Todd Hale SVP, Consumer & Shopper Insights May 3, 2013 U.S. CONSUMER TRENDS.

Todd HaleSVP, Consumer & Shopper InsightsMay 3, 2013

U.S. CONSUMER TRENDS

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TABLE OF CONTENTS

• Demographic Trends (3)

• Generational (6)

• The Growth Majority (21)

• Convenient Consumer Solutions (51)

• Health & Wellness (85)

• Sustainability (109)

• Media Trends (114)

• Summary & Closing Thoughts (132)

DEMOGRAPHIC TRENDS

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CHANGING FACE OF THE AMERICAN CONSUMER

Urbanization &Industrialization

foster …

Decliningbirth

rates …

UnevenPopulation

Growth

OlderConsumers

withNew Needs

Changes inPer HH

Spending

Immigration& Growthin EthnicFamilies

Declining %of HHs with

Children

With important implications on the future …

Which leadto an agingpopulation

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“RECESSION BIG FACTOR AS BIRTHRATE FALLS”

Source: The Wall Street Journal & Pew Research Center

The annual number of births per 1,000 women ages 15 to 44 dropped 8% in the U.S. from 2007 to 2010… Yet the rate for foreign-born women dropped 14%... compared with a 6% decline for U.S.-born women

The Wall Street Journal, Nov. 29, 2012

GENERATIONAL TRENDS

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7Source: USA TODAY (Feb. 4, 2013)

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170 157

135 113

Shopping Trips Per Household

OLDER MORE TRIPS; YOUNGER BIGGER BASKETSTotal Retail Channels

$6,156 $7,223 $7,194

$6,060

Basket Ring $ Per Household

Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/29/2012, excludes gas only or Rx only trips; *UPC-coded products

$36 $46

$53 $54

Basket Ring $ Per Trip

26%25%

27%31%

% Dollars on Deal*

MillennialsGen XBoomersGreatest Gen

Millennials more deal prone




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Except in mass, younger make fewer trips

Warehouse Clubs

Mass Merchandisers

Convenience/Gas

Dollar Stores

Drug Stores

Supercenters

Grocery Stores

12

12

15

15

16

26

67

13

12

15

15

14

25

59

11

12

12

12

13

23

51

9

12

7

9

13

20

43

Greatest GenBoomersGen XMillennials

TRIP CAPTURE AMONG YOUNGER IS PARAMOUNTShopping Trips Per Household

Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/29/2012, based on total basket ring, excluding gas only or Rx only trips

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What categories & brands are best at filling the baskets of younger generations

Dollar Stores

Convenience/Gas

Drug Stores

Grocery Stores

Mass Merchandisers

Supercenters

Warehouse Clubs

$13

$18

$24

$34

$38

$51

$86

$15

$23

$26

$43

$47

$61

$99

$17

$21

$28

$51

$54

$71

$107

$17

$22

$27

$52

$54

$68

$106

Greatest GenBoomersGen XMillennials

YOUNG OFFSET LESS TRIPS WITH > TRIP SPENDBasket Ring $ Per Trip


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But Walmart still captures more trips

Kmart

Target

Walmart Banner

5

7

25

5

8

25

4

10

22

3

11

19

TARGET HAS > RELATIVE APPEAL AMONG YOUNGERShopping Trips Per Household


Kmart

Target

Walmart Banner

$37

$40

$50

$46

$51

$60

$47

$59

$70

$51

$57

$67

Greatest Gen Boomers Gen X Millennials

Total Basket Ring $ Per Trip

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More Target trips from affluent

Kmart

Target

Walmart Banner

5

7

25

4

7

27

4

9

25

5

8

25

4

10

23

4

10

21

4

10

18

> WALMART TRIPS AMONG LOWER INCOMEShopping Trips Per Household


Kmart

Target

Walmart Banner

$40

$43

$53

$42

$42

$58

$45

$47

$61

$44

$48

$62

$46

$53

$63

$47

$57

$66

$54

$64

$68

< $20k $20-29.9k $30-39.9k $40-49.9k $50-69.9k $70-99.9k $100k +


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Greatest Gen Boomers Gen X Millennials

Baby Food 38 48 89 119

Carbonated Beverages

93 131 127 104

Cereal 63 70 86 88

Detergents 46 52 57 47

Hair Care 28 39 49 40

Ice Cream 42 39 35 28

Pet Food 215 233 173 120

Vitamins 132 104 82 69

Wine 129 125 100 63

GENERATIONAL STORE MIX IS PARAMOUNTWhere is your category or brand driving sales?

Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/29/2012, UPC-coded products

How can manufacturers & retailers collaborate on generational store sets?

Annual $ Per Household Among Category Buyers

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Boomer CPG $ Spend Ad Dollars Aimed at 50+ Years

50% 10-15%

THE DIVIDE

Source: TV Board & Nielsen

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16 out of 25

BOOMERS DRIVE THE TOP TV SHOWS

Source: Nielsen

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REDEFINING SENIOR AUDIENCE & FOCUS

Source: AARP, Walgreens, Kroger, Fry’s, Harris Teeter

If you're 55+, you can save an additional 10% on your food bill (less V.I.P savings, taxes, and coupons) the first Wednesday of every month.

Kroger: Seniors receive a 10% discount OFF of your total

purchases on the first Wednesday of every month. All Seniors, 60

years and older are eligible! (southern Illinois, southern Indiana, select KY & Nashville, TN area stores

Only!)

AARP: Get a Donut with purchase of a

L or XL Hot Coffee

http://www.harristeeter.com/default.aspx

http://www.harristeeter.com/default.aspx

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GROCERY CALL-IN SERVICE FOR ELDERLY & DISABLED

Source: Roche Bros.

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HEALTH & BEAUTY CARE SENIOR FOCUS

Sources: MultiAd Kwikee & company websites

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SMALLER PORTION SIZES, BUT WHAT ELSE?

Source: MultiAd Kwikee

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GRANDPARENTS MULTIPLIER EFFECTU.S. Grandparent population will grow by 11% from 69.6 million in 2010 to 77.1 million by 2015

Source: http://www.grandparents.com/grandparent-economy

THE GROWTH MAJORITY

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22Source: Associated Press

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2000 2010 2020 2030 2040 2050

13% 16% 19% 23% 27% 30%13% 14% 14% 14%

15% 15%4%

5%6% 7%

8%9%

70% 65% 60% 60% 51% 46%

Hispanic BlackAsian White Non-Hispanic

ETHNIC WILL BE MAJORITY BY 2050 Distribution of the U.S. Population

Source: U.S. Census

35%

54%

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Total Under 12 12-17 18-34 35-54 55+

15% 22% 18% 19% 13% 7%

13%16% 17% 14%

12%9%

5%

5% 5% 6%5%

4%

68%56% 60% 60%

68%79%

Hispanic BlackAsian White Non-Hispanic

WHITE NON-HISPANIC SKEWS MUCH OLDERU.S. Population Age by Ethnicity

Source: U.S. Census

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'90 '00 '10 '90 '00 '10 '90 '00 '10

71%63%

57%

82%77%

73%

86%82% 80%

MULTICULTURAL BEHIND GROWTH IN LARGE METROS% U.S. White Population

Source: State of Metropolitan America - Brookings

Large metros Small metros Non-metro areas

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'90 '00 '10 '90 '00 '10 '90 '00 '10

71%63%

57%

82%77%

73%

86%82% 80%

FACTOIDS TO DRIVE MULTICULTURAL ENGAGEMENTS% U.S. White Population

Source: State of Metropolitan America - Brookings

Large metros Small metros Non-metro areas

“42 of 100 largest metros lost white

population & 22 are “majority minority”

populations”

“Nearly half of Hispanics live in just 10 large metros, but those accounted for only 36% of Hispanic

growth”

“Asians even more concentrated with 1/3rd

living in just three metros: Los Angeles,

New York, & San Francisco”

“Atlanta, Dallas & Houston led all metros

in Black population gains, while populations

dropped in New York, Chicago & Detroit”

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FASTEST GROWTH IN DIVERSE SUBURBS“Residents of suburbs in the 50 largest U.S. metropolitan areas who live in diverse areas – where the population is 20% to 60% non-white – outnumber those who don’t.”

Diverse suburbs

Predominantly non-white suburbs

Predominantly white suburbs

52.7

20.1

30.2

2010 Population (in millions)

Source: Myron Orfield and Thomas Luce, Institute on Metropolitan Opportunity at the Univ. of Minnesota Law School

% change 2000–2010

+31%

+72%

-23%

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HISPANIC BUYING POWER

Source: Selig Center for Economic Growth, University of Georgia, Athens

Hispanic consumer market in the U.S. is larger than the entire economies of all but 13 countries in the world

UGA Selig Center Multicultural Economy study, May 1, 2012

1990 2000 2010 2012 2015 2017

$1.7 trillion

$1.5 trillion

$1.2 trillion

$1.0 trillion

$488 billion

$210 billion

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145

140

143


FEWER HISPANIC TRIPS, BUT BIGGER SPENDTotal Retail Channels

$6,824

$7,032

$7,388


$47

$50

$52


27%

28%

26%

% Dollars on Deal*


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148

154


BLACKS SHOP OFTEN; SPEND LESS & LESS DEALSTotal Retail Channels

$6,839

$5,954


$46

$39


28%

22%

% Dollars on Deal*


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145

149


ASIANS SHOP OFTEN, SPEND LESS & INTO DEALSTotal Retail Channels

$6,824

$6,759


$47

$45


27%

34%

% Dollars on Deal*


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Warehouse Clubs

Mass Merchandisers

Convenience/Gas

Dollar Stores

Drug Stores

Supercenters

Grocery Stores

14

13

10

14

14

20

55

12

13

13

12

14

24

50

12

12

13

12

13

25

56

Hispanic-Spanish PreferredHispanic-English PreferredWhite Non-Hispanic

ENGLISH-PREFERRED W/LIKE TRIPS AS WHITE POPShopping Trips Per Household

Source: Nielsen Homescan, Total U.S. 52 weeks ending 12/29/2012, excludes gas only or Rx only trips

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Dollar Stores

Convenience/Gas

Drug Stores

Grocery Stores

Mass Merchandisers

Supercenters

Warehouse Clubs

$16

$31

$26

$47

$51

$62

$107

$15

$24

$29

$47

$52

$67

$101

$16

$22

$26

$45

$49

$64

$100

Hispanic-Spanish Preferred

Hispanic-English Preferred

White Non-Hispanic

HISPANICS OFFSET LESS TRIPS WITH BIG BASKETS Basket Ring $ Per Trip


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Are > small formats trips a preference or a function of format availability?

Warehouse Clubs

Mass Merchandisers

Convenience/Gas

Dollar Stores

Drug Stores

Supercenters

Grocery Stores

9

10

15

20

15

23

53

12

12

12

12

14

24

58

African American

Non-African American

AFRICAN AMERICAN SMALL FORMAT PREFERENCEShopping Trips Per Household


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Dollar Stores

Convenience/Gas

Drug Stores

Grocery Stores

Mass Merchandisers

Supercenters

Warehouse Clubs

$15

$22

$23

$37

$44

$54

$84

$15

$22

$26

$44

$48

$63

$98

African American

Non-African American

AFRICAN AMERICANS SPEND LESS PER TRIPBasket Ring $ Per Trip


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Asians more frequent shoppers in drug, mass & club

Warehouse Clubs

Mass Merchandisers

Convenience/Gas

Dollar Stores

Drug Stores

Supercenters

Grocery Stores

16

15

8

9

16

18

57

12

12

13

12

13

25

56

AsianWhite Non-Hispanic

ASIAN CHANNEL-SPECIFIC PREFERENCESShopping Trips Per Household


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Dollar Stores

Convenience/Gas

Drug Stores

Grocery Stores

Mass Merchandisers

Supercenters

Warehouse Clubs

$14

$25

$23

$35

$44

$54

$95

$16

$22

$26

$45

$49

$64

$100

Asian

White Non-Hispanic

ASIANS SPEND LESS PER TRIP IN MOST CHANNELSBasket Ring $ Per Trip


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Target has greater relative appeal among Asians

Kmart

Target

Walmart Banner

4

9

24

4

10

21

4

7

22

3

13

15

WALMART DRIVES MORE TRIPS & BIGGER BASKETSShopping Trips Per Household


Kmart

Target

Walmart Banner

$43

$54

$63

$50

$55

$63

$47

$47

$53

$41

$49

$49

White Non-Hispanic (any race) Hispanic African American Asian


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Edibles Non-Edibles

Vegetables & Grains – Dry 230 Men’s Toiletries 175

Baby Food 171 Fragrances – Women 160

Shortening/Oil 145 Children’s Cologne 153

Juices/Drinks – Shelf Stable 131 Hair Care 149

Prepared Foods-Dry Mixes 129 Disposable Diapers 142

Eggs-Fresh 129 Baby Needs 134

Juices & Drinks-Refrig 129 Sanitary Protection 129

Pkg’d Milks & Modifiers 128 Cosmetics 129

Bottled Water 125 Grooming Aids 128

Gum 122 Personal Soap & Bath Needs 127

> SPEND ON FOODSTUFFS, BEAUTY CARE & BABIESHispanic Dollar Index

Source: Nielsen Homescan, 52 Weeks Ending 12/29/2012, UPC-coded; Purchase index: share of Hispanic $ sales divided by U.S. household $ share X 100

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English-preferred households spend more on general population categories

Pizza/Snacks-FrozenWine

Pet FoodCharcoal/Logs/Accessories

Diet AidsAll Nielsen Categories

Prepared Foods - Dry MixesMen's Toiletries

Baby FoodShortening/Oil

Vegetables & Grains-Dry

42474750535355

616567

73

58535350474745

393533

27

Spanish-Preferred Households English-Preferred Households

LANGUAGE PREFERENCE TIED TO CATEGORY SPENDShare of Hispanic dollars by preferred language

Source: Nielsen Homescan, 52 Weeks Ending 12/29/2012, UPC-coded products

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Edibles Non-Edibles

Unprep Meat/Seafood-Frz 170 Ethnic HABA 934

Vegetables & Grains-Dry 158 Feminine Hygiene 185

Juices & Drinks-Refrig 157 Fresheners/Deodorizers 174

Spices/Seasonings/Extract 154 Personal Soap/Bath Needs 164

Shortening/Oil 154 Fragrances – Women 153

Juices/Drinks – Shelf Stable 153 Family Planning 142

Sugar/Sugar Substitutes 145 Children’s Cologne 140

Gum 136 Sanitary Protection 133

Fresh Meat (UPC) 136 Insecticides Repellents 131

Soft Drinks-Non Carb 136 Detergents 129

> SPEND ON BASIC FOODS, PERSONAL & BEAUTYAfrican American Dollar Index

Source: Nielsen Homescan, 52 Weeks Ending 12/29/2012, UPC-coded; Purchase index: share of African American $ sales divided by U.S. household $ share X 100

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Edibles Non-Edibles

Vegetables & Grains –Dry 278 Baby Needs 268

Baby Food 176 Film & Cameras 213

Juices & Drinks-Refrig 150 Skin Care Preparations 212

Meal Starters-Shelf Stable 136 Family Planning 211

Nuts 134 Disposable Diapers 178

Yogurt 131 Sanitary Protection 161

Fresh Produce (UPC) 131 Oral Hygiene 150

Pasta 131 Hair Care 137

Bottled Water 128 Vitamins 137

Fruit-Dried 126 Kitchen Gadgets 136

> SPEND ON FOOD, BABY, PERSONAL & BEAUTYAsian Dollar Index

Source: Nielsen Homescan, 52 Weeks Ending 12/29/2012, UPC-coded; Purchase index: share of Asian $ sales divided by U.S. household $ share X 100

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APPEALING TO DIVERSE TASTES

Source: Dominick’s

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BILINGUAL DÉCOR, MADE-TO-ORDER CUBAN CAFÉ

Source: Winn-Dixie

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CATERING TO NEIGHBORHOOD DEMOGRAPHICS

Source: Pathmark, Progressive Grocer & NJ.com

Our remodeled Weehawken store…offers shoppers products that match their needs and cultural preferences…With more diverse offerings and a friendlier, more modern atmosphere, this renovation is a prime example of our goal to enhance our customers’ shopping experience.

Progressive Grocer, Mar. 16, 2012

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CONNECTING THRU HISPANIC HERITAGE MONTH

Source: Macy’s

In honor of Hispanic Heritage Month, Macy’s partners with Vanidades magazine to honor Rock and Roll Hall of Famer Carlos Santana as Macy’s 2012 Icon of Style

Macy’s

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MANUFACTURER HISPANIC WEBSITES & APPS

Source: Company websites

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P&G’S GAIN EXPANDING TO REACH HISPANICS

Source: P&G Gain

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ETHNIC DIVERSITY IMPACTS GENERAL POPULATION


http://www.amys.com/images/uploads/products/large/000059.jpg

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BILINGUAL PACKAGING – WHAT ABOUT ADS?


CONVENIENT CONSUMER SOLUTIONS

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CONVENIENT MEAL OPTIONS


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RESTAURANT MEALS & SNACKS AT HOME!


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CONVENIENCE FOODS STEAM UP!


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CONVENIENT SOLUTIONS FOR CLEANING

Source: MultiAd Kwikee & company websites

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PRE-MEASURED


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MORE THAN ONE BRAND/PRODUCT IN PACKAGE


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“ON-THE-GO” & “TRAVEL PACKS”


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0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

1

2

3

4

5

6

Retail E-Commerce Sales % of Total Retail Sales

Percent

E-COMMERCE STEADILY GAINING SHARE

Source: U.S. Census Bureau

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J.C. Penney Co. Inc.

L.L. Bean Inc.

Sony Electronics Inc.

Macy's Inc.

OfficeMax Inc.

CDW Corp.

Sears Holdings Corp.

Office Depot Inc.

Walmart.com

Staples Inc.

$1,630,000,000.0$1,630,000,000.0$1,716,502,219.0$1,900,000,000.0$1,980,000,000.0$2,187,000,000.0$2,246,375,040.0$2,700,000,000.0$2,901,497,618.0$2,950,000,000.0$3,000,100,000.0$3,204,577,000.0$3,604,288,201.0$3,760,000,000.0$4,100,000,000.0$4,609,728,000.0$4,900,000,000.0$6,660,000,000.0

$10,600,000,000.0

$48,080,000,000.0

Online Sales

AMAZON BIGGER THAN NEXT TEN COMBINED

4%4%

25%12%

1%22%

40%8%

2%18%

10%48%

16%24%

0%-4%

20%27%

4%41%

2011 Growth

Source: Internet Retailer Top 500 List

Amazon revenue jumped to $61.1 billion in 2012

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GOING AFTER REGULARLY SCHEDULED BUYS

Source: Amazon.com

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SAVINGS THRU SUBSCRIPTION SERVICES

Source: USA TODAY & company websites

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AMAZON OFFERS FOUNTAIN OF YOUTH

Source: http://www.amazon.com/gp/browse.html/?node=5856180011

AmazonApr. 15, 2013

Amazon Launches 50+ Active and Healthy Living Store Featuring Hundreds of Thousands of Items In One Single Destination... Our goal is to offer great prices on a vast selection of items and a robust Resource Center filled with tips on everything from boosting brain power to care-giving.

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AMAZONSUPPLY.COM FOR BUSINESSES

Source: The Wall Street Journal & AmazonSupply.com

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WALMART TRIES TO CATCH UP WITH AMAZON

Source: Amazon, Reuters, Drug Store News

Amazon and Walmart's e-commerce division are expanding and starting programs to allow customers to order items online and then pick them up from lockers stationed at brick-and-mortar retailers.

Drug Store NewsApr. 3, 2013

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ADDS 30,000 CLOTHING & SHOE ITEMS

Source: diapers.com

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.COM MEETS BRICK & MORTAR

Source: Walmart

Mattel and Walmart Canada have launched the first pop-up virtual toy store in Canada, providing a QR code-based shopping experience for commuters and gift-givers.

RetailCustomerExperience.com, Nov. 6, 2012

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SAME-DAY DELIVERY PILOTS


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APP TO MAGICALLY FIND PERFECT GIFT FOR FRIENDSThe site includes improved product recommendations; expanded selection from over 100 sites, including Disney, Nordstrom and Think Geek; and birthday reminders

Source: Walmart

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ONLINE BULK PURCHASE CENTER

Source: Dollar General (July 18, 2012)

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VIRTUAL SHOPPING & PICK-UP SPOTSPeapod offering virtual supermarkets at 100+ commute train stations; also testing grocery pickup

Source: Peapod, Stop & Shop, Supermarket News

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FRESHDIRECT EXPANDS TO PHILLY SUBURBS

• Philadelphia

• Delaware

• Chester

• Montgomery

• Bucks

• Mercer

• Burlington

• Camden

Source: FreshDirect, Select Greater Philadelphia & Delaware Valley Regional Planning Commission

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WALGREENS ADDS CONVENIENT OPTIONS

Source: Walgreens

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NORDSTROM INVESTS IN E-COMMERCE GROWTH

Source: Nordstrom’s, MorningNewsBeat & Internet Retailer

Nordstrom Inc. plans to ‘spend almost $1 billion over the next five years to continue to support its e-commerce infrastructure’

Internet Retailer, Feb. 20, 2012

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“SHOPPERS … SPEND ABOUT 10% MORE”

Source: Stop & Shop; iTunes; WSJ/Philip Montgomery (in-store photo); Quote by Erik Keptner, SVP marketing & consumer insights, Ahold

Fresh & Easy Neighborhood Market, El Segundo, Calif., is testing a ‘Scan As You Shop’ handheld device at a store here that allows shoppers to scan products during their shopping trip and keep track of what they are spending.

Supermarket News, Feb. 6, 2012

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“STORES MAPPED IN A MOBILE APPLICATION”“aisle411 connects shoppers, retailers and brands where ‘X marks the spot’, the location where over 70% of purchase decisions are made, in-store and in-aisle.”

Source: Retailing Today & aisle411.com; *National survey commissioned by Aisle411

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ARMING ASSOCIATES W/MOBILE POS DEVICES

Source: Forbes & company websitesSource: Forbes & company websites

Forbes, Apr. 6, 2012

Nordstrom has deployed over 6,000 of these devices throughout their 117 full-line stores, and at some Nordstrom locations, there are more mobile POS devices than regular registers…. these devices are part of a larger plan for Nordstrom to help ‘provide a more technology enabled store experience.’

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100 MILLION+ TRANSACTIONS SINCE 01/2011

Source: Starbucks

quick, seamless payment experience at approximately 7,000 Starbucks stores. Square Wallet is in addition to Starbucks own mobile payment applications…which are used by Starbucks customers more than 2 million times each week Starbucks News Release, Nov. 7, 2012

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“REMEMBERS PAST PURCHASES”

Source: Wegmans

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RECIPES BASED ON CONTENTS OF BASKET

Source: Ogilvy Brazil via coloribus.com

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“APPS EMERGE AS KEY WALMART STRATEGY”

Source: Supermarket News & Walmart (http://wm5.walmart.com/scanandgo/)

Walmart plans to launch Print Plus, a mobile app that brings its print ads to life… The app, to be launched this year, allows shoppers to view content — such as recipes and product information — when they scan a Walmart ad with their smart phones.

Additionally, the company is testing Scan & Go, an iPhone app that lets shoppers use their phones to scan the bar codes on items in-store, and complete the purchase at a self checkout.

The retailer is also exploring mobile payment.

Supermarket NewsApr. 9, 2013

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CAMPBELL’S MEAL-PLANNING APP CONTEST

Source: Campbell’s

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INNOVATION IN VENDING MACHINES

Source: We Go Babies & PepsiCo

Buy a Pepsi, "gift" a Pepsi

Oops! Forgot the diapers and formula

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INTERACTIVE SELF-SERVE FOUNTAIN DISPENSERTouch screen enables consumers to select from 100+ brands

Source: Coca-Cola Company

HEALTH & WELLNESS

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EVOLUTION OF USDA DIETARY GUIDANCE

Source: United States Department of Agriculture (USDA)

1992

2005

2011

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OPPORTUNITIES & CHALLENGES W/ PERSONAL H&WNMI’s Health & Wellness Consumer Segmentation

Source: Natural Marketing Institute (NMI), U.S. General Population

WELL BEINGS®17%

FOOD ACTIVES®18%

MAGIC BULLETS®24%

FENCE SITTERS®19%

EAT, DRINK & BE MERRYS®

22%• Most health pro-

active

• Market leaders & Influencers

• Highest organic usage

• Use some supplements

• Use many health modalities

• Most Green

• Mainstream healthy

• Basics, balance and control

• Desire inherently healthy foods

• Most influenced by physicians

• Least eco-friendly

• Price sensitive

• Conveniently healthy

• Heavy pill usage – supplements OTC, Rx

• Health managers vs. preventers

• Weight managers

• Least likely to cook at home

• Least likely to exercise

• ‘Wannabe’ healthy

• Most likely to have kids

• Stressed out, want help and control

• More health kicks but no clear goals

• Receptive to eco-friendly

• Active weight loss

• High social media usage

• Least health active

• Unconcerned about prevention

• Focused on taste

• Most price driven

• Younger

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145 153

156 163

161


THOSE MOST ENGAGED IN H&W SHOP AND SPENDTotal Retail Channels

$6,533 $7,078 $7,190 $7,169

$7,828


Source: Natural Marketing Institute (NMI), Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/29/2012

$45 $46 $46

$44 $49


WELL BEINGS are active shoppers & spend the most annually

Well BeingsFood ActivesMagic BulletFence SittersEat, Drink & Be Merrys



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Well Beings make more grocery & club trips

Mass Merchandisers

Warehouse Clubs

Convenience/Gas

Dollar Stores

Drug Stores

Supercenters

Grocery Stores

12

14

10

12

14

23

62

13

13

13

13

16

26

60

12

12

13

14

14

26

57

14

12

12

14

14

24

56

12

10

15

15

13

25

55

Well BeingsFood ActivesMagic BulletsFence SittersEat, Drink & Be Merrys

MULTIPLE RETAIL CHANNEL CONNECTION POINTSShopping Trips Per Household


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Only in Whole Foods do we see extreme trips from Well Beings

Whole Foods Markets

7-Eleven

Walgreens

Target

Dollar General

Costco

Aldi/Save A Lot

Safeway Grocery Corp

Wegman's

Walmart Banner

Kroger Grocery Corp

9

5

8

10

9

14

13

18

21

22

27

3

8

9

9

9

12

16

20

16

25

28

4

7

8

9

10

12

14

18

18

25

27

4

8

8

11

10

12

12

20

20

23

25

3

7

8

9

11

11

12

20

25

24

26

Well BeingsFood ActivesMagic BulletsFence SittersEat, Drink & Be Merrys

BROAD ACCESS TO DIVERSE GROUPS Shopping Trips Per Household


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DIVERSE CATEGORY DEMAND ACROSS SEGMENTS

Source: Natural Marketing Institute (NMI), Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/29/2012, UPC-coded

Well Beings

Food Actives

Magic Bullets

Fence Sitters

Eat, Drink & Be

MerrysBeer 86 89 102 105 118Wine 136 103 84 93 84Candy 91 102 106 97 98Carbonated Beverages 75 97 105 103 112Bottled Water 117 95 97 105 92Fresh Produce 143 103 90 95 80Vitamins 119 114 108 94 48Tobacco & Accessories 66 82 113 90 119

$ Buying Rate Index

Where is your category or brand connecting?

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92

Plant Sterol

Low Glycemic

Fortified

Soy

Iron Presence

Probiotic

Oil Presence

High Fructose Corn Syrup Free

No MSG

Hormone Antibiotic Free

Fiber Presence

Organic

Calcium Presence

Cholesterol Presence

Gluten Free

Calorie Presence

Vitamin/Mineral Presence

Fat Presence

$65,599,806 $205,227,214 $304,999,509 $878,085,597 $1,201,535,451 $1,564,320,586 $1,840,691,031 $2,202,352,936 $2,269,537,542 $2,703,131,465 $2,767,809,607 $3,260,353,445 $3,793,580,913 $4,072,847,249 $4,621,102,641 $4,770,819,739 $5,202,643,555 $5,376,790,275 $5,389,387,821

$6,646,556,369 $7,738,137,646 $8,040,942,421 $8,124,912,479

$12,067,007,263 $13,858,159,020 $14,458,008,850

$16,228,679,845 $17,592,964,595

$18,939,839,556 $22,875,092,534

$24,169,500,894 $26,693,601,014 $27,014,243,906

$41,822,998,925 $69,584,109,531

HEALTHY CLAIMS RANGE FROM $66M TO $70BDollar Sales (billions)

Source: Nielsen Scantrack & Nielsen Label Trends, Total U.S. - All Outlets Combined, 52-weeks ending 03/16/13 (vs. year ago), UPC-coded

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93

05/19/0707/14/0709/08/0711/03/0712/29/0702/23/0804/19/0806/14/0808/09/0810/04/0811/29/0801/24/0903/21/0905/16/0907/11/0909/05/0910/31/0912/26/0902/20/1004/17/1006/12/1008/07/1010/02/1011/27/1001/22/1103/19/1105/14/1107/09/1109/03/1110/29/1112/24/1102/18/1204/14/1206/09/1208/04/1209/29/1211/24/1201/19/1303/16/13

-5

0

5

10

15

20

25

30

Organic Labels All Nielsen Measured Categories

ORGANIC GROWTH IS BACKDollar Trend

Source: Nielsen Scantrack & Nielsen Label Trends, Total U.S. - All Outlets Combined, 4-week increments (vs. year ago), UPC-coded

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Stevia Soy Fortified Sweetener Presence Calcium Presence Fat Presence Caffeine Presence Vitamin/Mineral Presence Salt or Sodium Presence Calorie Presence Flax or Hemp SeedOmega Presence Calorie 100 Probiotic

-1-1

-1-1

-1-2

-2-3-3

-3-4

-5-5

-6

SOME LABEL CLAIMS STRUGGLING Unit Trend


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Cholesterol Presence

Antioxidants

Multigrain

Grain Type

Natural

No MSG

Fruit & Veg Presence

Organic

Gluten Free

Plant Sterol

Low Glycemic

11

2223

4455

67

9101010

1516

1928

31

WINNING LABEL CLAIMS Unit Trend


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96

United States Canada

5849

35 45

7 6

Not at allIn partMostly

ROOM TO ENHANCE LABEL UNDERSTANDINGHow well do you understand the nutritional information panels/labels on food packaging?

Source: Nielsen Global Online Survey – Q1 2011; Base: All respondents n=998

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Fresh Claims

All Natural Claims

Non-Artificial Claims

Heart-Healthy Claims

Imported Products Food Claims

Organic Claims

Real Fruit Claims

Fat Claims

Vitamin Content

Calorie Content

8

9

9

11

11

14

17

19

28

32

78

77

75

79

72

74

73

69

67

60

13

14

16

10

17

13

10

12

6

8

Always Sometimes Never

FEW LABEL CLAIMS 100% BELIEVABLEDo you believe/trust that these food labels claims on packages are accurate & truthful?

Source: Nielsen Global Online Survey – Q1 2011, U.S. results; Base: All respondents n=50

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RETAILER HEALTH & WELLNESS SOLUTIONS


http://www.heb.com/home/home.jsp

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SAFEWAY FOCUSED ON HIGH-GROWTH SEGMENTS

Source: Safeway; SeekingAlpha (SWY); Store Brands Decisions

“Health and wellness, organics, open nature, eating right fits into that”

Store Brands DecisionsMar. 19, 2013

Safeway is repositioning its grocery stores as lifestyle destinations with store brands as a foundation.‘Today, we're a supermarket company. We're a grocer selling wellness services and wellness products…in 10 years' time, we (will be) more of a wellness company selling food. This should be the highest growth piece of our business for the next 10 years, and…Safeway can own the wellness space.’

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MARTIN’S ADDS HEALTHIER CHECK-OUT LANE

Source: Ahold

The Healthy Ideas check-out lanes contain both national and Martin’s brand perishable and nonperishable healthy food items

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HELP DIABETES PATIENTS SAVE

Source: Walmart (U.S.)

Walmart introduced… the low-cost ReliOn Prime meter and blood sugar test strips…Walmart will provide increased savings on a variety of items to help patients ease the cost of diabetes management.

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GETTING ASSOCIATES & SHOPPERS MOVING

Source: Walgreens, Hy-Vee, H-E-B, The Mexia (TX) News Online

http://www.hebcommunitychallenge.com/

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INSURANCE PROVIDER ENCOURAGES CONSUMERSConsolidates coupons for healthier products

Source: Cigna, Coupons.com, Supermarket News

Coupons available on the Cigna Everyday Healthy Values site are for products that meet the minimum health guidelines based on the U.S. Department of Agriculture’s and the Food and Drug Administration’s recommendations.

Supermarket News, Dec. 10, 2012

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MORE THAN 500 GLUTEN-FREE PRODUCTS

Source: LiveGlutenFreely.com

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105

“BETTER FOR YOU” ITEMS


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“BETTER FOR YOU” ITEMS


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INDULGENT PRODUCTS CAN STILL BE WINNERS


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INVESTS MORE IN SNACKS & FROZEN FOODS

Source: Dow Jones Newswire

[ConAgra] is trying to grow its snacking and frozen foods businesses as it tries to capitalize on food shoppers' greater willingness to spend on wants rather than basic needs… [CEO] Rodkin said that while shoppers are ‘trying to squeeze every nickel they can’ on pantry staples, they are willing to indulge on products like desserts

Dow Jones Newswire, Feb. 21, 2012

http://www.conagrafoodscompany.com/

SUSTAINABILITY

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SUSTAINABILITY IN CORPORATE MESSAGING


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ONLINE GREEN PRODUCTS

Source: S.C. Johnson

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STRONG SUSTAINABILITY MESSAGING


Starbucks introduces the EarthSleeve; correlates to

a savings of nearly 100,000 trees

http://www.thecoca-colacompany.com/citizenship/plantbottle_basics.html

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CUTTING STORE ENERGY & INFORMING SHOPPERS

Source: Kroger 2012 Sustainability Report

MEDIA TRENDS

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NEWS SOURCES CONTINUE SHIFT TO ONLINE

Source: Pew Research Center

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Female Head Age 45-54

HH Income $40-$49.9k

White

HH Income $50-69.9k

Boomers

HH Income $70-$99k


HH Income $100k+

Greatest Generation

Female Head Age 65+

39%

39%

43%

43%

44%

48%

48%

51%

61%

62%

NEWSPAPERS REACHING OLDER & AFFLUENTPercent subscribing to local newspaper delivered to home

HH Income <$20k

Gen Y (Millennials)

African American

Female Head Age <35

Gen X




Hispanic (any race)

No Female Head of HH

24%

25%

27%

28%

33%

33%

33%

34%

35%

35%

Source: Nielsen Online Views Survey (Aug/Sep 2012)

Top 10 Bottom 10

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HH Income $50-69.9k

Boomers

White


HH Income $70-$99k

HH Income $100k+

Greatest Generation

Female Head Age 65+

43%

44%

46%

47%

47%

52%

52%

56%

64%

65%

57%

56%

54%

53%

53%

48%

48%

44%

36%

35%

Subscribes Doesn't Subscribe

SALES FROM NON-SUBSCRIBERS SIGNIFICANTAll-Outlet Dollar Market Share of the Top 10 demographic groups who do or don’t subscribe to local newspaper home delivery


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HH Income <$20k

African American

Gen Y (Millennials)

Female Head Age <35

Gen X





Hispanic (any race)

29%

30%

34%

34%

36%

37%

37%

37%

41%

43%

71%

70%

66%

66%

64%

63%

63%

63%

59%

57%

Subscribes Doesn't Subscribe

MORE SO IN SEGMENTS W/LOW SUBSCRIPTIONSAll-Outlet Dollar Market Share of the Bottom 10 demographic groups who do or don’t subscribe to local newspaper home delivery


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Greatest Generation

Female Head Age 65+


Boomers



White

HH Income $100k+

HH Income $70-$99k

HH Income $50-69.9k

28%

29%

30%

30%

31%

32%

32%

32%

33%

34%

Subscribes

NEWSPAPER DELIVERY ATTRACTS DEAL BUYERS% Dollar Volume on Deal of the Top 10 demographic groups* who do or don’t subscribe to local newspaper home delivery

Greatest Generation

Female Head Age 65+


Boomers


White

HH Income $100k+

HH Income $50-69.9k


HH Income $70-$99k

19%

20%

20%

21%

22%

23%

24%

24%

24%

25%

Doesn't Subscribe*Sorted by % Dollar Volume on DealSource: Nielsen Online Views Survey (Aug/Sep 2012)

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African American



HH Income <$20k

Hispanic (any race)

Gen X


Female Head Age <35

Gen Y (Millennials)

27%

27%

28%

29%

30%

30%

34%

35%

39%

40%

Subscribes

ESPECIALLY AMONG YOUNGER% Dollar Volume on Deal of the Bottom 10 demographic groups* who do or don’t subscribe to local newspaper home delivery


HH Income <$20k

African American


Hispanic (any race)


Gen X


Gen Y (Millennials)

Female Head Age <35

19%

20%

20%

21%

22%

22%

23%

24%

28%

28%

Doesn't Subscribe*Sorted by % Dollar Volume on DealSource: Nielsen Online Views Survey (Aug/Sep 2012)

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TARGET SIMPLIFIES ONLINE ADHow it works: Scroll over item in the ad, click on “add to quicklist”… When done shopping, send list to your mobile

Source: Target

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RETAILERS LINK TO “HOW TO” VIDEOS W/FEATURES

Source: HyVee

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ALDI TURNS THE PAGE; IMPROVES TECHNOLOGY

Source: Aldi

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ENHANCING ONLINE & NEWSPAPER CIRCULARS

Source: Family Dollar

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GENERAL MILLS ONLINE COOKING SOLUTIONS

Source: General Mills

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147133 133

94

120107

88107 107

88107

878293

8071 73

60

Humor Narrative Sentimental Value Product Promotion

HUMOR, NARRATIVE & SENTIMENTAL ADS RESONATEAdvertising Performance Index Since 2006

Source: Nielsen Ad Solutions

2006 – 2007Pre-recession

2008 – 2009Recession

2010 – 2011Recovery

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INNOVATIVE PRODUCTS & COMMUNICATIONSPhoto Caption: “The actor Terry Crews interrupting a commercial for Charmin Freshmates to pitch Old Spice body spray. While cobranding isn't new, one real commercial commandeering another may be.”

Source: The New York Times, Facebook & YouTube

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“TARGET … PUTS GROCERIES IN THE SPOTLIGHT”

Source: Target & Associated Press

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WHOLE FOODS ONLINE LIFESTYLE MAGAZINE

Source: Whole Foods’ Dark Rye Online Magazine

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WALMART CANADA UNVEILS MULTIPLATFORM MAGAZINE

Source: http://www.walmartlivebetter.ca/

Free publication available in print at Walmart Supercentres & online

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Text ads on mobile phonesOnline banner ads

Ads on social networksOnline video ads

Ads served in search engine resultsTV program product placements

Brand sponsorshipsAds before movies

Billboards and other outdoor advertisingAds on TV

Ads on radioAds in magazines

Ads in newspapersBranded websites

Emails I signed up forEditorial content such as newspaper articles

Consumer opinions posted onlineRecommendations from people I know

6464468

56667797710

27

2025

27293230

333635

41404041

4348

5458

64

46504749

4749

464546

41414142

3835

3023

6

28212119171514141312121211101099

3

Trust Completely Trust somewhat Don't trust much Don't trust at all

LESS TRUST IN ONLINE & MOBILE ADSTo what extent do you trust the following forms of advertising?

Source: Nielsen Global Online Survey – Q3 2011 (Percentage of U.S. respondents)

CLOSING SUMMARY & THOUGHTS

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CONSUMERS SHARE ENDURING THEMES

• Health & wellness• Value• Convenience• Comfort & enjoyment• Green• Demographics• Connected

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ARE YOU ACTING ON ENDURING THEMES?

• How do you innovate & execute against opportunities that are evident to others & come out ahead?

• How do you identify opportunities where you can provide unique solutions?

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COME SEE WHAT’S NEXT AT CONSUMER 360

http://www.consumer360.com/locations/us/

Join us on June 3 – 5, 2013 in Phoenix, AZ

Agenda CollaborateSpeakers Sessions

http://www.consumer360.com/locations/us/agenda/

http://www.consumer360.com/locations/us/collaborate/

http://www.consumer360.com/locations/us/speakers/

http://www.consumer360.com/locations/us/sessions/

http://www.consumer360.com/locations/us/agenda

http://www.consumer360.com/locations/us/speakers

http://www.consumer360.com/locations/us/sessions

http://www.consumer360.com/locations/us/collaborate

http://www.consumer360.com/

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CONTRIBUTING AUTHORS

Bonnie Dykstra-Losoff

Dave Howland

Diane Johannes

Gail Ehrenberg

James Russo

Kathy Mancini

Katie Sheehan

Kelly Pirrera

Mary Ellen Ryan

Sandy Smith

Shannon Murphy

Sue Mommaerts

Todd [email protected]

@ToddHaleNielsen

Victoria Stevens

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Source: https://ishare.nielsen.com/teams/consumer/NA/events/default.aspx

COME VISIT US ON ISHAREFor internal use only

https://ishare.nielsen.com/teams/consumer/NA/thoughtleadership/default.aspx

Todd Hale SVP, Consumer & Shopper Insights May 3, 2013 U.S. CONSUMER TRENDS.

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Transcript of Todd Hale SVP, Consumer & Shopper Insights May 3, 2013 U.S. CONSUMER TRENDS.