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Trends and Insights From Grain Based Categories. Bill Goergen ACNielsen. A Brief Word from our Sponsor…. A VNU Company… Active in over 100 countries around the world tracking sales in retail outlets measuring purchases in households

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Trends and insights from grain based categories l.jpg

Trends and Insights From Grain Based Categories

Bill Goergen

ACNielsen


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A Brief Word from our Sponsor…

  • A VNU Company…

    • Active in over 100 countries around the world

      • tracking sales in retail outlets

      • measuring purchases in households

      • (online) consumer surveys, interviews, focus groups

    • VNU Advisory Services

      • integrate information from multiple sources

      • transform raw data into strategic insights and tailor-made recommendations

      • advise on winning business decisions for complexsales and marketing issues


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What are we going to look at today?

  • Consumer Sales Trends of a variety of grain based categories

  • Focus on Bread, Cereal, Pasta, and Rice

  • Regular vs Whole Grain Trends

  • Consumer take away and purchase dynamics

  • Summary and Conclusions


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Today’s Presentation

  • Covers Fixed Weight products, with a UPC Code

    • Fresh Bakery Products not included

    • Any Product that does not have a UPC

  • Does not cover fresh or random weight items

  • Generally, from the Grocery Channel (Outlets noted on each slide)

    • Wal-Mart is not included


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Fun Facts to Know and Tell

  • Low Carb diets first appeared in the 19th Century

  • Robert Atkins published his first diet book in 1972

  • Through the first 6 months of 2004, 994 new low carb products have been launched

  • Low Carb industry sales will top $25 Billion in 2004


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A few thoughts for consideration..

  • Can we separate trends within “Grains” from trends impacted by “Low Carb”?

    • Yes, but…

  • Many factors impact Category Trends

    • Pricing

    • Promotion

    • New Product Innovations

    • Demographic Trends

    • Consumer & Historical trends

    • Etc…


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Unit Pct Chg vs YAG

52 weeks ending 04/21/01

52 weeks ending 04/20/02

52 weeks ending 04/19/03

Latest 26 weeks thru 01/24/04

TOTAL US - FDM

TOTAL CEREAL

(-2.4)

(-1.5)

(-0.9)

(-5.0)

TOTAL BREAD & BAKED GOODS

(-0.2)

0.3

(-0.1)

(-2.9)

TOTAL PASTA

(-1.3)

0.6

(-1.0)

(-5.5)

DEHYDRATED POTATOES

(-2.6)

4.1

2.2

(-8.6)

SW. POTATOES & YAMS - CANNED

(-2.5)

(-7.8)

(-4.3)

1.7

POTATO - FROZEN

1.5

0.5

(-1.8)

(-4.1)

TOTAL PIZZA/SNACKS - FROZEN

4.6

4.9

(-0.5)

2.1

SALAD DRESSING - REDUCED/LOW CAL

(-5.5)

(-4.5)

(-3.2)

(-4.7)

TOTAL CRACKERS

2.1

(-1.4)

0.3

(-3.0)

TOTAL JUICES DRINKS - SHELF STBL

(-1.5)

1.2

1.6

0.8

TOTAL PREPARED FOODS - DRY MIXES

1.5

(-0.4)

(-2.1)

(-4.7)

ORANGE JUICE - REFRIGERATED

4.6

(-1.7)

0.3

(-2.9)

High Carb Categories have clearly had recent declines in Categories Sales

  • This includes Grain Based categories as well.

  • Some categories, like Cereal, may have been impacted but have been declining for years.

Source: ACNielsen Strategic Planner – FDM (Food, Drug and Mass Combined xWal-Mart)



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Declines in Grain Based Categories accelerated after the death of Mr. Atkins

Post April ‘03

Pre April ‘03

Current Trend

RTE Cereal

Pasta

Rice

Fresh Bread

52 WK 4/12/03

52 WK 4/10/04

18 WK 8/7/04

Source: Strategic Planner


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Fresh Bread Sales declined dramatically beginning in the Spring of 2003

Total US FDM X WMRolling 4 wk % Chg vs YA


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Total Bread Spring of 2003

On a long term basis, we do not see signs of recovery in Total Bread SalesTotal US Food/Drug/Mass Ex Wal MartEq Volume Change - Rolling 52 Week Basis


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Total Bread Spring of 2003

Whole Wheat/Oat Bread Representsa Significant Portion of Total Bread Sales and…


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Total Bread Spring of 2003

…Whole Wheat Bread continues to grow on a consistent basisTotal US Food/Drug/Mass Ex Wal Mart - Eq Vol Change - Rolling 52 Week Basis


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Total Bread Spring of 2003

Segments

-1.7

-0.9

-0.2

+0.4

+2.9

-0.7

+0.0

-0.9

Flavor Buyers

  • More Households purchase non-white Bread than White Bread

  • Wheat penetration gains were greater than White bread losses

Household Penetration

Pt. Chg

52 weeks April 24, 2004


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Total Bread Spring of 2003

Quarterly Penetration

  • Total Fresh Bread is declining very slowly over time

  • # of Households buying White and Wheat bread are nearly the same – White declining and Wheat growing

Household Penetration


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Total Bread Spring of 2003

Where did the White Bread Buyers Go?

  • In total, White bread declines were almost equal across three factors – but the largest percent was lost Baked good purchases

  • However volume was also shifted to other breads and other (non-bread) baked goods

Percent of Volume Loss


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Total RTE Cereal Spring of 2003

RTE Cereal Volume Trends have been in long term declineTotal US Food $2MMEq Volume Change - Rolling 52 Week Basis


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Total RTE Cereal Spring of 2003

The Rate of volume decline for Ready to Eat Cereal quickened in early 2003Total US FDMRolling 4 wk % Chg vs. YA


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Total RTE Cereal Spring of 2003

10-Year Penetration Trend

  • Like Bread, Penetration Trends on RTE Cereal have been in decline for years

% of Households Purchasing RTE Cereal

Source: Consumer*Facts 1999 - 2003


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Total RTE Cereal Spring of 2003

10-Year Buying Rate Trend

  • In addition to penetration declines, Buying Rate Trends for RTE Cereal have been softening for years

  • The annual decline between ’03 and ’04 is the largest in 10 years

Pounds Purchased per Household - RTE Cereal

Source: ACNielsen Homescan Consumer Panel


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Total Pasta Spring of 2003

Pasta Trends are Similar to Bread and CerealTotal US FDMRolling 4 wk % Chg vs YA


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Total Pasta Spring of 2003

Long Term Pasta Declines pre-date the Post Atkins accelerationTotal US Food $2MMEq Volume Change - Rolling 52 Week Basis


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Total Pasta Spring of 2003

Total Whole Wheat Pasta sales, while still strong, are moderatingTotal US Food $2MMEq Volume Change - Rolling 52 Week Basis


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Total Pasta Spring of 2003

HEALTH CONSCIOUS

Health oriented Dry Pasta types are driving the Specialty pasta increases

-3%

+8%

-2%

Dry Pasta Dollar Shares & Change vs YAGO

Flavored -19%

Wheat +28%

Organic/Soy +52%

Filled +30%

All Other -1%

-3%

Source: ACNielsen RMS Data; Total US; 52 w/e 4/19/04 vs YAGO; $2MM+ Grocery Stores


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Spaghetti & other Long Pasta Spring of 2003

Elbows

Lasagna

Hispanics

Empty Nesters

Families w/ Kids

Total Pasta

Some Types of Pasta Appeal to Different Types of Households


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Do we see Recovery in Spring of 2003

Recent Rice trends?Total US FDMRolling 4 wk % Chg vs YA

Total Rice


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Total Rice Spring of 2003

Total Rice Total US Food/Drug/Mass Ex Wal MartEq Volume Change - Rolling 52 Week Basis


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Total Rice Spring of 2003

Total Brown/ Wild Rice Volume Trends are softening in recent months - in contrast to whole grain segments of Bread, Cereal, and PastaTotal US Food/Drug/Mass Ex Wal MartEq Volume Change - Rolling 52 Week Basis


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Total Rice Spring of 2003

Total Brown/ Wild Rice vs Other Total US Food/Drug/Mass Ex Wal MartEq Volume Change - Rolling 52 Week Basis


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Summary and Conclusion Spring of 2003

  • Grain trends are clearly impacted by the Low Carb trends

    • General Mills believes ~ 1%

  • Long Term trends are impacting overall category performance

    • Not just a low carb phenom

  • Whole Grain Segments are generally much stronger than white/processed

    • Good Carbs vs Bad Carbs?

    • “Net Carbs” the next Marketing Buzz?

    • An opportunity for Manufacturers?


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Thank You! Spring of 2003


Appendix l.jpg

Appendix Spring of 2003


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Total Pasta Spring of 2003

Regular vs Whole Wheat Pasta Total US Food $2MMEq Volume Change - Rolling 52 Week Basis


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Total Bread Spring of 2003

Penetration

  • Over 60% of Low Carb Diet households still purchase White

    • They are no less likely to purchase Bread than other households, but fewer purchase White and more purchase Wheat

  • Wheat is increasing and White declining over all households

Percent of Households Purchasing

Point Change:

-0.1

+0.3

-0.2

-2.2

-3.4

-2.0

+3.0

+2.8

+5.6

6 months 11/03 Vs 11/02


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