay on trend with meal preparation and recipes

• Think outside the aisle for growth partners

• Know your brands’ relationship with other categories

• Focus on promotional effectiveness to drive sales and profit

• Maximize assortment to reduce cannibalization

• Offer portable and snacking options to meet the growing

consumer need for on-the-go convenience.

• Connect with new 21st Century growth drivers of health and

wellness

• Grow the basket by diversifying product offerings to meet the

growing needs of multicultural consumers

Win with RETAILERS

Win with SHOPPERS

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CONTACT US FOR MORE INFORMATIONUse the “Download the Deck” widget at the bottom of your screen to save this list

NIELSEN PERISHABLES GROUP [email protected]

HOMESCAN [email protected]

ASSORTMENT AND SPACE OPTIMIZATIONREVENUE MANAGEMENT & [email protected]

For general questions, please use the “Contact Us” widget at the bottom of your screen, or email [email protected].

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