U.S. RETAIL COFFEE BUSINESS UPDATE

Transcription

1 U.S. RETAIL COFFEE BUSINESS UPDATE Steve Oakland President, Coffee and Foodservice Danielle Barran Vice President of Marketing, Coffee 1

2 U.S. Retail Coffee Segment Growth $1.7 Net Sales (in billions) 5-Year CAGR 4% $2.1 Segment Profit (in millions) $488 5-Year CAGR 2% $549 FY10 FY15 FY10 FY15 3 U.S. Retail Coffee Segment Focused on keeping our iconic brands the preferred choice of consumers. $2.2 Billion PROJECTED FY16 NET SALES Instant K-Cup Premium Premium Mainstream R&G Instant K-Cup 4 2

3 At-Home Coffee Category 3% 9% 4-Year 4% CAGR 38% 9% 10% 7% $6.6B $9.2B 30% 23% 47% % Mainstream 2011 R&G Premium Instant One 2015 Cup Other Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended September 11, 2011 and September 6, One Cup Sales Growth is Decelerating ONE CUP RETAIL SALES (in billions) $2.2 $2.9 $3.5 $1.4 $ YOY Growth 124% 56% 31% 19% Growth percentages may not calculate due to rounding Source: Smucker Internal Multi-Outlet Share Report years ended September 2011, 2012, 2013, 2014, and

4 Share of At-Home Coffee Segments Smucker is a key player in all segments of the at-home coffee category. (U.S. Retail Markets) 100 Total Mainstream Category R&G Premium One Cup Instant DOLLAR SHARE Category Size $9.2B $2.7B $2.2B $3.5B $0.7B Smucker Top Branded Competitor All Other Branded Competitors Private Label Source: Smucker Internal Multi-Outlet Share Report 52 weeks ended September 6, Breadth of Coffee Makers in Households Significant Growth in One-Cup % 8% Automatic Drip One Cup French Press Espresso & Cappuccino Percolator Moka Pot & Stove Top Source: Smucker Custom Quantitative Research, 2009 and

5 Breadth of Coffee Makers in Households Increase in Households for All Types of Coffee Makers 75% 69% % 8% 14% 3% 4% 8% 6% 10% 8% 2% Automatic Drip One Cup French Press Espresso & Cappuccino Percolator Moka Pot & Stove Top Source: Smucker Custom Quantitative Research, 2009 and U.S. RETAIL COFFEE BUSINESS UPDATE Danielle Barran Vice President of Marketing, Coffee 5

6 Why We Coffee 80% OF AMERICANS Drink Coffee 4 OUT OF 5 Cups are Consumed At-Home vs. Away COFFEE HAS THE 3 RD Highest Share of all Food and Drinks Consumed $9.2 BILLION Spent Annually in the Retail Coffee Category 10 TH LARGEST Edible Category in Retail 2 OUT OF 3 Warm Beverage Aisle Dollars are Coffee Source: National Coffee Association, 2015; The NPD Group, 2014; Smucker Internal Multi-Outlet Share Report 52 weeks ended September 6, 2015; IRI Reviews, 52 weeks ended February 23, Coffee Segment Roles 50.6M HOUSEHOLDS 38.3M HOUSEHOLDS 34.3M HOUSEHOLDS 28.7M HOUSEHOLDS MAINSTREAM ROAST AND GROUND Highest Buyer Count Strongest Loyalty Brewed in Most Popular Machine (ADC) PREMIUM Offers Gourmet Brands in a Roast and Ground Form Brewed in Most Popular Machine (ADC) ONE CUP Highest Dollar Share Bringing in New Households Delivers Convenience and Personalization INSTANT Highest Consumption among Hispanic and Older Households Least Price Sensitive of all Segments Source: IRI Panel Data, 2015; Smucker Internal Multi-Outlet Share Report 52 weeks ended September 6,

7 Top Consumer & Retail Coffee Trends Coffee Ritual Coffee as an Experience Rise of Variety Seekers Personalization Indulgence Convenience 13 Coffee Ritual: Folgers An increasingly integral part of the morning routine. 80% of Coffee Consumption Occurs in the Morning Morning Consumption is Growing Coffee is More than a Routine; It's a Ritual that Enhances the Day The best part of wakin up. Source: National Eating Trends, 2 years ending May, 2015, point change vs. 2 years ending May,

8 Coffee as an Experience: Café Bustelo Creating a unique coffee experience and driving brand awareness. BROADENING THE APPEAL TO CULTURALLY OPEN MILLENNIALS POP-UP CAFÉ S NEW YORK CITY CHICAGO LOS ANGELES AUSTIN FESTIVALS CHICAGO SAN FRANCISCO LAS VEGAS AUSTIN 15 Rise of Variety Seekers: Dunkin Donuts Providing flavor and roast options for variety seeking consumers. 16 8

9 Personalization: Folgers Perfect Measures The cup you want, just the way you like it. 100% Ground Coffee, No Additives Offers Consistency and Control for Personalization A Convenient, No Mess Option 17 Indulgence: Folgers Flavors Indulge in me time or a special treat. Remix Your Favorite Roasts Any Way You Want and Savor the Flavor 18 9

10 Convenience: K-Cups and Ready to Drink Easy access to your coffee anytime, anywhere. K-Cups Positioned for Growth with Multiple K-Cup Offerings Including Our Latest Launch Ready to Drink On-trend Convenient Coffee Option 19 Uniquely Positioned to Drive Growth Drive Folgers Growth and Market Share through Innovation and Brand Building Initiatives Grow Dunkin Donuts Presence Through Cross-Promotion with Bagged and K-Cup Offerings Position Café Bustelo to Win with Emerging Consumer Groups 20 10