SSG R360 Tapping Into TM Healthy Living Movement - 2014 Wellness Brand Awards_Full 8-15-14

2014 © Santiago Solutions Group, Inc. SantiagoSolutionsGroup.com 2014 © Santiago Solutions Group, Inc. SantiagoSolutionsGroup.com

Tapping Into the Total Market’s Healthy Living Movement:

Leveraging Similarities and Nuances

HISPANIC RETAIL 360 Summit Thursday, August 14, 2014

2014 Wellness Brand Awards

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SSG Wellness Spectrum is the joint property of GfK US, LLC and Santiago Solutions Group, Inc. ©2014 GfK US LLC. All Rights Reserved

2014 © Santiago Solutions Group, Inc. SantiagoSolutionsGroup.com

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Total Market Approach Consensus Definition

A marketing approach followed by corporations with their trusted internal and external partners which proactively

integrates diverse segment considerations. This is done from inception, through the entire strategic process and execution,

with the goal of enhancing value and growth effectiveness.

In marketing communications this could lead to either one fully integrated cross-cultural approach, individual segment

approaches, or both in many cases, but always aligned under one overarching strategy.

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Consistent with industry facts, since 2011, consumers are migrating out of Savvy Indulgents, into the Busy Strivers or Fit & Holistic. This represents many

opportunities for marketers and brand managers that may be hesitant to make healthy "tweaks" to their products or messaging.


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Factors Driving “Health” Consciousness & Higher Discernment for Products & Retailers

The Total Market demands Healthier products

Organic food sales grew 12% in 2013

Gluten-Free sales projected to jump from $1.3B in 2011 to $1.7B by 2015

Consumers’ want fresh, fast and healthy food and are avoiding a growing number of things which is driving new product & flavor innovation 4

From trans fats to gluten free

Artificial flavors, dyes and additives increasingly perceived as unhealthy

Clean label trend presents a significant fast-growing opportunity segment4

Government is pressuring companies to change at a faster pace

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1. April 30, 2014 warning labels were put on hold until California has a new state budget 2. Organic Trade Association 3. Euromonitor International 4. "U.S. Market for Flavors," July 2014 Packaged Facts report MarketResearch.com

2014 © Santiago Solutions Group, Inc. SantiagoSolutionsGroup.com GfK MRI

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Best-In-Class Are Reaping Rewards Proactively

Aims to increase sales from “Good for You” portfolio to $30B annual sales by 2020 coming from $10B in 2010

Expanding its healthy-eating commitment by offering fruit and vegetables options as part of its meal deals and marketing healthier alternatives

Reformulating thousands of packaged food items by 2015 to lower sodium and added sugars

Gable, Lisa. "Of Waistlines And Bottom Lines." Dairy Foods 115.4 (2014): 90. Vizard, S. (2013). McDonald's vows to ramp up marketing of healthy options. Marketing Week (Online Edition), 5."Walmart Aims To Make Healthy Food More Accessible." Mmr 29.1 (2012): 29; Agnese, J. Industry Surveys: Foods & Nonalcoholic Beverages. S&P Capital IQ, McGraw Hill Financial. Brown, Abram. "All Hail The King: Burger King Quarterly Profit Jumps 60%." Forbes.Com (2012): 5.

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Food & Beverage Pacesetters Have Driven Innovation with Whole Grains, Natural, Real, & Organic Ingredients

6%

10%

31%

31%

37%

14%

22%

36%

39%

42%

Real vegetables, vegetable healthbenefits

Enriched with vitamins/calcium

Real Fruit, fruit health benefits

more natural/organic

Added/high fiber, whole/multi-grian,good source of fiber

Food and beverage Pacesetters Share of New Foods with Particular Ingredients

2013 2012

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FOOD AND BEVERAGE Reap sizable year-one sales with healthy ingredients. (2014). MMR, 31(7), 58.

IRI Market Advantage™, new products that completed their first year in calendar year 2013

↑5 pts.

↑8 pts.

↑5 pts.

↑12 pts.

↑8 pts.


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A New Powerful Tool Guiding ‘Healthier’ Brand Strategies

‘Bad Behavior’ Diseases

Diabetes II

High Cholesterol HBP

Obesity

Healthy-Unhealthy Lifestyle Choices

Attitudes &

Behaviors

Over 50% of all health related diseases/conditions are caused by diseases/conditions correlated with personal lifestyle choices

SSG modeled hundreds of healthy to unhealthy attitudes, behaviors that determine lifestyle choices leading to 4 major preventable chronic diseases and how these link

with the key causes of death in America.


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SSG Wellness ScoreTM powered by GfK MRI An Overlay Segmentation with Turnkey Applications

SSG Wellness Spectrum assigns each individual with a Wellness Score. This ‘FICO-like’ score is individually based on specific wellness attitudes & behaviors.

The individual Wellness Spectrum scores can be aggregated by brand, class of trade, channel, category, generational level, ethnicity, race, etc.

The Wellness Scores aids marketers to understand their buyers through wellness patterns, barriers, and engagement drivers to focus growth strategies on the appropriate level of wellness receptivity.

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300 400 500 600 700 800 850


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Wellness Personas Consumers Migrating from Savvy Indulgents to Busy

Strivers and Fit & Holistic

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Fit & Holistic live by the motto: “You are what you

eat and wear.” They understand and

incorporate healthy lifestyle choices. They

shop with the environment in mind,

purchasing organic food products and listen to the

doctor.

Busy Strivers make a great effort to balance their busy lives, yet are more driven

by convenience rather than health. They might try to sneak in a Pilates work out to shed some

excess pounds. They like to have semi-prepared foods, that require little

additional work.

Savvy-Indulgents are cost-conscious individuals who do not care to cook. You probably won’t find

these individuals at a gym but may catch them

playing some soccer with friends. They are hunters

in games, actions and mindsets and will not compromise taste for

wellness sakes.


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46

108

208

Always Check Nutritional Content Before I Buy

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125

272

Eat a healthy breakfast every day

73

109

149

Happy with My Weight

56

112

183 Look for New Ways to Live a

Healthier Lifestyle

Wellness Minded Consumers Over-index in Healthy Lifestyle, Attitudes & Decisions

10

.

Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Doublebase Survey of the American Consumer. Base: Total 18+ Health Attitudes: Agree Strongly; Buying Styles: Agree Mostly.

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75

113 137

Regular Dr. Visits

82 105

133 Walking

56

102

200 Yoga

84 106

128

Cycling

. .

. .

Wellness Minded Consumers Over-index in Healthy Behaviors

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Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Doublebase Survey of the American Consumer. Base: Total 18+ Sports- How Often Engaged In: Participated in Last 12 months; Health Attitudes : Agree Strongly.

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58

112

179 High Fiber

58

113

176 Low Sodium

62

116

162 Low Fat

63

113

166 Sugar Free

.

.

Wellness Minded Consumers Over-index in Healthy Food Choices

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Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Doublebase Survey of the American Consumer. Base: Total 18+ Diet control/eating habits: Buy food labeled as:

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108 100 81

Microwavable Dinners

89 104

120

Green Products

79 108

134

Vitamin & Dietary Supplements

115 94

76

Energy Drinks

.

.

Healthier Segments Over-Index In Healthier Categories

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Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Doublebase Survey of the American Consumer. Base: Total 18+; Bought in Last 6 months:


Wellness Scores Allow For Geographic To Individual-level Classification For 1-to-1 Personalization

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Fit & Holistic

Busy Strivers

Savvy Indulgents

Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Market to Market. Survey of the American Consumer

Wellness Scores can be identified for any group of Adults in the U.S. to enrich internal client databases or targetable email/mobile prospect lists through BigData vendors like Axciom, etc.


Healthier Consumers Choose Different Retailers Depending On Ethnicity

AFRICAN AMERICAN MILLENNIAL

HISPANIC WHITE NH

Source: SSG Wellness Spectrum™ Powered by GfK MRI 2012 Doublebase Base: Breakfast Buyers 18+ 15

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Healthier Segments Have Exponential Influencer Value

Healthier segments are more likely to be

Early Adopters & Trendsetters

Highly Influential among peers

Willing to experiment new products

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-16

8

22

Savvy Indulgents

Busy Strivers

Fit & Holistic-15

5

26

Source: SSG Wellness Spectrum™ Powered by GfK MRI 2012 Doublebase Base: Total 18+

GfK MRI 2014 © Santiago Solutions Group, Inc. SantiagoSolutionsGroup.com

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Among Breakfast Sub-Categories

Incidence is Inversely Related To Growth Wellness is Directly Correlated With Growth

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Source: SSG Wellness Spectrum™ Powered by GfK MRI 2012 Doublebase Base: Breakfast CPG Buyers 18+

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Breakfast Brands Cover the Spectrum of Wellness

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We

lln

ess

Sco

re o

f Bra

nd

Bu

yers

Breakfast Brands Ranking Lo to Hi

Each Circle represents a Breakfast Brand


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18% of Breakfast CPG Brands Have >-2% Growth & >110 Wellness Score Among Hispanics, Yet Only 6% Among WNH

-40%

-20%

0%

20%

40%

60%

80%

50 70 90 110 130 150

Hispanics: Wellness vs. Growth In Breakfast Category

-40%

-20%

0%

20%

40%

60%

80%

50 70 90 110 130 150

WNH: Wellness vs. Growth In Breakfast Category



50% 46% 41%

59% 64% 70%

SavvyIndulgents

Busy Strivers Fit & Holistic

WNH Frozen Breakfast Yogurt

49% 51% 46%

61% 66% 70%

SavvyIndulgents


HISP Frozen Breakfast Yogurt

53% 52% 47% 58% 62% 67%

SavvyIndulgents


Millennial

56% 56% 49%

40% 47% 47%

SavvyIndulgents


AA

Yogurt Purchase Incidence Driven by Fit & Holistic Frozen Breakfasts Driven by Savvy Indulgents

x x

x x x x



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1%

18%

-17%

-5%

2%

-2%

-7%

-4%

-10%

0%

16%

8%

-35%

-2%

-62%

MILL Fit & Holistic

MILL Busy Strive

MILL S&I

A/O Fit & Holistic

A/O Busy Strive

A/O S&I

BNH Fit & Holistic

BNH Busy Strive

BNH S&I

H Fit & Holistic

H Busy Strive

H S&I

WNH Fit & Holistic

WNH Busy Strive

WNH S&I

Dannon Activia: Share of Volumized Growth 2012-2013

Busy W Strivers Consistently Driving Growth in 2 Brands Facing Growth Challenges

24%

20%

18%

0%

2%

5%

10%

16%

-8%

-6%

34%

-6%

39%

-12%

25%

MILL Fit & Holistic

MILL Busy Strive

MILL S&I

A/O Fit & Holistic

A/O Busy Strive

A/O S&I

BNH Fit & Holistic

BNH Busy Strive

BNH S&I

H Fit & Holistic

H Busy Strive

H S&I

WNH Fit & Holistic

WNH Busy Strive

WNH S&I

Oatmeal Crisp w/raisins: Share of Volumized Growth 2012-2013



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22%

20%

13% 7%

8%

5%

7%

7% 5%

2% 2% 2%

19%

29% 26%

12%

8%

4% 2%

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Activia’s New Growth is coming from Busy Strivers and OCR’s Growth Is Coming Equally from Busy Strivers & Fit & Holistic

26%

23% 16%

7%

9%

5% 3%

4%

2% 2% 2% 1%

31%

61%

8%

Share of Base

Share of Growth Segments

Source: SSG Wellness SpectrumTM Powered by GfK MRI 2012 Doublebase Survey of the American Consumer. Base: Total 18+; Household Products- Used in Last 6 months

Millennials make up 30% of Dannon buyer base and 27% of Oatmeal Crisp

Millennials make up 100% of Dannon growth segments and 58% of Oatmeal Crisp w/ Raisins

Busy Strivers & Savvy Indulgents Generate about 3 in 4 of Both Brands Base Volume


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‘New Growth’ Personas vs. ‘Base Personas’ for Activia and Oatmeal Raisin Crisp

Current Base

New Growth • Driven by convenience • Enjoy unwinding activities

like yoga & cycling • Busy consumers • Mostly Hispanic consumers:

evenly split b/w English & Spanish dominance

• Hyper-connected & 100% Millennial

• Health driven consumer • Environmentally considerate • Majority of Hispanic

consumers exhibit Spanish dominance

• 6 in 10 are Millennial

• Physically Fit and Confident • Loves Organic and Green

Products • Loves Adventure

• Not secure in physical appearance

• Busy, but seek balance • Semi-prepared foods often

preferred


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Consumer Decision Journey

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Loyalty Loop INITIAL

CONSIDERATION SET

MOMENT OF

PURCHASE

Active Evaluation, adding & eliminating brands

Post-purchase Experience

1

2

3

4 Trigger

Source: McKinsey Decision Journey

Google’s Zero Moment of Truth

P&G’s 1st Moment of Truth

P&G’s 2nd Moment

of Truth


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TV Print Mag Internet Radio

107

117

52

117

137

80

104

109

67

Source: SSG Wellness Spectrum™ Powered by GfK MRI 2012 Doublebase Base: Breakfast Buyers 18+

129


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Activia Growth Segments Consistently More Digitally-Inclined vs Oatmeal Crisp

Awareness &

Consideration Trial & Action Loyalty & Advocacy

Objectives

Pa

th to

Pu

rch

ase


SM Deals 157 112

Nav/Map 155 63

Shop/Retail App 161 48

QR/Tag 147 101

Mobile Coupon 161 101

SM VIP 157 112

SM Fave Prods 168 130

Activia OCR

Search 152 67

Text Ad 157 121

SM Res Prod 143 99

Cell Ad 149 101

App 167 68

Res Prod 152 79

Activia OCR Activia OCR

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1-to-1 Marketing Promos Can Be Properly Aligned with Best Fit Retailers Via Mobile & In-Store Solutions

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Lo-Mid Tier SuperMkt Health/Natural Stores

Householder Fit & Holistic Busy Strivers Savvy Indulgents

-1%

9% Health/Natural

6% Membership W/H

5% Mass/Discount

3% Hispanic Grocery

2% Convenience

MID-TIER SUPERMARKETS

12% LOW-TIER SUPERMARKETS

RETAILER’S SHOPPER BASE ‘11-’13 CAGR RANKING

BY FORMAT

*CAGR = Compound Annual Growth Rate Source: SSG Longitudinal Analysis of Scarborough USA+ 2011 & 2013 R1

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Take-Aways

Macro Trends Tools Deep Dive

TM Insights Approach:

Wellness Predictability Planning-to-Action

Model

Hunger for Healthier ↑ Growth &

Profits

Breakfast CPG Sub-

Categories, Brands & Retailers

Share of Stomach Wellness Base Segments

Growth Wellness Segments Base & Growth Personas

Channel Selection Personalized Marketing

Path To Purchase

Individual Wellness Score Lifestyle Choices

Behaviors Food Choices Geography Retailers

Key Products Influencers

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Drivers • Consumers are becoming more discerning about wellness, demanding more natural, recognizable ingredients

• Best-in-class proactively leading and gaining share and growth momentum from healthy innovation

A data-rich wellness propensity tool can help food manufacturers & retailers to:

• Identify growth opportunities and inform high-value wellness shopper

segments in a Total Market approach

• Enhance ROI by better creating promo solutions that work best at right wellness target consumers

• Leverage digital platforms in path to purchase to increase pre-store relevancy motivators to drive traffic up to 1st & 2nd moments of truth

• Build a more dynamic test & learn’ capability

Conclusions

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Wellness Attitudes & Behaviors Can Be A Valuable Growth Tool

The SSG Wellness SpectrumTM powered by GfK MRI sheds light on key planning issues:

Which wellness segments to pursue in TMA

discover customers whose behavior have changed or needs are not being met

strengthen brand identities and develop messages that speak to different healthy outlook consumers

What kind of products to offer

refine a product’s formulation or fine-tune the positioning or develop a new product

How to go-to market effectively

predict what products will consumers of different health outlooks be more persuaded to consider & buy

inform channel selection to optimize the path to purchase for selected targets

Properly designing and executing 1-to-1 wellness-prone promos and experiences in a specific trade areas that respond to specific wellness attitudes & interests

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Respond to the powerful wellness forces changing how people are increasingly shopping for healthier choices

At an individual level, higher wellness attitudinal & behavioral scores are associated with the purchase of healthier sub-categories and brands experiencing higher growth


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TIME FOR YOUR QUESTIONS


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Wellness Spectrum Brands Awards Breakfast Category 2014


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Hispanic Wellness Brands’ Nominees

Doughnuts

Source: SSG Wellness Spectrum™ Powered by GfK MRI 2012 Doublebase Base: Breakfast Buyers 18+ GfK MRI

2014 © Santiago Solutions Group, Inc. www.SantiagoSolutionsGroup.com


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White NH Wellness Brands’ Nominees



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African American Wellness Brands’ Nominees




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Millennial Wellness Brands’ Nominees




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Total Market Wellness Brands’ Nominees



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Total Market Wellness Brands Awards Breakfast Category 2014


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We guide clients using advanced research, projectable opportunity sizings, innovative modeling and predictive analytics. Yet, integrating and distilling rigorous data is just the base to reduce your financial risk.

Leveraging client-side experience and consulting, we arm you with intelligence, ownable insights to purchase, strategic pathways aligned with the highest impact priorities, and effective Total Market roadmaps inclusive of customer journeys.

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GfK MRI provides A deeper understanding of the American Consumer: who they are, what they think, and how best to reach them.

GfK MRI data are culled from its Survey of the American Consumer™, the most comprehensive single-source database in the United States. Updated each year from more than 25,000 in-person interviews with adults, the Survey contains unparalleled insights into consumer demographics, media choices, attitudes and lifestyles, along with consumption of approximately 6,000 products in 550 categories.

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SSG R360 Tapping Into TM Healthy Living Movement - 2014 Wellness Brand Awards_Full 8-15-14

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