2020 VISION STAYING AHEAD OF Carman Allison, VP Consumer Insights, Nielsen

Transcription

1 2020 VISION STAYING AHEAD OF THE CURVE Carman Allison, VP Consumer

2 THE CHALLENGE FOR GROWTH 2 Copyright 2013 The Nielsen Company. Confidential and proprietary.

3 CANADIAN CPG OUTPACING THE US ON DOLLARS United States Canada Dollars Units Nielsen: Scantrack Total Tracked Sales 52 wks ending July 4, 2015 Dollars Units Nielsen: MarketTrack Total Tracked Sales 52 wks ending June 27,

4 2015 SHOWING THE IMPACT OF RISING PRICES Canadian CPG Dollar Sales YTD 2015 Unit Sales Trips per Shopper Source: Nielsen MarketTrack, National All Channels 52 weeks, YTD: 28 weeks to June 27, 2015 Total Tracked Sales excluding Fresh Random Weight Homescan Grocery Composite: 52 weeks Year End. Current 52 weeks to June 27,

5 WESTERN CANADA LEADS REGIONAL GROWTH 52 week Regional CPG Performance $ % Chg Unit % Chg National Maritimes Quebec Ontario Prairies B.C. Source: Nielsen MarketTrack, National All Channels 52 weeks Ending June 27, 2015 Total Tracked Sales excluding Fresh Random Weight 5

6 CPG RETAIL IS BEING REDEFINED TRADITIONAL 6 Copyright 2013 The Nielsen Company. Confidential and proprietary.

7 TRADITIONAL CPG CHANNELS KEEPING PACE WITH THE TOTAL MARKET PERFORMANCE Mass Merch. +3% Drug +3% Grocery +2% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 27, 2015 * Drug and C&G: MarketTrack, National All Channel, 52 weeks to June 27,

8 MANY RETAIL CHANNELS SUFFERING DUE TO THE SHIFT TO ONLINE AND INCREASED COMPETITION Mass Merch. +3% Drug +3% Grocery +2% US Cross Border 19% Electronic 17% Department 12% Office Supply 10% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 27, 2015 * Drug and C&G: MarketTrack, National All Channel, 52 weeks to June 27,

9 ETHNIC, ONLINE, DOLLAR, WAREHOUSE CLUBS LEAD CANADIAN RETAIL GROWTH Online* +21% Ethnic Grocery +16% Dollar Stores +9% Warehouse +9% Home/DIY +9% Gen Merch +7% Pet Specialty +5% Conv & Gas* +4% Mass Merch. +3% Drug +3% Grocery +2% Source: Nielsen Homescan Channel Watch Canada 52 weeks to June 27, 2015 * Drug and C&G: MarketTrack, National All Channel, 52 weeks to June 27, 2015 *Online Dec ember 27, 2014 US Cross Border 19% Electronic 17% Department 12% Office Supply 10% 9

10 TOP 5 RETAILER CONCENTRATION Top 5 CPG Top 5 Grocery 10

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12 DISCOUNT RETAILERS ARE GAINING A LARGER SHARE OF CONSUMER WALLETS Conventional Discount % % % % 1% 3% Total Trip Grocery Composite* Drug Composite** *Categories typically sold in a Grocery Store **Categories typically sold in a Drug Store Source: Homescan Retailer Watch, National All Channels 52 Weeks to June 27,

13 DISCOUNT RETAILERS REPRESENT 39% OF DRUG BASED SALES MAJOR GAINS IN THE PRAIRIES Drug Composite Discount $ Share & Growth % Discount Share & Growth Maritimes Quebec Conventional Ontario % Prairies B.C Source: Homescan Drug Watch, National All Channels 52 weeks to June 27, 2015 Drug Composite 13

14 CPG RETAIL IS BEING REDEFINED TRADITIONAL 14 Copyright 2013 The Nielsen Company. Confidential and proprietary.

15 HOW ARE THE HEALTH & BEAUTY DIVISIONS PERFORMING? $ Share of HABA OTC BODY CARE $12.4 Billion COSMETICS % of CPG +3% Source: Nielsen MarketTrack, National All Channels 52 weeks Ending July 25, 2015 BABY CARE HAIR CARE ORAL HYGIENE SHAVING

16 MAKING THE CUT IN HABA TOP 5 HABA CATEGORIES ($M) TOP GROWTH % CHG Foot Care +59% Face Care +1% Headache & Migraine Relief +2% Shampoo & Conditioners +4% Natural Health Supps +5% Diapers 2% Source: Nielsen MarketTrack, National All Channels, 52 weeks Ending July 25, 2015 > $5 million Men s Antifungals Cosmetic Kits Children s Bath Add. Energy & Nutrition +35% +31% +21% +21% BOTTOM GROWTH % CHG 8% Oral Back Remedies 7% 6% 6% Enemas Toothache Drops Feminine Wipes 6% Contact Lens Prep. 16

17 DRUG STORES REMAIN THE TOP DESTINATION FOR HABA SALES BUT LOSING SHARE $ Share Pt Chg Drug Stores 39.6% 34.7% 4.9 Grocery 23.4% 23.6% +0.2 Mass Merch. 21.4% 21.8% +0.4 Warehouse 7.0% 10.2% +3.2 Source: Nielsen Homescan Channel Facts 52 Weeks Ending June 27, 2015 Health Food 1.9% 2.0% +0.1 Remaining 6.7% 7.7%

18 2020 VISION: STAYING AHEAD OF THE CURVE 18

19 2020 VISION: STAYING AHEAD OF THE CURVE Shift from traditional to digital retail 19

20 E COMMERCE HAS GAINED MOMENTUM FOR CPG, BUT ON A SMALL SHARE BASE % 0.6% 1.1% Total Expenditures Source: Nielsen, Cross Outlet Facts, 52 weeks ending December 27, 2014 Grocery Composite Drug Composite $ % Chg Penetration 43% 17% 21% 20

21 WHICH CPG DEPARTMENTS ARE TRENDING ONLINE? FOOD (+17%) HEALTH & BEAUTY (+25%) NON GROCERY (+13%) Confectionery 0.7% +8 Cosmetics 1.9% +65 Gen Merch 3.3% +13 Beverages 0.6% +4 Baby Care 1.6% +28 Pet Needs 1.0% +16 Condiments 0.6% +35 Body Care 1.4% +22 Household 1.0% +15 Baking 0.5% +12 OTC 1.2% +21 Paper 0.8% +18 Snack 0.5% +18 Oral Hygiene 1.2% +31 Source: Nielsen, Cross Outlet Facts, 52 weeks ending December 27, 2014 E Commerce $ share and growth 21

22 CANADIANS LAG ONLINE GROCERY ORDERING % already using online grocery ordering: 13% Canada United States 7% 10% 10% 9% 8% 8% Global Delivery to Home 4% Virtual Supermarket Source: Nielsen, E Commerce, Digital Technology and Changing Shopper Preferences Around the World Report (April 2015) 3% Pick up in Store 2% Auto Subscription 3% Pick up Curbside 2% Drive thru Pick up 25% 13% 12% 14% 10% 12% 22

23 BUT GOOD INTENTIONS FOR FUTURE GROWTH % who would take advantage of these online options for GROCERY shopping 20% Delivered to home (+3 pts) 16% Pick up inside the store (+1 pts) 12% Use drive thru pick up (+1 pts) 10% Pick up curbside outside store (+1 pts) % Highly + Somewhat Likely Source: Nielsen 2015 Economic Impact Survey 23

24 ONLINE IS PROJECTED TO MORE THAN DOUBLE Today 2020 $ Share of CPG 2.1% 5.3% Bricks & Mortar Share LOSS Traditional Grocery Drug Stores Source: Nielsen, Homescan Cross Outlet Facts scanned UPC 2020 estimates GAIN Warehouse Club Ethnic Grocery Dollar Stores 24

25 YOUNGER URBAN HOUSEHOLDS WITH KIDS ARE MORE LIKELY TO SHOP ONLINE More likely 1.8X 1.5X 1.2X <35 Age Family Urban Source: Nielsen 2015 Economic Impact Survey 25

26 2020 VISION: STAYING AHEAD OF THE CURVE Shift from traditional to digital retail Urbanization is redefining how we live and shop 26

27 FASTEST CPG GROWTH CITIES ARE IN THE WEST Cities % of Population TOP 3 TOP 10 35% 54% Source: Nielsen PanelViews Survey, Statistics Canada Census 2011 MarketTrack: G+D+MM 52 weeks to June 27, 2015 Top 10 CPG Growth Cities Total HABA Vancouver +5% +6% Calgary +5% +5% Edmonton +5% +5% Niagara +5% +4% Sherbrooke +5% +3% Abbotsford +5% +5% Saskatoon +4% +3% Windsor +4% +4% Hamilton +4% +3% Regina +4% +1% 27

28 URBAN, SUBURBAN, RURAL Urban Suburban Rural $3,443 $4,102 $4, Age < >45 Source: Nielsen HomeScan, Grocery Composite, 52 weeks ending September 20, 2014 >$100K $70K $100K <$50K 28

29 THE URBAN CONSUMER 12% Less likely to own a car shopping closer to home with smaller baskets/more trips 19% Read store flyers on a smartphone (vs. 10% Rural) 12% More likely to buy smaller sizes 32% Source: Nielsen Panel Views Survey 2013/4 Of Males are the primary shopper (vs. 19% Rural) 29

30 2020 VISION: STAYING AHEAD OF THE CURVE Shift from traditional to digital retail Urbanization is redefining how we live and shop The male shopper is a key decision maker 30

31 MALE SHOPPERS ARE OFTEN OVERLOOKED BUT ACCOUNT FOR 24% OF PRIMARY SHOPPERS % of Households (>50% of Shopping) 24% 16% 60% Source: Nielsen Panelviews June

32 ENSURE IT S EASY FOR MALES TO FIND WHAT THEY NEED Male shoppers spend less but shop more often; less likely to browse and more likely to buy only what they need Avg Basket Size Avg Trips / Year Shopping Opinions % Agree $ I tend to buy only what I need 43% 54% $ Source: Nielsen Homescan, National All Channels, Total Expenditures, 52 Weeks ending July 26, 2014; Nielsen Panelviews June 2014 I like spending time browsing 50% 60% 32

33 THE MALE SHOPPER CAN BE MORE PROFITABLE 24% Of male spend is on perceived deal (28% for female) 13% Use coupons (67% for female) 12% Typically prepare a shopping list (78% for female) Source: Nielsen Panel Views Survey 2013/4 32% Are aged > 55 years (40% for female) 33

34 2020 VISION: STAYING AHEAD OF THE CURVE Shift from traditional to digital retail Urbanization is redefining how we live and shop The male shopper is a key decision maker Millennials will surpass Boomers as #1 consumer 34

35 MILLENNIALS AND BOOMERS: THE TOP 2 CONSUMER POWERHOUSES Millions <19 Gen Z 16% Source: Statistics Canada Census Millennials 27% Gen X 14% Boomers 28% 68+ Greatest 14%

36 CURRENTLY MILLENNIALS ARE UNDER REPRESENTED IN PURCHASING POWER Millennials Importance 27% 14% 12% % of Population 9.1 M Source: Source Nielsen Homescan 52 weeks to March 29, 2014 % Household Heads 2.0 M % of CPG $ s 11.7 B 36

37 MILLENNIALS WILL SURPASS BOOMERS BY M 26% 10.0 M 26% 11.0 M 26% 9.7 M 28% 9.4 M 24% 8.3 M 20% Total Canada 34.2 M 38.4 M 42.1 M Source: Statistics Canada M: Millions Millennials Boomers 37

38 THE CPG GROWTH ENGINE WILL SWITCH GEARS By 2020 MILLENNIALS BOOMERS +$12.6 B $4.3 B +107% Source: Nielsen Homescan 52 weeks to March 29, 2014 HH <35 years Based on older generation spend 9% 38

39 RESULTING IN A SHIFT IN FUTURE SHOPPER TRAFFIC FLOW Day of Week: Millennials 45% Sat Sun Older Boomers 46% Thurs Fri Source: Nielsen Panel Views Survey 2013 Canada Time of Day: Millennials Older Boomers 45% > 3 pm 41% < 12 pm 39

40 WHICH HABA DEPARTMENTS ARE MOST COMMONLY FOUND IN A MILLENNIALS SHOPPING BASKET? Relative Dollar Index <35 years Baby Care 344 Hair Care 110 Body Care 109 Cosmetics 101 Oral Hygiene 95 OTC 69 Nielsen Homescan Dollar Consumption Index 52 wks to June 27, 2015 Consumer Facts CPG Departments Relative Index (82 for total) 40

41 AGING IN AND AGING OUT As consumers age, they change their consumption of key HABA departments HH Dollar Index yrs 65+ yrs Trend OTC Oral Hygiene Cosmetics Body Care Hair Care Baby Care Nielsen Homescan Dollar Consumption Index 52 wks to December 28, 2013 Consumer Facts CPG Departments 41

42 MILLENNIALS ARE VALUE DRIVEN AND CONNECTED 73% Price is the first thing they look at (58% for total Canada) 42% Of Wallet in Discount Retailers (33% for Boomers) 26% Don t subscribe to cable TV (12% for Boomers) Source: Nielsen Panel Views Survey 2013/5 83% Have a smartphone (60% for total Canada) 42

43 2020 VISION: STAYING AHEAD OF THE CURVE Shift from traditional to digital retail Urbanization is redefining how we live and shop The male shopper is a key decision maker Millennials will surpass Boomers as #1 consumer 43

44 2020 VISION: STAYING AHEAD OF THE CURVE Diversify Portfolio to meet the emerging needs of ethnic and millennial consumers. Get Closer to the consumer focused on local market needs: Smaller stores & less assortment Copyright 2013 The Nielsen Company. Confidential and proprietary. Personalize your marketing programs through digital to build the one to one relationship as traditional media reach declines. Be Ready & Prepared for the disruption in retail. Online and digital will continue to grow and you need to partner with leading retailer programs. 44

45 CHASING THE CUSTOMER NOT THE COMPETITION! RONALD LUNDE 45 Copyright 2015 The Nielsen Company. Confidential and proprietary.

46 THANK YOU! Stay Connected to Consumer and Media Trends For the latest insights, visit 46 Copyright 2013 The Nielsen Company. Confidential and proprietary.

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