ANNUAL TOPLINE VIEW CPG COUPON FACTS TM REPORTED BY NCH FOR YEAR-END 2014
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1 ANNUAL TOPLINE VIEW CPG COUPON FACTS TM REPORTED BY NCH FOR YEAR-END
2 ANNUAL TOPLINE VIEW CPG COUPON FACTS TM FOR YEAR-END 2014 NCH COUPON MARKET TREND OVERVIEW DISTRIBUTION TREND DATA CHARTS REDEMPTION TREND DATA CHARTS NCH METHODOLOGY NCH Marketing Services, Inc. All rights reserved. 2
3 Marketers Coupon Strategies Deliver Increased Consumer Savings in 2014 While Staying Within Budgets By Charlie Brown NCH Vice President, Marketing Consumer savings rose to $3.6 billion in 2014, as consumer packaged goods (CPG) marketers increased the average coupon face value available to shoppers, according to NCH s annual topline view of the Coupon Facts report. Marketers for both food and non-food products strategically offered consumers more savings value with their coupons while also managing the redemption impact to their budgets. While both food and non-food marketers increased the average face value available through their coupon promotions, only non-food increased the total number of coupons distributed in Additionally, only non-food received a positive redemption increase. The net effect was a 2.9 percent or $100 million overall increase in consumer redemption savings. Average Face Values Distribution % Chg. Redemption % Chg. Food Coupons $1.00 $ % Food Coupons $0.99 $ % Non-Food Coupons $1.98 $ % Non-Food Coupons $1.68 $ % All CPG Coupons $1.62 $ % All CPG Coupons $1.26 $ % Total Dollars Offered $510 billion $533 billion 4.5% Total Consumer Savings $3.5 billion $3.6 billion 2.9% FSI CPG Coupons $1.63 $ % Non-FSI CPG Coupons $1.53 $1.46 (-4.6%) In an effort to work within 2014 budgets, marketers issued a total of 310 billion CPG coupons, down 1.6 percent from the previous year. Marketers achieved a total of 2.75 billion coupons redeemed in 2014, down 1.8 percent, through a strategic combination of media mix, product segment changes, offer tactics and various forms of retailer support. The free-standing insert (FSI) remained the dominant coupon vehicle, accounting for 92.2 percent of total CPG coupon distribution volume, as marketers leveraged the vehicle s mass reach for its brand-awareness value. Although digital coupon distribution increased, it remains less than 1 percent of total coupon distribution. Unlike in previous years, the tactical changes marketers made to coupon offer characteristics were focused on face value. Average face value distributed rose a healthy 6.2 percent to $1.72, while offer duration fell only slightly and multiple-purchase requirements were relatively unchanged. Similar to the recent past, year-over-year variability in the products promoted via coupons affected the annual trends. In the non-food segment, marketers distributed 3.5 percent more coupons in This led to substantially more non-food coupon redemption, which was up 11.4 percent, reversing a prior year decline. In the food segment, conversely, marketers distributed 10.4 percent fewer coupons and redemption fell by 10.3 percent from With 43 percent of food coupons requiring the consumer to purchase two or more items, a drop in redemption volume had an even greater impact on the quantity of product moved with a coupon for food marketers and retailers. 3
4 The overall reduction in food coupons had the largest impact on retailers in the grocery and mass merchandiser retailer channels, which experienced a 5.1 and 3.3 percent decline in total redemption volume, respectively. Yet, the vast majority of redemption nearly 80 percent occurred in these two channels. While retailers and CPG companies have increased investment in digital paperless coupons, it was not enough to compensate for the other factors reducing total redemption volume in the food segment. The increase in non-food coupons benefited the drug retailer channel, which saw a 16 percent increase in total redemption volume during The smaller all other retailers channel, which includes dollar stores, also saw a similar redemption volume increase. CPG marketers managed their budgets in 2014 to balance their coupon promotion objectives of consumer motivation, brand awareness and retailer trading partner support. At the same time, many have also invested more in the analysis, enhanced controls and risk mitigation areas that were all required to manage their coupon expenditures and optimize coupon performance to benefit brands, retailers and consumers. NCH will publish the 50 th edition of the Coupon Facts report in For access, and to opt-in to receive future notifications, please visit More details on 2014 s coupon trends, including client-exclusive analysis opportunities, may be obtained by contacting your NCH representative today. 4
5 Annual U.S. CPG Coupon Distribution Non-food coupons continued to grow in distribution and now make up two-thirds of total CPG coupon distribution volume 2014 Total U.S. CPG Coupon Distribution by Media FSI continued as the largest distribution vehicle for CPG marketers DISTRIBUTION ANNUAL TOPLINE VIEW CPG COUPON FACTS TM Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity 5
6 CPG Coupon Distribution Index by Media Year-over-year index of coupon distribution volume demonstrates that marketers maintained FSI while they also increased distribution within other media in 2014 CPG Coupon Offer Characteristics Aside from face values and non-food duration, marketers tactics remained fairly constant in 2014 DISTRIBUTION ANNUAL TOPLINE VIEW CPG COUPON FACTS TM Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity 6
7 Annual U.S. CPG Coupon Redemption Non-food CPG coupons experienced a large redemption increase and now are nearly half of all redemptions 2014 Total U.S. CPG Coupon Redemption by Media FSI represented the largest share of redemption volume, and the remaining half was predominantly coupons promoted with the product package, handed-out or in a digital format REDEMPTION ANNUAL TOPLINE VIEW CPG COUPON FACTS TM Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity 7
8 Total U.S. CPG Coupon Redemption Volume by Class of Trade 2014 Drug Stores and the All Other retailers experienced similar increases in redemption primarily due to the increase in non-food coupon redemption Top 10 Retailers in CPG Coupon Redemption The top 10 retailer redeemers based on annual coupon redemption volume all remained on the list, although rank changed slightly for four of them REDEMPTION ANNUAL TOPLINE VIEW CPG COUPON FACTS TM Projections Based Upon NCH Measurements and Proprietary Modeling of Market Activity 8
9 NCH Coupon Facts Methodology and Source Description About the Publisher NCH Marketing Services, Inc., a Valassis Company, is a global leader in business solutions for the redemption, audit, settlement and analysis of promotion offers. Each year, NCH protects the financial integrity of nearly $4 billion in promotional funds transfers between trading partners across the globe. Annually, NCH publishes this report about U.S. coupon trends to provide a market-level understanding of the activities driving total coupon volume and the importance of safeguarding the coupon funds that are motivating the sale of branded consumer products for retailers and manufacturers. About Our Methodology With the volume of coupons processed by the company in the United States and worldwide, NCH is in a unique position to deliver accurate reporting and impartial analysis of coupon promotional trends with a comprehensive view of retailer redemption activity for over 60 percent of all coupons redeemed, including activity for 7 out of the top 10. This coverage, combined with our strategic partnerships, robust databases and inhouse expertise honed by nearly 60 years of coupon settlement experience, strengthens our ability to provide industry analysis of coupon trends. Coupons distributed and redeemed in the U.S. consumer packaged goods (CPG) marketplace are studied utilizing data from our market-share leading manufacturer and retailer businesses, supplemented by other independent sources. Our proprietary methodology utilizes rigorous controls and statistical standards to maintain the integrity of the information contained in this report, as well as all other information tools supplied by NCH. Data points from client and market sources are dynamic. As such, projections are based on the most current information available at the time of publication and may be revised in the future. Also, due to rounding, the sum of certain percentages may not equal 100 percent. The scope of this report includes manufacturer coupons of paper and paperless media formats that are most typically funded by CPG marketing budget allocations for consumer promotion. Retailer In-Ad coupons are not included in this report, as they are most often funded by trade dollars. Consequently, In-Ad distribution and redemption are less precisely tracked by manufacturers. How to Use this Report When reviewing market-level data, it is important to remember that companies or brands may experience results that materially differ from the averages. Competitive marketplace conditions, consumer behaviors and retail merchandising strategies are all contributing factors to the results companies or brands may experience with coupon promotions. As such, redemption should not be the only measurement of promotional success. Acknowledgments A special thanks to Marx, a Kantar Media solution, whose data is included in the analysis conducted to produce this report. Marx is the leading provider of syndicated coupon distribution information to manufacturers of consumer packaged goods. Marx delivers brand- and category-specific promotion intelligence for both advertisers and coupon industry vendors. Contact Information For more information about NCH, visit and follow us on To obtain additional information about this report, please contact NCH Analytical Services at or via at NCHAnalyticalServices@NCHMarketing.com. For press inquiries, or permission to cite, please contact Mary Broaddus, Valassis Corporate Communications, at or broaddusm@valassis.com. 9
10 Involved In Your Success TM NCH Marketing Services, Inc. I Tel I NCH Marketing Services, Inc. All rights reserved. 10
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