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Report
BEST BETS: 2020
FINDING GROWTH FOR CANADIAN CPG
Carman Allison - VP Consumer Insights, Nielsen
Canadian Grocery Thought Leadership CEO Conference: November 2014
#thoughtlead14
@CarmAllison
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
THE CHALLENGE FOR GROWTH
2
CPG STILL SPUTTERING FOR GROWTH IN NORTH AMERICA
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
United States
Canada
+1.1
-0.4
+1.7
+0.3
Dollars
Units
Dollars
Units
Nielsen: ScanTrack - Total Tracked Sale
52 wks ending September 27, 2014
Nielsen: MarketTrack - Total Tracked Sale
52 wks ending September 20, 2014
3
FLAT IS THE NEW GROWTH
2
2
3
2
2
Dollar Sales
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
2010
2
Unit Sales
2011
2012
2013
YTD 2014
1
0
0
0
Source: Nielsen MarketTrack, National All Channels – YTD 40 weeks to September 20, 2014 - Total Tracked Sales excluding Fresh Random Weight
4
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
WHERE DO WE FIND FUTURE GROWTH IN A
CHALLENGING ENVIRONMENT?
5
BEST BETS FOR GROWTH BY 2020
W
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
West
The Prairies will continue to lead CPG growth
6
SINCE 2009
The prairies have outpaced National average Grocery Composite sales growth
+11% National
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+18% Prairies
Prairies Share
% of CPG
18.0%
2009
Source: Nielsen, HomeScan 2009 vs. 2014
+$656M
19.2%
2014
7
BY 2020…
The prairies will lead Canada’s population growth
Canada
+6%
B.C.
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+7%
Prairies
Quebec
+10%
+4%
Maritimes
+1%
Ontario
+6%
Source: Statistics Canada population growth estimates
8
BY 2020 THE PRAIRIES WILL POTENTIALLY
ACCOUNT FOR 26% OF CPG GROWTH
+$9.5B National
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
+$2.5B Prairies
Prairies Estimated
Share % of CPG
19.2%
2014
Source: Nielsen, HomeScan 2009 vs. 2014 – Grocery Composite - estimates
20.2%
2020
9
THE EMERGING PRAIRIES CONSUMER…
+7%
They spend 7% more than average and
shop less on deal
26%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
19%
Of household earn >$100k, an
increase of 4 points from 2009
Of household heads are <35 years old
(vs 14% for Canada)
Top 3
Of Canada’s fastest growing
cities are in the Prairies
(Calgary, Edmonton, Saskatoon)
Source: Nielsen Panel Views Survey 2013/4 Census Canada
10
BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Urbanization is redefining how we live and shop
11
35% OF CANADIANS CALL THE TOP 3 CITIES HOME
% of Population
51%
Top 3 Cities: 35% Top 10: 54%
28%
Top CPG Growth Cities
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
21%
Suburban
Urban
Rural
Calgary
+5%
Saskatoon
+4%
Thunder Bay
+4%
Abbotsford
+4%
Quebec City
+4%
Vancouver
+4%
Edmonton
+4%
Regina
+4%
Kelowna
+4%
Hamilton
+3%
Toronto
+3%
Source: Nielsen PanelViews Survey, Statistics Canada – Census 2011 MarketTrack: G+D+MM 52 weeks to September 20, 2014
12
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
CONSUMERS ARE REDEFINING HOME OWNERSHIP
Source: CMHC 2012 Report
67%
Single Dwelling -11%
homeownership
Multi +14%
13
URBAN, SUBURBAN, RURAL
Suburban
Rural
$4,102
$4,357
1-2
2-4
2-3
<44
35-54
>45
>$100K
$70K - $100K
<$50K
Urban
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$3,443
Age
Source: Nielsen HomeScan, Grocery Composite, 52 weeks ending September 20, 2014
14
THE URBAN CONSUMER…
12%
Less likely to own a car
13%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
12%
Bring prepared food home or
get meals delivered (vs. 8% Rural)
Eat out more often
(vs. 8% Rural)
32%
Source: Nielsen Panel Views Survey 2013/4
Of primary grocery shoppers
are male (vs. 19% Rural)
15
BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Urbanization is redefining how we live and shop
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
The male shopper is a key decision maker
16
MALE SHOPPERS ARE OFTEN OVERLOOKED BUT
ACCOUNT FOR 24% OF PRIMARY SHOPPERS
% of Households (>50% of Shopping)
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
24% 16%
60%
17% are male
22% are female
only households
only households
Source: Nielsen Panelviews June 2014
17
ENSURE IT’S EASY FOR MALES TO FIND WHAT THEY NEED
Male shoppers spend less but shop more often; less likely to browse and more likely
to buy only what they need
Avg Basket Size
Avg Trips / Year
Shopping Opinions % Agree
I tend to buy only what I need
when I go to the grocery store
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$32.41
$37.72
161
152
43%
54%
Given the opportunity I like
spending time browsing in the
grocery or food store
50%
Source: Nielsen Homescan, National All Channels, Total Expenditures, 52 Weeks ending July 26, 2014; Nielsen Panelviews June 2014
60%
18
THE MALE SHOPPER CAN BE MORE PROFITABLE
24%
Of male spend is on perceived deal
(28% for female)
46%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
65%
Use coupons (67% for female)
Typically prepare a shopping list
(78% for female)
48%
Source: Nielsen Panel Views Survey 2013/4
Are aged > 55 years
(40% for female)
19
BEST BETS FOR GROWTH BY 2020
West
The Prairies will continue to lead CPG growth
Urbanization is redefining how we live and shop
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
The male shopper is a key decision maker
Millennials will surpass Boomers as #1 consumer
20
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
MILLENNIALS AND BOOMERS: THE TOP 2 CONSUMER
POWERHOUSES
<19
‘Gen Z’
19-37
‘Gen Y’
38-47
‘Gen X’
48-67
‘Boomers’
68+
‘Greatest’
16%
27%
14%
28%
14%
4.7
9.8
5.0
Millions
5.7
Source: Statistics Canada – Census 2011
9.4
21
CURRENTLY MILLENNIALS ARE UNDER REPRESENTED
IN PURCHASING POWER
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Millennials’ Importance
27%
14%
12%
% of Population
% Household Heads
% of CPG $’s
9.1 M
2.0 M
11.7 B
Source: Source Nielsen Homescan – 52 weeks to March 29, 2014
22
MILLENNIALS WILL SURPASS BOOMERS BY 2020
2010
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
8.9 M
9.7 M
Total
Canada
26%
28%
2020
10.0 M
9.4 M
34.2 M
11.0 M
8.3 M
26%
24%
38.4 M
Millennials
Source: Statistics Canada M: Millions
2030
26%
20%
42.1 M
Boomers
23
THE CPG GROWTH ENGINE WILL SWITCH GEARS
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
By 2020…
MILLENNIALS
BOOMERS
+$12.5 B
-$4.3 B
+107%
-9%
Source: Nielsen Homescan 52 weeks to March 29, 2014 – HH <35 years – Based on older generation spend
24
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
TO MAXIMIZE FUTURE GROWTH OPPORTUNITIES,
WE FIRST NEED TO OPTIMIZE REVENUE
More than ever
consumers are
addicted to
promotions
25
% OF SALES WITH A PRICE AT A RECORD HIGH
% Dollars Sold on TPR
?
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
36%
2020
2014
27%
2007
Source: Nielsen MarketTrack, National GB+MM+DG - 52 week periods ending September 20, 2014
26
TradeEfficiency
Efficiency
Normative
ROI
Trade
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
2014 3Q
2014 2Q
2014 1Q
2013 4Q
6.0%
2013 3Q
$0.60
2013 2Q
6.5%
2013 1Q
$0.65
2012 4Q
7.0%
2012 3Q
$0.70
2012 2Q
7.5%
2012 1Q
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
$0.75
% OF WEEKS ON PROMOTION
TRADE EFFICIENCY
PROMOTION INEFFICIENCY IS GETTING WORSE
Frequency of
% of Weeks on Promotion
Promotion
27
WE ALL KNOW PROMOTIONS CAN BE INEFFICIENT
The majority of trade promotion events don’t break even
67%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DON’T BREAK EVEN
33%
MAKE MONEY
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
28
WE ALL KNOW PROMOTIONS CAN BE INEFFICIENT
The majority of trade promotion events don’t break even
67%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
DON’T BREAK EVEN
33%
MAKE MONEY
Source: Nielsen Trade Promotion Benchmark Database 2014 Q3
ELIMINATING
22%
OF PROMOTIONS
WOULD INCREASE
SALES REVENUE
29
CONSUMERS ARE STOCKING-UP – IT MAY LEAD TO
BIGGER BASKETS, BUT IT’S A TRIP KILLER
Units / Trip
+3%
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Units
/ Trip
Trips / HH
-5%
Instant Coffee
Butter
Dry Pasta
Hot Cereals
Flat Water
Vegetable Juice
Granola Bars
Deodorant Sticks
Laundry Detergent
Fruit Drinks
+17
+17
+13
+13
+11
+11
+11
+10
+9
+8
Trips
/ HH
-5
-18
-5
-4
-9
-15
-9
-14
-15
-16
Source: Nielsen Homescan Cross Outlet Facts – Canada - 52 weeks to June 28, 2014
30
ANOTHER FIX IS TO INCREASE PROMOTED PRICES
TO ALIGN WITH REGULAR PRICE INFLATION
Regular Prices
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Feature Prices
+4%
-1%
+5% Price
Divergence
Increasing feature prices by +5% is a $1.1 billion dollar opportunity
Resulting in a market growth from +1.7% to +3.4%
Source: Nielsen MarketTrack, National G+D+MM 52 weeks to September 20, 2014
31
OUR STRATEGY NEEDS TO CHANGE
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
“
Why does fewer, bigger and better
always end up as just more?
Fewer, smaller and better may be
the promotion strategy that changes
the dynamic
”
32
BEST BETS FOR GROWTH BY 2020
West
Allocate future resources to support growth
Smaller stores, shop local, meal solutions
Copyright ©2012 The Nielsen Company. Confidential and proprietary.
Male Shopper roles continue to evolve = profitability
Younger, ethnic, baby boom echo, technology
33
THANK YOU!
Stay Connected to Consumer and Media Trends
For the latest insights, visit us nielsen.com
Questions regarding the content of this presentation, contact:
Copyright ©2013 The Nielsen Company. Confidential and proprietary.
Carman Allison, email [email protected]
@CarmAllison
34

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