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Consumer Trends

Consumer Trends. Intro. The following slides identify the key consumer trends influencing new product development: Health and Nutrition Natural/Organic Ethnic Flavors as mainstream Snacking Convenience Handheld/portable. Health and Nutrition. Trend toward total wellness, inside and out

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Consumer Trends

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  1. Consumer Trends

  2. Intro • The following slides identify the key consumer trends influencing new product development: • Health and Nutrition • Natural/Organic • Ethnic Flavors as mainstream • Snacking • Convenience • Handheld/portable

  3. Health and Nutrition • Trend toward total wellness, inside and out • products enriched with vitamins, antioxidants • Balance • portion control meals and snacks • indulging in small ways • Products formulated for older consumers • nutrition advantages • easy to handle and consume (packaging) Mintel “10 trends for next 5 years”, 2006

  4. Health/Nutrition 2 trends: convenient, portion-controlled package Salmon – package claim of heart healthy Omega-3 fatty acids Brownwood Acres Blueberry Juice Concentrate – touts health benefits including anti-aging and alzheimer’s, cancer prevention and urinary tract health Nabisco 100 calorie packs

  5. Natural/Organic • Natural/organic foods are expected to grow 63% to more than $46 million by 2010 (Progressive Grocer, 5/24/06) • 2005 natural/organic sales were $28.3 billion • 57% of consumers purchase natural products. (Mintel/SPINS/ICR 2004. Base 1008 adults, 18+) • Beginning in late 2006, Wal-Mart plans to roll out a complete selection of natural and organic foods in its nearly 4,000 stores. (New York Times, 6/4/06)

  6. Natural Hormel Natural Choice Deli Meats Whole Foods Natural Angus Beef Burgers 7-Up All Natural

  7. Ethnic Flavors are Mainstream • 7 of 10 shoppers 25-39 purchase ethnic foods at least once a month. (FMI “Trends in the United States”) • “Ethnic flavors are where it’s at. The Hispanic population is the fastest growing ethnic group and they are influencing trends. Jicama, cilantro, chipotle, and jalapeno have all become mainstream ingredients in casual restaurants due to this trend.” Brian Kolodziej, Director of Culinary, Bennigans • “Bold new flavors are hot. People want a spicier taste profile so ingredients like habanero and chipotle peppers have become common. Pan Asian, beyond Chinese, is very hot. Curry and Indian flavors are also emerging. Teriyaki is holding its own.” Andy Johnston, Schwan’s Foodservice

  8. Ethnic Stouffer’s Wok Frozen Meals Jose Ole Frozen Taquitos Ethnic Gourmet Lemongrass & Basil Chicken

  9. Snacking • Busy lifestyles have changed traditional eating habits • Americans will miss almost 150 core meals/year by 2010* • average consumer skipped 62 lunches in 2005; will increase to 65 by 2010 • average consumer skipped 59 breakfasts in 2005; will increase to 64 in 2010 • Making up for core meals with more frequent snacking* • Out-of-home evening snack market is worth $137 billion in sales, second only to lunch ($148 billion) • Snacks are versatile • “We have a beef Monster Taco and a regular taco on our snack menu. Snacks cross all demographics. They’re being ordered as both snacks and meals.” Jim Broussalian, Jack In the Box *Source: Food Institute Report 4/17/06

  10. Snacking McDonald’s chicken snack wrap to launch this month. Chicken strip wrapped in small tortilla with lettuce, cheese and ranch sauce. Designed to appeal to late night and in-between-meals diners. Power Bar Nut Naturals McDonald’s Chicken Snack Wrap Oberto Beef Jerky Crisps

  11. Convenience • Consumers are time-starved • 68% of married mothers and 75% of single mothers with children under 18 are employed • Both parents work in 63% of “married with kids” families • Women work an average of 7 hours a day (men 8) • One in five adults bring work home • Women spend an average of 3.5 hours a day doing household chores U.S. Bureau of Labor Statistics and Census

  12. Convenience • 44% of all weekday meal preparation requires 30 minutes or less (NPD National Eating Trends and Snack Track) • Product features that highly influence food purchase decisions (Yankelovich Partners, 2004): • Ease of preparation 62% • Resealable packaging 41% • Freshness dating 35% • Ease of clean up 30% • Ease of opening 27% • Pre-cooked 16%

  13. Convenience Products: Where in the Store? • Refrigerated convenience foods are outpacing sales of both frozen and shelf-stable meal solutions. • Dollar sales % change versus year ago, Food, Drug & Mass (including Wal-Mart) • +8.2% Refrigerated • +4.7% Frozen • +2.5% Shelf-Stable • Much of this growth is coming from side dishes

  14. Refrigerated Convenient Meal Solutions +79.0% Dollar Sales % Change vs. Prior Year Food, Drug, Mass (including Wal-Mart) +18.1% +16.5% +6.7% +6.1% +5.6% Side Dishes Prepared Salad/Fruit/Coleslaw Handheld Entrees Fresh Cut Salad Dinners/ Entrees Pizza IRI Times & Trends: Convenience Products, October 2005

  15. Frozen Convenient Meal Solutions Dollar Sales % Change vs. Prior Year Food, Drug, Mass (including Wal-Mart) +18.2% +8.2% +7.3% +3.1% +1.8% Multi-Serve Dinner/ Entrees Handheld Entrees Side Dishes Single-Serve Dinners/ Entrees Pizza -6.2% Pot Pies IRI Times & Trends: Convenience Products, October 2005

  16. Shelf Stable Meal Solutions Dollar Sales % Change vs. Prior Year Food, Drug, Mass (including Wal-Mart) +25.9% Dry Salad/ Side Dish Mix Dry Dinner Mixes with Meat +4.5% +4.4% +3.9% Dry Soup +3.5% +2.4% +0.7% +0.6% +0.5% Prepared Chili Prepared Pasta Dry Dinner Mixes (add meat) Micro-wave Pkg Dinner Dry Mac & Cheese Mix Prepared Dinners/Entrees Condensed Wet Soup -2.1% -2.5% Instant Breakfast Ready-to-Serve Wet Soup -29.5% IRI Times & Trends: Convenience Products, October 2005

  17. New Product Pacesetters - Convenience Items • Convenient meal and snack solutions are prevalent in the annual New Product Pacesetters Lists • 2004 New Product Pacesetters (Millions $) • CarbSmart ice cream & frozen novelties  $137 • Pepsi Vanilla & Diet Pepsi Vanilla soft drinks   $125 • Diet Coke with Lime soft drink   $119 • Sprite Remix soft drink   $113 • Yoplait Nouriche yogurt breakfast smoothie   $89 • Smirnoff Twisted V flavored malt beverage   $83 • Healthy Choice Flavor Adventures frozen dinners   $80 • Nabisco Ritz Chips crackers   $76 • Dannon Light ‘n Fit Carb Control dairy-based smoothie & cups $75 • Mountain Dew LiveWire soft drink   $72 Source: IRI InfoScan® Reviews

  18. New Product Pacesetters - Convenience Items • 2005 New Product Pacesetters (Millions $) • Slim-Fast Optima diet line $166 • Budweiser Select beer $123 • Frito-Lay Light salty snacks $112 • Nabisco 100 Calorie Packs $107 • Cherry Vanilla Dr. Pepper soda $107 • Kraft Carb Well multi-category line $89 • Bertolli Dinner for Two frozen skillet dinners $88 • Gatorade Lemonade $80 • Coke C2 mid-calorie cola $77 • Banquet Crock-Pot Classics frozen dinners $71 • “Quick and easy is no longer enough – multiple benefits including nutrition, greater portability, quality and value are all expected.” IRI Times & Trends: Convenience Products, October 2005

  19. Convenience Oscar Mayer Fast Franks Banquet Crock Pot Classics Bertolli Skillet Dinners for Two

  20. Convenience • Reasons why consumers purchase convenient foods • to save prep time 70.1% • portability 55.9% • individual packaging 34.4% Stagnito’s New Product Magazine, May 2004

  21. Handheld/Portable • Where are portable foods consumed? (Stagnito’s New Product Magazine, 2004) • at home 72% • in the car 44% • at the office 39% • at a recreational activity 17% • at school 14% • Commuters spend more than 100 hours in their car a year (U.S. Bureau of Labor Statistics and Census) • Average commute time is 25.5 minutes • 3.4 million Americans have a commute that takes 90 minutes or longer each way. • This is the fastest growing segment of commuters

  22. Handheld/Portable • Only 60% of meals are prepared and eaten at home (NPD National Eating Trends) • 78% of households order carryout or delivery at least once per month (Business and Industry Magazine, 5/2004) • 17% of all supermarket shoppers eat their main meal away-from-home at least three times/week (Food Marketing Institute) • 72% of meals purchased at QSRs are taken “to go” (NPD Data) • Applebee’s “Curbside To Go” has become the fastest growing part of the company’s business (Applebee’s Annual Report, 2004)

  23. Handheld/Portable Kraft Philadelphia To Go (bagel kit) Nestle/Chef America Hot Pockets

  24. Handheld/Portable Cheez-It Gripz (rip-and-tip package for one-hand eating) Yoplait Go-Gurt (portable yogurt tubes)

  25. Handheld/Portable Wild Garden Hummus to Go Cocoa Puffs Go Bags Kellogg’s Special K Drink N Crunch cereal cups

  26. Handheld/Portable Dreyer’s Dibs Ice Cream Snacks Smucker’s Uncrustables Grilled Cheese Sandwiches Dempster’s Ready-to-Eat Portable Waffles

  27. Handheld/Portable Campbell’s Soup at Hand Chef 5 Minute Meals (self heating, includes utensils, napkin, salt and pepper)

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