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TRANSCRIPT
Frozen Market Data
BFFF User Day
Chris Hayward – Head of UK Business Development
7th March 2017
Agenda
1. Christmas 2016 in 5 minutes
2. Current Landscape for Frozen
3. The importance of Health, and levers for growth
Christmas 2016 in 5 minutes…
And the general headlines are….
4
5
Latest 4 weeks to 1st January 2017Retailer Performance Trends – Till Roll
28.8%
17.4%
16.3%
10.7%
5.8%
5.2%
5.6%
3.8%
2.2%
28.3%
17.0%
15.8%
10.8%
5.7%
5.8%
5.7%
4.1%
2.3%
0.0% 10.0% 20.0% 30.0% 40.0%
Tesco
Sainsbury's
Asda
Morrisons
Co-op
Aldi
Waitrose
Lidl
Iceland
Share of Till Roll Grocers £%
4 weeks to 03/01/16 4 weeks to 01/01/17
1.5%
0.9%
0.5%
4.4%
2.1%
15.1%
5.5%
11.6%
7.6%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
Tesco
Sainsbury's
Asda
Morrisons
Co-op
Aldi
Waitrose
Lidl
Iceland
YoY % Growth
Till Roll. Kantar Worldpanel
6
Retailer advertising campaigns focused on different messages
Novelty – Emotive - Connection
Novelty - “John Lewis logged higher levels of
consumer engagement, ‘Buster the Boxer’ registered
13% higher than 2016’s ‘Man on the Moon”
Emotive -“ The ‘Love Mrs Claus’ advert generated
significantly higher motivation and engagement
among consumers than last year’s The Art of
Christmas (70% vs 51%) “
Relevance - Tesco’s ‘Bring it On’ campaign came
out on top for its adverts depicting shopping and
Christmas parties, which people can relate to.
“ Cumulatively, M&S scored highest of all
retailers on novelty, emotional impact and
relevance, delivering its surge in popularity ”
Source: Kantar TNS
7
£0m
£100m
£200m
£300m
£400m
£500m
£600m
£700m
£800m
7th
8th
9th
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th
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th
12
th
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st
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rd
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27
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28
th
29
th
30
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31
st
1st
Tho
usa
nd
s
2016
2015
Sales (£m)
Daily sales in the run-up to Christmas – Total Grocery
Christmas falling on a Sunday this year meant that we saw a double-peak across Friday and
Saturday
Source: 1w/e Total Grocery data to 01 January 2017
8
7000000
7500000
8000000
8500000
9000000
9500000
J F M A A M J J A S O N D J F M M A M J J A S O N D J F M M A M J J A S O N D J F M M A M J J A S O N D J J F M A M J J A S O N D J
Source: 4w/e Total Grocery data to 01 January 2017
Total Market
Sales (£000s)
Total Grocery Sales in the Market (£000s)
It was the biggest Christmas ever as shoppers splashed out on festive shopping
Christmas Sales
+2.9%
10
0
5
10
15
20
25
M&SWaitroseCo-opMorrisonsSainsbury'sAsdaTescoTOTAL
MARKET
12 w/e 01 Jan 17
12 w/e 03 Jan 16
% of sales on volume deal
Marked in the biggest 3 retailers, little change elsewhere
The movement away from volumes deals (multibuy and Y for £X)
RT43 (Grocery). KWP 2017 01. 12 w/e 01 Jan 17
11
Saturation for young families?
Online penetration by life stage
0
5
10
15
20
25
30
35
RetiredEmpty NestersOlder
Dependents
Family 10+
Years
Middle Family
5-9 Years
Young Family
0-4 Years
Pre-FamilyTotal
Dec 16
Dec 15
% penetration
Flat or declining Growing
RT43 (Grocery). KWP 2016 13. 12 w/e 01 Jan 17
Tipping points
13
Return to growth
Tesco revival
Promotions
Discounters
Online
5 changes that just happened
Agenda
1. Christmas 2016 in 5 minutes
2. Current Landscape for Frozen
3. The importance of Health, and levers for growth
14
Retailer or manufacturer…here’s your To-Do List
Win with a Health propositionNone of the big 4 are ‘owning’ health yet consumer demand is up and
Frozen has a role to play
Drive TransactionsGiving shoppers more reasons to buy Frozen more often is crucial to
turning around current performance
Capitalise on PremiumisationInnovation in the category is helping change consumer perceptions of
Frozen and starting to address long-term category decline
15
5 current market trends
• Imminent return to inflation /
trade-down
• Promotional levels falling
• Discounter growth slowing
• Online Growth slower than
before
• Tesco back in growth
Total Grocery Frozen?
16
7.0
11.2
11.3
28.1
26.9
27.4
38.3
39.7
40.4
8.0
5.9
5.5
7.5
8.3
8.2
8.5
6.1
5.6
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
in 2016
in 2006
in 1996
Toiletries
Household
Healthcare
Frozen
Fresh & Chilled
Ambient Groceries
Alcohol
Share of Grocery Spend
Share of spend by grocery area
Over the long term, Frozen has been squeezed by the Fresh & Chilled Sector
Source: Kantar Worldpanel – Grocery – 52 w/e 01 Jan 2017
17
Source: Kantar Worldpanel, Total FMCG, changes are 12 w.e Apr 15 vs, 12 w/e Apr 07
Grocery Inflation
+36%
Average spend
per household
+22%
+2 -1
-7
-7
Volume change Store Choice Promotions Product Choice
Total Market Long Term Shopper Coping Strategies
Shoppers will seek cheaper products as inflation rises, which provides opportunities for
Own Brand and also specifically Frozen
18
Frozen – Total Market KPIs
Frozen is accessible to all shoppers but relatively infrequently bought.
The latest annual trends suggest an increase in transactions and premiumisation
19
Iceland and Tesco are out-performing the discounters Year on Year
Kantar 12 we 01 Jan 2017
2.33.8
-2.5
3.21.5
-0.1
6.7
-9.6
1.4
-7.8
-12
-10
-8
-6
-4
-2
0
2
4
6
8
TotalMarket
Tesco Asda Sainsbury's Morrisons Co-Op Iceland FarmFoods
Aldi Lidl
Yo
Y S
pe
nd
Gro
wth
%
YoY Growth
Total Frozen| YoY Spend Growth and Share %| Latest 12 Weeks
24.7
13.211.7
8.6
3.8
16
45.6
3.6
0
5
10
15
20
25
30
Tesco Asda Sainsbury's Morrisons Co-Op Iceland Farm Foods Aldi Lidl
Spend Share %
20
Frequency is the key driver for growth, with only Iceland benefiting from
Market Premiumisation
Kantar 12 we 06 Nov 2016
Total Frozen| Total Market and Trended KPI’s| Trended 12 Weekly
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Total Market Tesco Asda Sainsbury's Morrisons Co-Op Iceland Farm Foods Aldi Lidl
Co
ntr
ibu
tio
n t
o G
row
th (
%)
Retailer KPI’s
Frequency Packs/Trip Price Penetration Spend
21
We are seeing decline driven by Y for £X sales, with TPR’s helping to grow the market
Kantar 12 we 06 Nov 2016
Total Frozen| Contribution to Growth by Promo-Type| Trended 12 Weekly
-15
-10
-5
0
5
10
TotalMarket
Tesco Asda Sainsbury's Morrisons Co-Op Iceland FarmFoods
Aldi Lidl
Con
trib
utio
n to
Gro
wth
%
Contribution to Growth by Promo-Type %
No Promotion TPR MultiBuy Y for £X Meal Deal Extra Free Other Promotions Total Sales
22
Core OL driving growth for Tesco and Morrisons, Iceland clearly leveraging brand strategy
Kantar 12 we 06 Nov 2016
Total Frozen| Contribution to Growth by OB Tier| Trended 12 Weekly
-10
-8
-6
-4
-2
0
2
4
6
8
TotalMarket
Tesco Asda Sainsbury's Morrisons Co-Op Iceland Aldi Lidl
Co
ntr
ibu
tio
n to
Gro
wth
%
Contribution to Growth by OB Tier %
Branded Premium Economy Other Core OB Total Sales
23
Frozne Desserts the key driver in Frozen, Frozen Meat a challenging area
(as is Fresh Meat)
Kantar 12 we 06 Nov 2016
Total Frozen| Contribution to growth by Category| Trended 12 Weeks
-15
-10
-5
0
5
10
15
Total Market Tesco Asda Sainsbury's Morrisons Co-Op Iceland Aldi Lidl
Con
trib
utio
n to
Gro
wth
%
Frozen Chips Potatoes & Veg Frozen Desserts/Ice Cream Frozen Meal Solutions Frozen Meat & Poultry Frozen Foods
24
Iceland have upgraded the majority of their estate, with a new look in-store and
online. More subtle colours and more premium feel
Post 2015Post 2013
25
Their next development is 25 stores planned to be turned into Warehouse stores
26
£1.50£1
Core products and packaging have also been given a make-over….
27
….Whilst developing & selling new products –
carving a Premium and Health niche within the Frozen sector
28
Iceland have been able to attract brand new shoppers to Iceland
through their NPD tie up with Slimming World
27.4 24.1
21.014.5
51.661.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% Spend% Shoppers
New to Frz Ready
Meals & New to Iceland
New to Frz Ready
Meals, Existing Iceland
Shoppers
Existing Iceland Frz
Ready Meal ShoppersFrozen Ready
Meals Profile
1.02m extra
shoppers, new to
Iceland in the latest
12 weeks, with
ABC1 over-index of
113
Iceland Customer Profile – Frozen Ready Meals
29
12.6 12.1 14.1
11.5 10.114.0
7.9 8.36.1
8.3 9.9 6.9
11.2 11.8 12.8
22.9 23.6 25.5
25.5 24.2 20.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Average Shopper Iceland Average Shopper Slimming World Shopper
Pre-Family
Young Family 0-4 Years
Middle Family 5-9 Years
Family 10+ Years
Older Dependents
Empty Nesters
Retired
% Spend Profile By Life Stage
And specifically the range has driven a younger shopper to Iceland
£1.5m per week (12w/e Oct 16)
30
Agenda
1. Christmas 2016 in 5 minutes
2. Current Landscape for Frozen
3. The importance of Health, and levers for growth
31
15 year trend
This has meant Health as a reason for consuming food has
doubled in popularity in 15 years
32
And as such and the average shopping basket is getting healthier
2.1
0.7
-0.4
1.1 0.81.4
3.7
Volume Calories Sugars Saturates Sodium Protein Fibre
33
Consumers are choosing healthier options across multiple food categories, but the
biggest long term growth has come from Frozen Foods.
% Share of Consumption for Health (Servings), % change YoY
FRESH & CHILLED FROZEN
2016: 44.5%2015: 43.9%
2014: 44%2013: 42.8%
2016: 17%2015: 16.2%
2014: 16.1%2013: 12.9%
Kantar Worldpanel Usage – 52 w/e 04 Dec 2016 – Total Food
+1%vs LY +1%
vs 2YA +4%vs 3YA
+5%vs LY +6%
vs 2YA +32%vs 3YA
34
And therefore shoppers consider a wider health proposition
including Brands as well as Own Brand
Kantar 12 we 06 Nov 2016
Top “Healthy” brands – consumer defined
35
13.8
1.2
13.3
44.2
16.4
2.2
0 5 10 15 20 25 30 35 40 45 50
Total Snacks
Teatime
Evening Meal
Lunch
Breakfast
Total Total Frozen
% frozen presence by occasion
LUNCH & KIDS TEA THE NATURAL STRETCH
Evening meal key for frozen, breakfast becoming more popular – Lunch and Teatime
the more natural adjacencies
36
13.3
24.1
14.9
16.2
5.3
29.8
4.4
230 5 10 15 20 25 30 35
37
Weekday IH lunch adult
relaxed shari
Weekday IH adult quick
sharing
Weekday IH lunch adult
relaxed alone
Weekday IH lunch adult
quick alone
Weekday in home lunch
with kids
Saturday lunch in home
Sunday lunch in home
Total Lunch Total Frozen
OVEN QUICK COOK TECHNOLOGY?
% frozen presence by occasion
KWP USAGE 52 W/E DEC 2016
TIME-RELAXED OCCASION
TIME-RELAXED OCCASION
Lunch is currently an under-trade for Frozen, and
specific focus on time-relaxed occasions could generate interest
37
Imagine if frozen food was only
available one day a week?
It is.
Frozen is consumed
at one meal in
seven.
38
Giving more reasons to buy Frozen with you is crucial – and
shoppers are prepared to pay more for thisMATCH THE OFFER TO THE NEED & SPEND
I spend 19% more to save time (convenient/ready-made)
I spend 5% more for health
I spend 25% more taste
I spend 234% more for solutions
I spend 87% more when it’s for a special meal Save time uplift based on ready made v homemade; Health based on low sugar/fat category case study;; solutions based on meal deals v average cost of a meal for two;
special meal based on consumer perception of special meal and amount spent v mean; taste based on Premium Own label category case study
39
The To-Do List
Win with a Health propositionNone of the big 4 are ‘owning’ health yet consumer demand is up and
Frozen has a role to play
Drive TransactionsGiving shoppers more reasons to buy Frozen more often is crucial to
turning around current performance
Capitalise on PremiumisationInnovation in the category is helping change consumer perceptions of
Frozen and starting to address long-term category decline
• Product Mix
• NPD
• Price Cut Promotions
• Marketing Comms
• Brand & Own Brand
• Category Choices
• Marketing Comms
40
41
Thank you
Chris Hayward
Tel.: +44 (0)7943 811656
For further information please contact: