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Nielsen

Nielsen. State of the Nation Ireland 2012. 1. The Economic Environment and Consumer sentiment. Ireland consumer confidence remains amongst the lowest in Europe – but higher than Spain, Portugal, Greece, and Italy. Q3 2012 Vs Q2 2012. Nielsen Global Consumer Confidence Index Q3 2012.

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  1. Nielsen State of the Nation Ireland 2012

  2. 1 The Economic Environment and Consumer sentiment

  3. Ireland consumer confidence remains amongst the lowest in Europe – but higher than Spain, Portugal, Greece, and Italy. Q3 2012 Vs Q2 2012 Nielsen Global Consumer Confidence Index Q3 2012 Increase No Change Global Avg: 92 (+1pt) USA: 90 (+3pts) EU Avg: 74 (+1pt) GB: 77 (+2pts) France: 61 (+0pts) Germany: 86 (-2pts) Ireland: 67 (+3pts) Index levels above and below 100 indicate degrees of optimism / pessimism Decrease Global average New this quarter – Bulgaria & Slovakia Source: Nielsen – Global Online Survey Consumer Confidence Q3 2012 – Global results

  4. Ireland’s volume growth is in fact one of the best in Europe – a positive sign, with price decreases slowing the value growth. Europe - Fast Moving Consumer Goods market dynamics – Q2 2012 growth rates (versus Q2 2011) price

  5. Nearly 1/4 now say they have no spare cash, and 59% are saving or de-leveraging with any cash they have. “Q - Once you have covered your essential living expenses, which of the following statements best describes what you do with your spare cash...?” Q3 2012 +4pts +2pts -4pts +4pts +1pts +1pts +3pts +2pts +2pts -1pts +1pts 31% 28% 25% 24% 21% Spare Cash Chg vs Q2 2012 17% 16% 12% 5% 1% 2% Source: Nielsen – Global Online Survey Consumer Confidence Q3 2012 – Ireland results

  6. Irish consumers continue to tighten their belts on both domestic and lifestyle spending. “Q. Compared to last Quarter Q2 2012, which of the following actions have you taken in order to save on household expenses?” Lifestyle DOMESTIC Spend less on new clothes 69% (+3%) Switch to cheaper grocery brands 68% (+1%) Cut down on take-aways 63% (+5%) Save on gas & electricity 67% (-1%) Cut down out of home entertainment 58% (+1%) Cut down on telephone expenses 48% (+2%) Cut down on holidays/ short breaks 52% (+0%) Look for better deals on loans, credit cards etc 46% (+9%) (% Chg Diff vs Q1 2012) Use my Car less often 40% (+2%) Cut down / buy cheaper brands of alcohol 33% (-1%) Delay upgrading PC or mobile 43% (+0%) Source: Nielsen – Global Online Survey Consumer Confidence Q3 2012 – Ireland results

  7. 2 Changing Shopping Behaviour

  8. 35% Shoppers say their average monthly grocery spend has increased by about 12% in the last year, mainly on Fresh. Average Monthly Spending(Food, Grocery & Personal Care vs. Fresh Food Only) Base: All Supermarket shoppers (2010 n=1016 , 2011 n = 998) Ref: Q9a/b Source: Nielsen – ShopperTrends 2011 Ireland results

  9. Irish shoppers keep shopping around, with an average of 3.3 different stores visited in past 4 weeks. Number of Supermarket/Hypermarket Used- Stores Used in Past 4 Weeks (2011) Base: All supermarket shoppers (n=939) Ref: Q13b Source: Nielsen – ShopperTrends 2011 Ireland results

  10. Only 1/3 of shoppers claim to be on auto-pilot when choosing their grocery store. Most are engaged and open to experimentation. Level of adoption Base: All Supermarket shoppers (n = 959) Ref: Q25 Source: Nielsen – ShopperTrends 2011 Ireland results

  11. Even in these difficult times shoppers are open to trying new things, NPD can still be a good hook. I like when manufacturers offer new product options Indicate your agreement with the statements related to the general purchase of NEW PRODUCTS Definitely/ Somewhat agree Neither agree/ disagree 58% 35% Disagree 7% Source: Nielsen – Global Online Survey Consumer Confidence Q3 2012 – Ireland results

  12. 3 The Search for Value – price & promotions trends

  13. Strategies for coping with increasing prices are to cut back, look for promotions, and to a lesser extent switch to cheaper brands. Response to rising food prices 52% Say Rising Food Prices had a MAJOR IMPACT on choice of GROCERY PURCHASES in the last 12 months Source: Nielsen – Global Online Survey Q1 2012 Ref: Q125 Source: Nielsen – ShopperTrends 2011 Ireland results

  14. Categories such as Deodorant are now selling almost half on promotion, and promotion levels have increased in many categories. Avg 34% of pack sales on promotion Source: Nielsen ScanTrack Multiples – UNITS – top 10

  15. 4 The Search for Value – Own Label and Discounters continue to grow

  16. Discounters have reached 13% €share with growth of +8% YoY increase in YoY Ad Spend Aldi +32% Lidl +28% Source : Strategic Planner MAT June 2012, Total Available Coverage; Nielsen AIS Jan -May 2012 all media exc on-line Scantrack categories only ie excludes fresh, random weighted etc

  17. Discounters still win on lowest priced store perceptions. Lowest Price Store Base: All Supermarket shoppers (2010 n=1008, 2011 n = 959) Ref: Q20 Source: Nielsen – ShopperTrends 2011 Ireland results

  18. Private Label in Numbers €2.2 billion the MAT Value of Private Label 21% the Value Share Private Label currently has €99.8 million the amount Private Label has grown in the last year +4.7% the rate of Value Growth of Private Label Year on Year Branded Products worth €8.4 billion but declining at -1.2% value Year on Year Categories included are – Alcohol, LAD, Sprits, Bakery, Cigarettes, Canned Food, Grocery, Chilled/Frozen Food, Household, Health & Beauty, Confectionery and Tobacco Source : Strategic Planner June 2012, Total Available Coverage Scantrack categories only ie excludes fresh, random weighted etc

  19. Increased advertising of Private Label by the retailers, focussing on quality and value for money. The new Supervalu Range Aldi – ‘Like brands. Only cheaper.’ Own Label “brand building” by the Retailers focussing on qualityand value for money Tesco – new ‘Everyday Value’ range Lidl – ‘Quality for Less’ Source: Nielsen Media 2012

  20. Household 35% Share Bakery 24% Share Grocery 35% Share Frozen 52% Share Private Label remains weakest in Health & Beauty and Alcohol, categories where there is some of the highest investment in brand equity. Confectionary 17% Share Wine 16% Share Health & Beauty 12% Share Source : Strategic Planner June 2012, Total Available Coverage

  21. Shoppers are buying more Private Label, driven by price savings and good quality, and it is seen as the savvy choice. Reasons for buying PL Base: All store brand buyers n = 946 Ref: Q114/Q115 Source: Nielsen – ShopperTrends 2011 Ireland results

  22. 5 Winning Brands and Categories in the Recession

  23. +28% +15% +12% +11% +11% +10% +9% +8% +8% Trends in the top 20 fastest growing categories show consumers looking for value @ home options. Cheaper options Loose Tobacco Washing up Liquid Cooking Oils Carpet Cleaners Chocolate Spreads Peanut Butter Ignition Products Meat & Veg Extracts Canned Fish cooking dinner @ home preparing lunch @ home Nesting, home cleaning Source :Nielsen Strategic Planner June 2012, Total Available Coverage, Value (exc H&B)

  24. On to Off-trade switch continues as consumers cut back on big night out for big nights in. 1% fall in consumption of LADs overall. On-Trade-6% (LAD: beer, cider, perry, spirit mixers, wine alter) Total OnTrade MAT to May 2012 VOL Off-Trade+6% (LAD: beer, cider, perry, spirit mixers, wine alter) Total Off incl Dunes MAT to May 2012 VOL

  25. There is still a place for Premium though, as trends in Ice Cream and Pet food show. Ice Cream Cat Food +1% +0% TOTAL TOTAL +27% +24% SUPER PREMIUM SINGLE SERVE SUPER PREMIUM Source: Nielsen Total Scantrackinc Discounters April 2012

  26. And Healthy products continue to perform ahead of their category in many cases. Source: Total Scantrackincl Discounters to 17/06/12 Value MAT % Chg

  27. 6 MultiScreen Trends

  28. Average 2011 daily viewing time per individual Ireland 3hr 25min USA 4hr 53min Europe 3hr 48min Ireland Q1 2012 viewing @3hr33min day is slightly below the EU 2011 average, and despite the changes remains dominated by live TV. IRE Average daily viewing time (Q1 2012) 3hr 33min individuals 2hr 27min children 3hr 57min women 92% of content is watched live 97% of content is viewed on same day as live 99% of content has been watched by day 3 Based on Q1 2012 average viewing Top rated TV show in IRE in 2011 was The Late Late Toy Show Adults preferred viewing day is Sunday, Children prefer Saturday (Q1 2012) Source: Nielsen TAM (Ireland), Eurodata TV - One TV Year In the World report

  29. Tablets is an emerging ownership in Ireland, with still lots of potential to grow. 12% 6% 9% 6% 3% 7% 3% 3% 12% 7% 7% 9% 16% 31% 18% 19% Tablets ownership and purchase intentions* EU GB Global Ireland As reported by Ireland online respondents in the survey* Source: Nielsen – Global Online Survey MultiScreen Trends Q3 2011

  30. Ireland’s ownership of Smartphones has doubled year on year. 36% 41% 30% 34% 9% 5% 4% 4% 12% 7% 8% 9% 43% 52% 57% 47% Smartphone ownership and purchase intentions* GB EU Ireland Global As reported by Ireland online respondents in the survey* Source: Nielsen – Global Online Survey MultiScreen Trends Q3 2011

  31. 7 Advertising Trends

  32. Advertising Spend has continued to decline markedly. Total FMCG category Ad Spend -7% Total FMCG € Sales -0.1% Avg % on promo 34% Total Overall Ad Spend -6% PL Value Share 21% Total Supermarkets Ad Spend -4% Total FMCG Unit Sales -0.3% Source: Nielsen Strategic Planner and Nielsen Media 2012 Source: Nielsen All Media AdDynamix May 2012, Nielsen Scantrack

  33. -7% -6% -1% +6% -3% Top FMCG categories % yoy -16% -18% +21% +16% -13% -28% FMCG categories increasing Ad Spend are Prep Convenience Foods, Hair, and Personal Hygiene. FMCG - Ad Spend By Category Source: Nielsen Media May 2012 (All Media: TV, Press, Radio, Outdoor & Cinema – excludes Online)

  34. 34% of pack sales on promotion Summary 2. Promotions are a fact of life - Be Smart and Selective 1. Consumers still have no spare cash, value is key 3. PL will continue to grow where brands cannot differentiate 4. Capitalise on the consumer trends Big Nights in, not out Easy Cook Meals and Lunch options @ home Appeal to Nesting instincts Premium /Healthy Levers Continue to invest in NPD Cheaper options 5. Connect with your consumers - when others aren’t

  35. Thank You!

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