Pulse Report-FrozenFood-Q3-2013

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    PULSE REPORT

    IRI Pulse Report Frozen Food

    Welcome to the Pulse Q3 2013 edition for frozen food. We hope you

    find it useful. Please do not hesitate to contact us if you have any

    questions or comments at [email protected].

    Q3 2013

    IRIworldwide.eu

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    PULSE REPORT

    About the Report

    2

    This frozen food report is one of 10 super category reports designed to show high-level

    comparison and analysis for retail markets across major countries in Europe. This report contains data gathered from around Europe. This market was split into the

    following categories: frozen vegetables, frozen potato products, ice cream, frozen desserts,

    frozen meat, frozen fish, frozen ready meals and frozen dough and bread products.

    The report highlights key metrics, such as total sales figures, market trends, category

    share, winners and losers for Europe and for individual countries.

    The data has been sourced from IRI retail databases and Eurostat the statistical branch

    of administration for the European Commission.

    The countries included in the report are: France, Germany, Italy, the Netherlands, Spain

    and the United Kingdom.

    The market channels used for each country in this report are as follows:

    Country Channels used

    UK Hypermarkets, supermarkets, drug stores and impulse outlets.

    ESHypermarkets, supermarkets, hard discounters and drug stores;includes the Canary Islands.

    DE Hypermarkets, supermarkets, hard discounters and drug stores.

    NL Hypermarkets, supermarkets, hard discounters and drug stores.

    ITHypermarkets, supermarkets, small self service, hard discounters anddrug stores.

    FRHypermarkets and supermarkets.

    For analytical purposes the data sourced from available retail databases has been

    consolidated to provide consistent results. However, for some countries it was not possibleto source data pertaining to certain categories. Where this occurred, it has been

    documented in the Notes section found at the end of the report.

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    PULSE REPORT

    On the Radar

    3

    ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOR

    Source: Eurostat, September 2013

    Due to the ongoing difficult economicsituation Europe, shoppers continue toseek out cheaper meal solutions,impacting the frozen food trends acrossEurope. Inflation remains high and insome cases it is causing consumers to

    reduce or eliminate the purchase ofnon-essential items.

    POPULATION INMILLIONS

    UNEMPLOYMENT(%)

    AVERAGE 12MONTH

    INFLATIONRATES GDP IN MILLIONS ()

    Jan.2012

    Jan.2013

    Average2012

    Sep.2013

    Average2012

    Sep.2013 2012

    2013(Estimate)

    France 65.3 65.6 10.2 11.1 +2.5 +1.2 2 032 297 2 059 358

    Germany 80.3 80.5 5.5 5.2 +2.4 +1.8 2 644 200 2 694 499

    Italy 59.3 59.6 10.7 12.5 +3.5 +1.8 1 565 916 1 568 388

    Netherlands 16.7 16.8 5.3 7.0 +2.8 +3.1 600 638 604 459

    Spain 46.8 46.7 25.0 26.6 +2.3 +2.3 1 049 525 1 051 076

    UnitedKingdom 63.4 63.8 7.9 7.5 +3.7 +2.7 1 901 001 1 854 920

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    PULSE REPORT

    1 116 1 076 1 040 1 066 1 106 1 120

    602 680 535 468 562682

    247 233222 218

    248241

    945 1 018763 769

    912980

    2 092 2 005

    2 055 2 058

    2 1132 084

    954 964

    954 836

    914998

    0

    1,000

    2,000

    3,000

    4,000

    5,000

    6,000

    7,000

    01-jul-12 01-oct-12 30-dic-12 31-mar-13 30-jun-13 29-sep-13

    Millions

    Period Ending

    France

    Germany

    Italy

    Netherlands

    Spain

    UK

    GLOBAL TRENDS

    4

    -2.2%

    +3.8%

    +1.2%

    TOTAL EUROPE +1.0%

    VALUE SALES IN MILLIONS ()

    Total EU 22 945

    DE 8 310

    UK 4,332*

    FR 3 702

    IT 3 425

    ES 2 246

    NL 929

    TOTAL FROZEN FOOD VALUE SALES AND % CHANGE VS. PRIOR YEAR

    *based on an exchange rate of1.150 to the pound

    -3.2%

    +0.2%

    +1.2%

    TOTAL FROZEN FOOD VALUE SALES FOR THE LAST SIX QUARTERS

    Source: IRI retail databases; Period ending 29 September 2013

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    2 292

    6 556

    3 816

    4 829

    2 348

    0.4 2.3-2.4-0.49.1

    Frozen

    ReadyMeals

    IceCream

    FrozenFish

    Frozen

    Vegetables

    FrozenMeat

    Millions

    Total Sales % vs. YA

    16.6%

    10.0%

    7.7%

    28.6%

    0.0%

    1.7%4.1%

    21.1%

    10.2%

    Frozen Ready Meals Ice Cream Frozen Fish

    Frozen Vegetables Frozen Meat Frozen Potato Products

    Frozen Desserts Frozen Dough & Bread Products All Other Frozen Meats

    Europe

    5

    4 829

    3 816

    2 348

    1 768

    379

    6

    6 556

    2 292Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    Source: IRI retail databases; period ending 29 September 2013

    KEY TRENDS

    The pace of frozen food value growth

    across Europe slowed in Q3 2013, (+1.0%

    in Q3 versus +1.5% in Q2). Year-over-

    year trends show an even more marked

    slowdown.

    All countries except the United Kingdom

    experienced this slowdown quarter versus

    prior quarter. Northern states are

    performing better than their Southern

    neighbours.

    Whilst the economy is a key driver of the

    downward trend, it is not the only

    influence. For instance, in Germany

    volume grew whilst other countries are

    experienced market volume declines.

    The largest category in frozen, ready

    meals, saw volume declines in Q3 (-0.4%),

    in contrast to increases posted in the first

    two quarters of the year (+1.5% in Q1;

    +0.3% in Q2).

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    PULSE REPORT

    Europe

    6

    CATEGORY INSIGHTS

    Frozen potato products is a key driver of frozen food sector growth across Europe.

    Beneath this topline trend there are some differences across the individual countries. For

    instance, United Kingdom growth is fuelled by inflation with volume in decline, whilst inFrance the market is a much more positive picture growing both on value and volume terms.

    Ice cream: weather being the key driver of this category, the good summer we experienced

    across Europe boosted demand. Spain and Italy were an exception, experiencing value

    declines (-6.5% and -5.2%, respectively) as shoppers cut back on impulse categories.

    Frozen ready meals are suffering from a lack of innovation, good summer weather (which

    has favored lighter meals) and the continuous switch to cheaper solutions and scratch

    cooking.

    The decline of frozen fish has accelerated in Q3, to -2.4%. This is the only category showing

    a negative trend across Europe. Value sales declines are being heavily influenced by the highuse of promotions to maintain consumer participation in the category as fish becomes

    increasingly expensive. Despite high levels of promotion volume sales continue to decline.

    The category is under further pressure from the bad press affecting the fish industry (e.g.,

    salmonella, heavy metals).

    Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom

    Source: IRI retail databases; period ending 29 September 2013

    TOP LOSERS: VALUE SALES

    CHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALES

    CHANGE VS. YR. AGO ()

    191.4

    101.0

    53.1

    20.0

    1.0

    0 50 100 150 200 250

    Frozen Meat

    Frozen Potato Products

    Frozen Vegetables

    Ice Cream

    All Other Frozen Meats

    Millions

    - 0.9

    - 8.1

    - 10.1

    - 93.8

    - 29.5

    -100 -80 -60 -40 -20 0

    Frozen Poultry

    Frozen Desserts

    Frozen Dough & Bread

    Products

    Frozen Ready Meals

    Frozen Fish

    .Millions

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    PULSE REPORT

    371438

    834

    667

    970

    -0.5-2.6 -2.66.31.5

    Frozen

    ReadyMeals

    IceCream

    FrozenFish

    FrozenMeat

    Frozen

    Vegetables

    Millions

    Total Sales % vs. YA

    France

    7

    KEY TRENDS

    Frozen food volume sales continue to decline

    quarter-over-quarter: Q3 -1.5% versus

    -0.7% in Q2.

    Value growth remains consistent this quarter

    (+0.2% versus +0.3% in Q2), but the frozen

    foods sector in France is demonstrating the

    lowest level of growth across the FMCG

    markets.

    Inflation remains a key factor within this

    market, while others food and non-food

    markets are deflationary (except drinks).

    Frozen food prices increased an average0.9% in Q3 versus +1.4% in Q2.

    Despite the price inflation, private label is

    losing market share at a faster rate versus

    other FMGC sectors. Nonetheless, private

    label is still a dominant force within frozen

    foods, representing almost 1 out of 2 spent

    on frozen market higher than other

    markets.

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    Source: IRI retail databases; period ending 29 September 2013

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    18.0%

    10.0%

    9.1%

    26.2%

    0.3% 2.0%

    22.5%

    11.8%

    Frozen Ready Meals Ice Cream Frozen Fish

    Frozen Meat Frozen Vegetables Frozen Potato Products

    Frozen Desserts Frozen Dough & Bread Products

    834

    667

    438

    371338

    73

    11

    970

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    France

    8

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Source: IRI retail databases; period ending 29 September 2013

    25.8

    12.9

    11.9

    1.1

    0.6

    0 5 10 15 20 25 30

    Frozen Meat

    Frozen Potato Products

    Ice Cream

    Frozen Dough & Bread

    Products

    Frozen Desserts

    - 1.8

    - 25.8

    - 17.7

    -100 -50 0

    Frozen

    Vegetables

    Frozen Fish

    Frozen Ready

    Meals

    .Millions Millions

    CATEGORY INSIGHTS

    Frozen meat once again leads the way in value growth across the frozen foods sector,

    +6.3% versus +6.4% in Q2. Growth is being driven by private label, which is contributing to

    53% of total growth. National brand, Charal, also performed well, contributing 23% of

    growth.

    Frozen potatoes is doing well, with 100% of growth coming from regular shelf sales. Due to

    the poor harvest of this year, it looks likely that 2014 will be another year with little

    promotional support. McCain drove 66% of category growth, making this brand a driver of

    overall frozen foods sales.

    Ice cream : After a difficult start to the year not helped by poor weather, good supported

    value sales growth of +1.5% in Q3, versus +0.9 the prior quarter.

    Frozen dessert: the introduction a few years ago of Marie, a major player in frozen food,

    continues to revive the category. Category growth is being supported by strong promotionalactivity.

    Frozen ready meals have been negatively impacted by the good weather, with value sales

    falling -2.6% in Q3 (versus-1.9% in Q2), despite media investment.

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    PULSE REPORT

    586

    2 954

    1 278

    1 569

    752

    13.3

    3.23.41.2 -0.5

    Frozen

    ReadyMeals

    FrozenMeat

    IceCream

    FrozenFish

    Frozen

    Desserts

    Millions

    Total Sales % vs. YA

    Germany

    9

    KEY TRENDS

    In Germany, frozen foods are demonstrating

    above-average growth (+3.8% versus Europe

    growth of +1.0).

    Inflation is a primary growth driver, as

    volume sales were largely flat (+0.5%). Base

    sales (volume) are growing, off-setting a

    decline in promotional volume sales.

    Meanwhile, value sales are growing at both

    base and promotional levels.

    Discounters (driven by Lidl) registered the

    strongest frozen foods sales, followed by

    hypermarkets. Meanwhile, supermarketsdemonstrated sales declines.

    Private label frozen foods are enjoying value

    and volume sales growth, whilst sales of

    branded products are in decline.

    Frozen meat is the top-performing frozen food

    category in Germany. Desserts and frozen

    dough and bread products showing declines.

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    Source: IRI retail databases; period ending 29 September 2013

    6.6%

    7.1%

    15.4%

    35.5%

    2.5%

    4.9%

    18.9%

    9.0%

    Frozen Ready Meals Frozen Meat Ice Cream

    Frozen Fish Frozen Desserts Frozen Vegetables

    Frozen Potato Products Frozen Dough & Bread Products

    1 569

    1 278

    752586 551

    410

    210

    2 954

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    Germany

    10

    CATEGORY INSIGHTS

    Poultry is the major growth contributor of growth within the frozen meat category.

    Discounters are enjoying particularly strong category growth, contributing to more than 70%

    of growth within frozen meat.

    Private label is the clear winner within the frozen meat. Private label market share

    increased +5 points, and private brands now hold 59% (value) of the market. The frozen dough and bread products category has seen a decline of -6.7% in base sales,

    driving a sharp downward sales trend. An increase in promotional activity has been unable to

    reverse the slide. The further expansion of bake-off stations within the hard discounter

    channel is also contributing to category challenges.

    Among frozen desserts only sweet foods are showing positive growth. This growth is not

    strong enough to offset declines posted in the cake/pie/pastry and fruit segments.

    Price inflation is supporting ice cream value growth, whilst volumes remain static. Frozen

    fish also has experienced price inflation with downward trending volume.

    Within frozen ready meals, the pizza/baguette segment is in slight decline whilstready/partial meals, supported by double-digit value growth in the Lidl banner, is showing

    positive value growth. Meanwhile, volume continue to decline. Private label is performing

    well in the frozen foods sector and is contributing the overall strong performance of private

    label within frozen food.

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Source: IRI retail databases; period ending 29 September 2013

    Millions

    18.6

    23.1

    35.3

    41.4

    183.6

    0 50 100 150 200

    Frozen Meat

    Ice Cream

    Frozen Ready Meals

    Frozen Fish

    Frozen Potato Products- 12.0

    - 2.7

    -15 -10 -5 0

    Frozen Desserts

    Frozen Dough & Bread

    Products

    .Millions

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    Italy

    11

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    Source: IRI retail databases; period ending 29 September 2013

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    3,2% 3.3%

    20.3%

    29.6%

    0.9%1.0%

    23.0%

    18.7%

    Ice Cream Frozen Fish Frozen Vegetables

    Frozen Ready Meals Frozen Meat Frozen Potato Products

    Frozen Desserts Frozen Dough & Bread Products

    789

    696641

    110

    34 30

    1 013

    112

    112

    1 013

    696

    789

    641

    -3.7 -0.61.4-5.2-0.5

    IceCream

    FrozenFish

    Frozen

    Vegetables

    Frozen

    ReadyMeals

    FrozenMeat

    Millions

    Total Sales % vs. YA

    KEY TRENDS

    Due to persisting economic slowdown, most

    markets are experiencing falling value and

    volume sales.

    While the performance of FMCG overall

    improved slightly during Q3, frozen food

    sales are declining at an accelerating pace

    (-3.7% in value, -3.1% in volume).

    The short term trend driven by price

    inflation seen over recent months after a

    long period of stability.

    Promotional activity is relatively stable

    across most frozen foods categories. Icecream is an exception. Promotional support

    increased more than three points versus

    levels seen in 2012.

    Discounters performed well in frozen foods

    in Q2 2013, but Q3 activity has declined.

    Though frozen vegetables are showing year-

    over-year growth, Q3 sales declined.

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    Italy

    12

    CATEGORY INSIGHTS

    Frozen meals: Q3 2013 value sales declined -3.0%, driven heavily by double-digit declines in

    pasta-based first dishes due to shifting consumer behaviors (selection of less expensive

    alternatives). Fish-based dishes sold through market leader Findus grew 12%. Meanwhile,

    pizza trends are flat, consistent with Q2 trends.

    Frozen fish: Q3 2013 value sales -4.0%, driven mainly driven by declines in natural fish(-4.7% in Q3). Additionally, persisting economic challenges continue to deter shoppers from

    expensive categories. Coated prepared fish slowed decline trends (-0.8% on Q3) with stronger

    promotional support from Findus as well as the launch of a fish burger.

    Frozen vegetables: Q3 2013 value sales -3.1%; bad weather helped the market to grow

    quarter on quarter but in Q3 all segments show a declining trend both in volume and value ;

    Frozen vegetables are seeing increased pressure from fresh vegetables, which are being

    bolstered by significant deflationary prices. Additionally, spinach and mixed vegetables, which

    were strong in previous quarters, saw declines in Q3, driven by a decrease in promotional

    support and inflationary prices.

    Ice cream: Q3 2013 value sales -4.3%. Bad weather and conservative purchase behaviors(specifically the reduction/elimination of non-essentials) had a significant negative impact on

    the ice cream category in Q3. Additionally, innovation has declined (new product development

    (NPD) contributing to 7% in 2013, versus 9% in 2012). All ice cream segments, with the

    exception of multipack cones [(+5.2% on Q3 2013) supported by increased promotional

    support] experienced strong volume declines in Q3.

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Source: IRI retail databases; period ending 29 September 2013

    Millions

    1.0

    5.4

    9.5

    0 2 4 6 8 10

    Frozen Vegetables

    Frozen Potato Products

    Frozen Desserts

    - 55.3

    - 3.9

    - 3.0

    - 0.6

    - 30.6

    -60 -50 -40 -30 -20 -10 0

    Frozen Meat

    Frozen Dough & Bread

    Products

    Frozen Ready Meals

    Frozen Fish

    Ice Cream

    .Millions

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    74

    389

    116

    205

    94

    5.0 1.9-4.5-0.3

    7.2

    Frozen

    ReadyMeals

    IceCream

    FrozenFish

    Frozen

    Potato

    Products

    Frozen

    Vegetables

    Millions

    Total Sales % vs. YA

    Netherlands

    13

    KEY TRENDS

    In the Netherlands, frozen food value sales

    grew 1.0% year-over-year. However,

    comparing Q3 2013 to the same quarter in

    2012, value growth accelerated to 3.5%,

    driven by the strong performance of ice

    cream.

    The growth rate in the frozen market is equal

    to the non-food market, but is lower than in

    the rest of the food market.

    In value terms, the largest relative growth

    can be attributed to frozen vegetables.

    Furthermore, the dough and bread productshave grown significantly in both value and

    volume.

    Discounters and service supermarkets are

    growing at the same rate. Besides the

    categories mentioned above, discounters are

    performing well in potato products.

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    Source: IRI retail databases; period ending 29 September 2013

    2.2% 8.0%

    12.6%

    42.2%

    0.5%

    0.7% 1.3%

    22.3%

    10.2%

    Frozen Ready Meals Ice Cream Frozen Fish

    Frozen Potato Products Frozen Vegetables Frozen Desserts

    Frozen Dough & Bread Products All otherFrozen Meats Frozen Poultry

    205

    11694

    2112 6 4

    389

    74

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    CATEGORY INSIGHTS

    The top winning categories had a combined growth of 17,7 million versus last year. Growth

    is mainly attributable to increasing levels of demand for ice cream due to good summer

    weather. Growth in frozen vegetables can mainly be attributed to price inflation. Sales

    decline for the top losers equals 8,0 million and is driven mainly by the frozen fish segment.

    Ice cream continues to grow in value and volume across all segments. Still, the largestgrowth can be contributed to the introduction of a single serve spoonable ice cream

    introduced by Unilever. Despite being a cheaper alternative, frozen ice lollies are declining in

    value terms within service supermarkets.

    The largest frozen food sector declines are visible in frozen fish. Frozen fish value sales are

    declining, and despite lower prices, volume remain under pressure. The most significant

    decline is seen in prepared fish products. The fresh fish segment is also showing a downward

    trend, largely due to an outbreak of salmonella bacteria which was found in salmon sold in

    the Dutch market.

    Frozen meals, which mainly consists of pizza, are under pressure in service supermarkets.

    Dr. Oetker is showing a decline, with lower levels of new product development (NPD)compared to last year along with less promotional support. Furthermore, price increases at

    Wagner have had negative impacted on volume. Snacks continue to grow in value, but this is

    only due to price inflation. The one exception is hamburgers, which still show volume growth,

    which is often viewed as a low-cost meat alternative.

    Netherlands

    14

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Source: IRI retail databases; period ending 29 September 2013

    Millions

    1.0

    1.8

    5.0

    9.9

    0 2 4 6 8 10 12

    Ice Cream

    Frozen

    Vegetables

    Frozen

    Potato

    Products

    All

    otherFrozen

    Meats

    - 5.5

    - 0.9

    - 0.4

    - 1.2

    -6 -5 -4 -3 -2 -1 0

    Frozen

    Desserts

    Frozen

    Poultry

    Frozen Ready

    Meals

    Frozen Fish

    .Millions

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    Spain

    15

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEAR

    CATEGORY SHARE OF VALUEIN THE LAST YEAR

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    Source: IRI retail databases; period ending 29 September 2013

    24.4%

    5.2%3.2%

    32.7%

    0.2%

    0.4%

    26.2%

    7.8%

    Frozen Fish Ice Cream Frozen Ready Meals

    Frozen Vegetables Frozen Dough & Bread Products Frozen Potato Products

    Frozen Desserts Frozen Meat

    588547

    175

    72

    9 4

    734

    117

    117

    734

    547588

    175

    -6.5 -3.9-1.7-3.3 3.0

    FrozenFish

    IceCream

    FrozenReady

    Meals

    Frozen

    Vegetables

    FrozenDough

    &Bread

    Products

    Millions

    Total Sales % vs. YA

    KEY TRENDS

    Quarter-on-quarter frozen foods value

    sales fell -3.2% in MAT, whilst volume

    sales slid -2.8%.

    The September tax increase in September

    2012 is putting pressure on sales.

    Declines across several key frozen food

    categories, fish and seafood (-3.2%),

    pizzas (-0.8%) and ice cream (-6.5%) are

    contributing heavily to frozen food

    declines.

    Though private label holds a 57.7% share

    of frozen food sales, declines in privatelabel sales are sharper than branded

    alternatives (-2.8% and-3.0%,

    respectively).

    During the last few months the

    manufacturer, Pescanova, has been

    plagued by negative publicity due to

    corporate issues and financial audits.

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    Spain

    16

    CATEGORY INSIGHTS

    Nestle is the leading frozen manufacturer, but sales declined -8.6% (value) and -9.2%

    (volume) in Q3. Pescanova, the second-largest manufacturer, maintained sales (+0.1%

    value) despite its recent problems. The third largest frozen food manufacturer, Unilever,

    experienced a value sales decline of -8.7% in Q3..

    The new Findus Group (Findus+Bonduelle) will change the assortment and the mix ofvegetables and ready-to-eat categories, becoming a brand leader in many sectors. Still,

    sales trends remain negative (-7.9%, value and -9.9%, volume).

    Pizza category growth has slowed, as value sales declines at Dr. Oetker were not able to

    completely offset losses at Nestle. Combined, the manufacturers hold more than 5% share of

    the category (-3.7% versus year ago). Nestles share is 27.7% (-13%, value). Dr. Oetker

    holds 31.2% share (+4.8%, value).

    Ice cream: Unilever is the market leader, with 16.5% share of value sales. However, sales

    fell -8.7% due to private labels dominance in the category (69% value share, +5.8%;

    volume share of 85%).

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Source: IRI retail databases; period ending 29 September 2013

    Millions

    3.4

    5.8

    0 2 4 6 8

    Frozen Potato Products

    Frozen Dough & Bread

    Products

    - 40.7

    - 9.7

    - 7.1

    - 0.4

    - 25.2

    -50 -40 -30 -20 -10 0

    Frozen Meat

    Frozen

    Vegetables

    Frozen Ready

    Meals

    Frozen Fish

    Ice Cream

    .Millions

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    United Kingdom

    17

    KEY TRENDS

    The frozen market in the UK continues to grow

    in value terms, whilst volume is in decline.

    The growth in value driven by inflation. Volume

    declines are consistent with general declines in

    consumption that is occurring across many

    ambient categories.

    McCain Food is contributing to overall negative

    volume trends, which are resulting from

    increasing prices and lower levels of deal this

    year. Walls & Aunt Bessies the only major

    manufacturers to grow in volume terms.

    As purse strings are tightened, one wouldexpect private label to cash in but, at a total

    private label level, this is not the case.

    However, some categories, such as frozen

    potato, are benefitting from inflation and

    declining promotional support of branded

    solutions.

    Euros,

    inMillions

    CATEGORY VALUE SALESIN THE LAST YEARCATEGORY SHARE OF VALUE

    IN THE LAST YEAR

    TOP 5 CATEGORIES: EVOLUTION

    Value sales () and % change vs. year ago

    5.0%11.1%

    17.5%

    24.3%

    3.9%

    21.0%

    17.2%

    Frozen Ready Meals Ice Cream Frozen Fish Frozen Potato Products

    Frozen Vegetables Frozen Desserts Frozen Meat

    910

    758 744

    216 169

    1 054

    481

    481

    1 054

    758

    910

    744

    6.2 8.2-4.8-2.2

    6.5

    Frozen

    ReadyMeals

    IceCream

    FrozenFish

    Frozen

    Potato

    Products

    Frozen

    Vegetables

    Millions

    Total Sales % vs. YA

    Source: IRI retail databases; period ending 29 September 2013

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    CATEGORY INSIGHTS

    Ice cream has benefitted by the good weather over the summer in the UK, resulting in an

    increased demand and higher promotional efficiencies, particularly throughout July.

    Frozen potato remains a key growth category within frozen food, fuelled by price inflation.

    With less promotional activity notably off shelf, the category has failed to attract the lighter

    potato buyers, resulting in volume losses. Private label is cashing in, as shoppers have tradeddown due to increasing prices among branded solutions.

    Ready meals: Sales of frozen pizzas are driving growth driven by the likes of Chicago

    Towns Deep Dish & Takeaway, fuelled by their high levels of promotional activity. Standard

    ready meals continue to struggle, with retailers concentrating on their private label chilled

    offering with well-advertised dine in meal deals. The good weather has had a negative

    impact on the sales of traditional meals and their components, as consumers switch to lighter

    meals, such as salads, cooked meats and barbecues.

    Vegetables: Value growth continues to be driven by inflation and NPD, with volume

    relatively static. NPD is focusing on convenience and added value, such as single serving

    steam/microwavable pouches. As mentioned above, demand for frozen vegetables declinedas the temperatures rose in the UK.

    Fish: With demand declining and the category being de-valued by Birds Eye and Youngs,

    aggressive tactical promotional strategies are contributing to both value and volume continue

    to decline. Sales of fresh fish grew slightly, but not enough to make up losses from frozen

    fish. Despite the well publicised health benefits as a nation, the UK are eating less fish.

    United Kingdom

    18

    Source: IRI retail databases; period ending 29 September 2013

    TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO ()

    TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO ()

    Millions Millions

    29.3

    52.8

    56.5

    0 10 20 30 40 50 60

    Frozen Potato Products

    Ice Cream

    Frozen Vegetables

    - 37.8

    - 17.1

    - 6.4

    - 24.2

    -40 -30 -20 -10 0

    Frozen

    Desserts

    Frozen Meat

    Frozen Ready

    Meals

    Frozen Fish

    .

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    Final Notes

    19

    Notes on Category Definitions for Countries

    Due to the diverse products found in individual countries across this market, it was necessaryto consolidate the available data into the categories in this report. In some cases it wasnt

    always possible to align products across all 6 countries, hence the need to highlight any

    anomalies in the report. Those exceptions are listed below:

    Frozen Dough & Bread Products

    The UK data in this report does not include this category.

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    Resources

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    Please contact Isabelle Staquet,

    IRI at [email protected]

    +33 1 30 06 26 68 with questions or comments about this report.

    To gain insight into opportunities across specific categories, segments, channels or retailers,

    contact your IRI client service representative regarding custom analyses leveraging thefollowing resources:

    InfoScan Census is a syndicated retail tracking service that enables manufacturers and

    retailers to acquire industry insights used to make better business decisions. InfoScan

    Census utilises the data that IRI collects from grocery, drug, and mass merchandise retailers

    to provide the most comprehensive and accurate syndicated data offering in the FMCG

    sector. With access to accurate, granular detail by category, geography, measure, and time

    period, clients have the tools needed to develop marketing and sales strategies based on

    product performance, distribution, and promotion responsiveness. All data about frozen food

    comes from InfoScan Census.

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