two-line headline goes here · pet care +12% otc +1% beauty +3% produce +8% deli +6% baby +4%...
TRANSCRIPT
This artwork was created using Nielsen data.
Copyright © 2019 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
Carman Allison
Q2 2019
POLARIZING GROWTHTRENDS IMPACTING IN-STORE
2Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
POLARIZING GROWTH IMPACTING FMCG
MANUFACTURERSCONSUMERS RETAILERS
3
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Consumer economics and inflation
are fueling polarizing growth
4
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
CANADIAN CONSUMER SENTIMENT DROPS TO
ITS LOWEST LEVEL SINCE Q4 2016
CONSUMER CONFIDENCE
JOBS
% POSITIVE
99 -752% -4
58% -6FINANCES
TOP 5 CONCERNS
43% -3GOOD TIME TO BUY
24% Economy
22% Health
21% Food Prices
19% Debt
15% Fuel Prices
Source: The Conference Board® Global Consumer Confidence™ Survey, in collaboration with Nielsen – Q2 2019– Top 2 combined - Change versus previous quarter
5
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
BOTH OUT OF HOME AND GROCERY FOOD
INFLATION IS EXCEEDING CONSUMER PRICE INDEX
2.3%
2.1%
5.4%
4.8%
4.2%
2.0%
HABA
NON-FOOD
FOOD (GROCERY)
TOTAL FMCG
OUT OF HOME FOOD*
CONSUMER PRICE INDEX
Source: Nielsen MarketTrack, Canada National All Channels - Total Tracked Sales (Including Fresh) Q2 12 weeks to June 22, 2019CPI: Statistics Canada July 2019 *NPD Menu Inflation
INFLATION
RATE
6Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
BOTH REGULAR AND PROMOTED PRICES
ARE EXPERIENCING INFLATION
Source: Total sales: Nielsen MarketTrack, All Channels - Regular and TPR Sales: National G+D+M, 12 w eeks to June 22, 2019
Total Tracked Sales excluding Fresh Random Weight
2
1
1 11
2 2
4
Q2 1
7
Q3 1
7
Q4 1
7
Q1 1
8
Q2 1
8
Q3 1
8
Q4 1
8
Q2 1
9
Total Sales Reg Price TPR PriceFMCG Inflation
7
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
REFRIG & DAIRY
+5%
MEAT & SEAFOOD
+3%
FR
OZ
EN
FO
OD
S
GE
NE
RA
L M
ER
CH
HO
US
EH
OL
D &
PA
PE
R
GROCERY
+6%
PE
RS
ON
AL
BAKERY
+3%
PET CARE
+12%
OTC
+1%
BEAUTY
+3%
PRODUCE
+8%
DELI
+6%
BABY
+4%
Source: Nielsen MarketTrack, National All Channels – 12 weeks to June 22, 2019
PRODUCE, DELI AND PET PRODUCTS REPORT
DOUBLE DIGIT INFLATION
TOTAL FMCG
PRICES
JUMPED
+4%
IN Q2 2019
Annual Price Increases By Department
0% +5% -5% +3%
8
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
CONSUMERS VALUE SIZE OPTIONS WHEN
FACED WITH HIGHER PRICES
If raw material costs rose substantially for a manufacturer of food, household and/or personal care products what would you prefer they do?
Q Lower cost per use with larger sizes
Offer smaller sizes to lower unit cost
Same # of sales with less of a discount
Downsize existing pack size
Offer fewer sales
Increase existing prices
Reduce quality but keep price the same
65%
36%
32%
25%
19%
17%
7%
Source: Nielsen Panel View s Survey Canada 2018
9
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Despite rising prices, 2019
FMCG sales performance is
similar to previous years
10
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
2019 FMCG SALES MIRRORING LAST 2 YEARS
3.4%2.8%
1.9% 2.0% 2.1%
YTD 2019
0.5% 1.7% 0.6% 0.3%
-1.9%
Dollar Trend
Tonnage Trend
2015 2016 2017 2018 YTD 2019
Source: Nielsen MarketTrack, Canada National All Channels – 52 weeks Year End - Total Tracked Sales less General Merch (UPC Only) YTD 24 weeks to June 22, 2019
11
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
2.2
3.0
1.92.5 2.4
1.51.9
National Maritimes Quebec Ontario Man/Sask Alberta B.C.
ALBERTA CONTINUES TO LAG REGIONAL GROWTH
52 week Regional CPG Performance = $ % Chg
Source: Nielsen MarketTrack, National All Channels – 52 weeks Ending June 22, 2019 - Total Tracked Sales excluding General Merch Fresh Random Weight
Vol
% Chg -1.0 -1.5 -2.0 -1.1 +0.4 -0.4 -0.5
12
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Hot Beverages are now lagging
in-store FMCG sales
13
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
CENTRE OF
STORE* VS.
PERIMETER
44.3% 20.9% 29.7%
COS Food COS Non Food Perimeter
+1+3 +2
* Excludes General Merchandise
BOTH PERIMETER AND CENTRE OF STORE FOOD
ARE FUELING FMCG RETAIL GROWTH
Source: Nielsen MarketTrack, National All Channels – 52 w eeks to June 22, 2019 - Total Tracked Sales including Random Weight Fresh
SNACK +3
FROZEN FOODS +3
COLD BEVERAGES +3
CONDIMENTS & SAUCES +3
REFRIG/DAIRY +3
CONFECTIONERY +3
BAKING NEEDS +2
PREPARED FOODS +1
DESSERTS +1
HOT BEVERAGES 0
PAPER +4
BODY CARE +2
OTC +1
HOUSEHOLD +1
ORAL HYGIENE +1
PET 0
BABY CARE 0
HAIR CARE 0
COSMETICS -3
SHAVING -4
VEGETABLES +8
FRUIT +2
MEAT & SEAFOOD +1
BAKERY +1
DELI 0
14Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
71.3%
28.7%
COLD BEVERAGES OWN SHARE OF THROAT, BUT
HOT BEVERAGES ARE DRIVING GROWTH
Source: Nielsen MarketTrack, Canada National All Channels + C&G – 52 w eeks to June 22, 2019 * Excludes dairy and dairy alternative beverages
HOT$1.9B
+0%
COLD$4.6B
+3%
$6.5B*
+2%
TOTAL BEVERAGES
+0%Vol %
Chg
-2%Vol %
Chg
+5%
Inflation
+0%
Inflation
15Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
WHAT’S HOT IN BEVERAGES
Source: Nielsen MarketTrack, National All Channels, 52 w eeks to June 22, 2019 * Categories w ith annual sales > $20 million
21
19
16
12
8
7
5
4
4
3
COFFEE DRINKS
CARBONATED WATER
MILKSHAKES & EGG NOG
LOW ALCOHOL BEVERAGES
EXTREME ENERGY DRINKS
RTD ICED TEA CANS
FLAVOURED SOFT DRINKS
TOMOATO JUICE
DRINK MIXES
INSTANT COFFEE
-9
-5
-4
-4
-2
-1
-1
0
FROZEN FRUIT BEVS
DRINK POWDERS & LIQUIDS
HOT CHOCOLATE
TOMATO JUICE
COFFEE WHITENERS
COCONUT WATER
VEGETABLE JUICES
JUICES & DRINKS
16Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
21
19
16
12
8
7
5
4
4
3
COFFEE DRINKS
CARBONATED WATER
MILKSHAKES & EGG NOG
LOW ALCOHOL BEVERAGES
EXTREME ENERGY DRINKS
RTD ICED TEA CANS
FLAVOURED SOFT DRINKS
TOMOATO JUICE
DRINK MIXES
INSTANT COFFEE
-9
-5
-4
-4
-2
-1
-1
0
FROZEN FRUIT BEVS
DRINK POWDERS & LIQUIDS
HOT CHOCOLATE
TOMATO JUICE
COFFEE WHITENERS
COCONUT WATER
VEGETABLE JUICES
JUICES & DRINKS
WHAT’S HOT AND NOT IN BEVERAGES
-7
-5
-4
-4
-2
-1
-1
FROZEN FRUIT BEVS
ICED TEA MIXES
VEGETABLE JUICE
POWDERS & LIQUIDS
JUICE/DRINKS - SHELF
COCONUT WATER
ROAST & GROUND COFFEE
Source: Nielsen MarketTrack, National All Channels, 52 w eeks to June 22, 2019 * Categories w ith annual sales > $20 million
17
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
45.2
41.5
11.6
1.7
R&G (less On Demand)
On Demand
Instant
Drinks
Source: Nielsen MarketTrack, Canada National All Channels – 52 w eeks to June 22, 2019
COFFEE SEGMENT $ SHARE AND GROWTH: $1.6 Billion $0% V+2%
+3 +1
-5 -2
+3 +2
+21 +19
$ % CHG Vol. % CHG
Vol 68%
Vol 17%
R&G DOMINATES TOTAL COFFEE CONSUMPTION.
ON DEMAND FUELING OVERALL SOFTNESS
18
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Smaller Brands and Private Label
are fueling polarizing growth
19
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
SMALLER MANUFACTURERS AND PRIVATE LABEL
ARE DRIVING GROWTH
3.4%
2.6%
1.6%
0.9%
PRIVATE LABEL
101+
21-100
TOP 20
Source: Nielsen MarketTrack, National All Channels – FMCG Manufacturers Ranked on Dollar Sales - 52 w eeks Ending January 5, 2019
Dollar Volume
29.6%
25.8%
25.8%
18.8%
Total FMCG +2.0%
28.4%
27.6%
20.0%
24.1%
Market Share
20
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
SMALLER MANUFACTURERS ARE CONTRIBUTING
OVER 33% OF ANNUAL FMCG DOLLAR GROWTH
Source: Nielsen MarketTrack, National All Channels – FMCG Manufacturers Ranked on Dollar Sales - 52 weeks Ending January 5, 2019
29.6%13.3%
25.8%
20.5%
25.8%
33.8%
18.8%32.3%
Market Share Growth Contribution
PRIVATE LABEL
101 +
21-100
Top 20
Millions Chg VYA
+ $490.8
+ $514.8
+ $312.6
+ $202.8
21
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
64% OF SMALL MANUFACTURERS ARE FOOD
COMPANIES AND OVER HALF ARE CANADIAN
% Dollar by Department % Dollars by Country
Source: Nielsen MarketTrack, National All Channels – FMCG Manufacturers Ranked 101-350 on Dollar Sales - 52 weeks Ending January 5 2019
8%
14%
14%
64%
OTHER
HABA
NON GROCERY
FOOD +6
-4
+0
+7
CANADA
51% +4
U.S.
32% +1
OTHERS
17% +7
22
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
GROWTH AT BOTH ENDS OF THE PRICING SPECTRUM
Source: Nielsen MarketTrack, National GDM – FMCG Manufacturers Ranked on Dollar Sales - 52 w eeks Ending January 5, 2019
Per Vol Index
Avg. Price
31.2%
28.2%
44.6%
46.9%
38.9%
PRIVATE LABEL
101+
21-100
TOP 20
TOTAL $4.92
$5.14
$4.60
$6.33
$3.84
100
105
94
129
78
% $’s Sold With Price Cut
23
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
FOR R&G COFFEE, IT’S THE MID-TIER BRANDS
DRIVING GROWTH – BUT OFF A SMALLER BASE
-3.3%
1.0%
13.3%
-2.1%
PRIVATE LABEL
>15
5-15
TOP 5
Source: Nielsen MarketTrack, National All Channels – R&G Coffee Manufacturers Ranked on Dollar Sales - 52 w eeks Ending June 22, 2019
$ Share
67.0%
9.9%
5.5%
17.6%
Total R&G Coffee -0.9%
24
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
HOW CAN LARGER BRANDS COMPETE?
MERGERS AND
ACQUISITIONS
BE NIMBLE AND
LOWER THE BAR
STAY RELEVANT
AND ON TREND
25
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Consumers are shifting purchases
to polarizing retail formats
26
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
SPECIALTY, ONLINE AND VALUE BASED FORMATS
ARE LEADING RETAIL SALES GROWTH FOR FMCG
Source: Nielsen MarketTrack, 52 weeks Ending June 22, 2019
* Nielsen Homescan Channel Watch – 52 weeks Ending June 29 , 2019 - Total Expenditures
$ % Chg
+15% Ethnic Stores*
+12% Dollar Stores*+8% General Merch*+7% Online*
+4% Pet Stores*+3% Convenience & Gas
+3% Warehouse Clubs*
+2% Grocery + Mass
-0% Drug Stores
-33% Department Stores*
-10% U.S. Cross Border*-8% Health Food Stores*-5% Toy Stores*
-3% Hardware/DIY*
27
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
THE DIGITAL FUTURE IS HERE AND NOW
FMCG online sales
are growing
+7%In the past
yearMargin by which
e-commerce sales growth is outpacing
brick & mortar
6:1Online share for FMCG
is forecasted to almost
triple by
2021
2.3% 5.3%
Source: Nielsen Homescan Cross Outlet Facts, 52 w eeks ending June 29, 2019 – E-Commerce Share
28
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
ONLINE SHARE OF COFFEE SALES LAGS TOTAL
FMCG BUT TRENDING HIGHER THAN GROCERY
1.6%
1.2%
0.9%
2.3%
COFFEE
BEVERAGES
FOOD (GROCERY)
TOTAL FMCG
Source: Nielsen Homescan Cross Outlet Facts, 52 w eeks ending June 29, 2019 – E-Commerce Share
Online Channel Share
29
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
11.7
2.2
20.2
3.3
TOTAL FOOD COFFEE
2015 2019
16% Shopper Conversion
vs 78% for All Channels
Source: Nielsen, Homescan Cross Outlet Facts, 52 w eeks ending June 29, 2019 – E-Commerce Penetration
ECOMMERCE PENETRATION GROWING AS MORE
CONSUMERS SHIFT THEIR SPENDING ONLINE
% of Canadians Shopping Online
3.0 Million
Households
494 K
Households
30
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
2% 3% 1%-3%
7%
21%
19%15%
TOTAL TRIPS FOOD BEVERAGES COFFEE
Bricks & Mortar
E-Commerce
BRICKS AND MORTAR GROWTH STATIC WHILE
E-COMMERCE GAINING MOMENTUM
DOLLAR SALES GROWTH VS. YAGO
Source: Nielsen Homescan Cross Outlet Facts, 52 w eeks ending June 29, 2019– National
31
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
THERE IS NO SINGLE ONLINE FMCG SHOPPER
DIGITAL
DODGERS
INDIFFERENT
& IMPULSIVE
DIGITAL DEAL
DIGGERS
CLICKING
CONNOISSEURS
Technology
Averse
Digital
ReluctantsGrab & Go Non-Planners
Tech Savvy
Value
Seekers
ResearcherDigital
Advocates
LOW TRUST
LOW TECH-SAVVY
LOW VALUE SEEKING
LOW SHOPPING
ENJOYMENT
RESEARCH DRIVEN
TECH SAVVY
ENJOY
SHOPPING
ONLINE
34% 20% 35% 11%
Source: Nielsen PanelView s, Digital Shopping Survey, 2018 – Pt Chg vs 2016
-4 pts -2 pts +5 pts +1 pts
32
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
59.3
40.7Discount
Conventional
+3%
+2%
Discount Share & Growth
Grocery Composite
Maritimes 18.7 +22
Quebec 37.5 +4
Ontario 47.6 +2
West 39.0 +2
-
Source: Homescan Grocery Watch, National All Channels - 52 weeks to June 29, 2019 Grocery Composite
DISCOUNT RETAIL FORMATS CONTINUE TO WIN
OVER THE CONSUMER WALLET
33
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
DISCOUNT RETAILERS GAINING SHARE AMONG
FOOD, BEVERAGES AND COFFEE
54.3 54.2 55.1
45.7 45.8 44.9+3
+2
Discount
Conventional
FOOD BEVERAGES COFFEE
Source: Nielsen MarketTrack, National GDM– 52 weeks Ending June 22, 2019 - Total Tracked Sales excluding General Merch Fresh Random Weight
+3
+2
+3
+1
34
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
WESTERN DISCOUNT FORECASTED TO INCREASE
WITH SAFEWAY’S CONVERSION TO FRESHCO
61.0 58.7
39.0 41.3
CURRENT FUTURE
+6%
+1%
+11%
-3%
+2.3 PTS
Sobeys Inc. to convert 25%
(65) of their 255 Safeway
banners to Freshco.
Freshco banners in Ontario
average sales per store
25% higher than Western
Safeway stores
STORE CONVERSIONS
STORE PERFORMANCE
Source: Homescan Grocery Watch, National All Channels - 52 weeks to June 22, 2019 Grocery Composite
Dis
co
un
tC
on
ve
nti
on
al
35
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
POLARIZING GROWTH IMPACTING FMCG
MANUFACTURERSCONSUMERS RETAILERS
Economics and
life-stages are fueling polarizing
growth
Consumers are
shifting purchases to online and discount
retail formats
Smaller Brands and
Private Label are fueling incremental
growth
36Copyri
ght
© 2
019 T
he N
iels
en C
om
pany (U
S),
LLC
. C
onfidential
and pro
pri
eta
ry.
Do n
ot
dis
trib
ute
.
IT’S HARD TO WIN THE RACE IF
YOU’RE JUST KEEPING PACE
37
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Stay Connected to Consumer and Media Trends
For the latest insights, visit nielsen.com
@CarmAllison
@Nielsen
Thank you
38
Co
pyr
igh
t ©
20
19
Th
e N
iels
en C
om
pan
y. C
on
fid
enti
al a
nd
pro
pri
etar
y.
Copyright © 2019 The Nielsen Company. Confidential and proprietary.