SNACK ATTACK UNLOCKING SNACKING GROWTH

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1 SNACK ATTACK UNLOCKING SNACKING GROWTH Robert Kolatschek Director Customer & Shopper Insight

2 An Introduction Source:

3 A GLOBAL SNACKING POWERHOUSE Global Power Brands North American and Local Gems Category Global Share Position Canada Share Position Biscuits #1 #1 Chocolate #1 #2 Gum #2 #2 Candy & Cough #1 #1 Source: Nielsen MarketTrack 2014

4 OUR OBJECTIVE TODAY UNDERSTANDING THE SNACK SHOPPER IN-STORE IMPLEMENTATION

5 The Snacking Context

6 SNACKING IS LARGE AND IS OUTPACING TL CPG AND F&B Canadian Snacking Landscape $10.8B its growth is crucial to driving strong TL store growth Sources: Nielsen Strategic Planner, National GB+DR+MM PE Dec 13, 2014, Nielsen MarketTrack, National GB+DR+MM, PE Dec 28, 2014,

7 SNACKING IS HOW PEOPLE EAT TODAY it will continue to lead growth into the future US IRI State of the Snack Industry 14

8 GROCERY STORES REMAIN THE TOP DESTINATION FOR SNACK PURCHASES Source: Nielsen Global Survey Q Canada

9 BUT DESPITE BEING THE TOP DESTINATION FOR SNACK SALES GROCERY IS LOSING SHARE Source: Nielsen Homescan Channel Facts - 52 Weeks Ending September 27, 2014 Snack + Confections

10 REGAINING SNACKING SHARE IS A SIZABLE OPPORTUNITY $400MM GROCERY CHANNEL OPPORTUNITY 1 Source 1: Based on regaining the $ share lost from 2009 to Nielsen Homescan Channel Facts - 52 Weeks Ending September 27, 2014 Snack + Confections

11 Snacking Mythbusters

12 SNACKING MYTH #1 When buying snacks, Shoppers primarily look for treats they can indulge in!

13 3 OVERARCHING NEED STATES DRIVE SNACKING CHOICES Substantial items that energize and sustain me BFY choices A pleasure, a treat Reward and indulgence Relaxation and Munching & REFRESH MY MIND Help me wake up and start my day Give me an energy boost Refresh me 48% Dollars 47% Dollars 5% Dollars Source: Nuvista Global Snacking Market Structure for Mondelez

FUTURE GROWTH IN THE SNACKING LANDSCAPE WILL BE DRIVEN BY 9 SNACKING MOMENTS NO REGRET TREAT ANYTIME PICK ME UP DELIGHTFUL VARIETY ENERGIZE MY MIND

14 FUTURE GROWTH IN THE SNACKING LANDSCAPE WILL BE DRIVEN BY 9 SNACKING MOMENTS NO REGRET TREAT ANYTIME PICK ME UP DELIGHTFUL VARIETY ENERGIZE MY MIND EXPAND ENTERTAINING SNACKING SENSIBLY ACCELERATE ACCOMPANIMENT HELP MEAL SKIPPERS EASIER ON THE GO Source: Nuvista Global Snacking Market Structure for Mondelez

15 FUTURE GROWTH IN THE SNACKING LANDSCAPE WILL BE DRIVEN BY 9 SNACKING MOMENTS NO REGRET TREAT ANYTIME PICK ME UP DELIGHTFUL VARIETY SNACKING SENSIBLY HELP MEAL SKIPPERS ENERGIZE MY MIND SNACKING SENSIBLY DELIGHTFUL VARIETY EASIER ON THE GO ANYTIME PICK ME UP EXPAND ENTERTAINING HELP MEAL SKIPPERS NO REGRET TREAT ACCELERATE ACCOMPANIMENT ENERGIZE MY MIND TOTAL 5-YEAR $ GROWTH +$329MM +$216MM +$165MM +$127MM +$115MM +$106MM +$100MM +$55MM +$20MM +$1,233MM EXPAND ENTERTAINING ACCELERATE ACCOMPANIMENT EASIER ON THE GO Source: Nuvista Global Snacking Market Structure for Mondelez

Help Meal Skippers Time Scarcity driving evolving mealtimes more informal and expedient Meal blurring - 27% of snacking is at mealtime or replaces

16 Help Meal Skippers Time Scarcity driving evolving mealtimes more informal and expedient Meal blurring - 27% of snacking is at mealtime or replaces a meal 1 42% of consumers use snacks as a breakfast alternative 2 Source: 1: Nielsen Consumption Diary : Nielsen Global Survey Canada - Q1 2014

17 HELP MEAL SKIPPERS THE BATTLE FOR BREAKFAST

SNACKING SENSIBLY 61% of Consumers want more protein in their diets 1 Protein is mentioned in social conversations as the #2 key to managing weight behind Fat and ahead

18 SNACKING SENSIBLY 61% of Consumers want more protein in their diets 1 Protein is mentioned in social conversations as the #2 key to managing weight behind Fat and ahead of Calories 2 New launches are aimed around more portable forms Source 1: Nielsen Global Survey Q Canada 2: NPD 14; Latent View Social Listening Analytics, US, 2015

19 SNACKING SENSIBLY PROTEIN PORTABILITY

20 SNACKING MYTH #1 When buying snacks, Shoppers look for treats they can indulge in! Snacking is driven by a repertoire of 9 Consumer driven Snacking Moments ensure your merchandising solutions speak to these Moments and you have a balanced presence across your store

21 SNACKING MYTH #2 Snacks are typically a planned purchase, so we just need to direct Shoppers to the appropriate aisle in the store!

22 MOST SHOPPERS DON T SHOP THE SNACK AISLES Nearly 2/3 store customers do NOT walk down the Snack aisle(s) But 52% of those who walk down the aisle(s) buy - vs. 34% avg. Center Store Source: VideoMining Grocery Centre Store MegaStudy, 2012

23 SNACK PURCHASES ARE OFTEN IMPULSIVE 40% of Grocery shoppers indicate they are more likely to purchase Snacks on impulse vs. other products Source: Kantar Custom Path to Purchase Survey 11/12

24 Chocolate Frozen ice cream & novelties Gum Cookies Nuts, dried fruit, raisins Any fresh bakery Salty snacks Sauces Crackers Any pepared meals Frozen pizza meals/snacks Salad dressings Spices/seasoning Frozen dinners & entrees Wholesome snacks SNACK PURCHASES ARE OFTEN IMPULSIVE 51% Unplanned Purchases 44% 43% 42% 42% 39% 38% 38% 37% RED = Core Snack Categories 35% 34% 33% 33% 31% 31% 50 Categories Source: Kantar Retail ShopperGenetics 52 weeks ending 04/2014

25 Bottled water Yogurt Salty Snacks Bars Crackers Cookies Chocolate CSDs Cereal Gum Candy Cheese Bread Meat Snacks Rice Cakes SNACK PURCHASES ARE HIGHLY EXPANDABLE 78% 77% Rate of Expandability 70% 70% 69% 66% 63% 62% 59% 58% 56% RED = Core Snack Categories 48% 45% 45% 44% Snacks Avg. 56% Tl Food Avg. 42% Long Tail Non-Food Avg. 15% Expandable Consumption = consumers who buy the snack category on promotion tend to increase their snack purchase rate more than those who buy from other categories on promotion Source: Kantar Retail ShopperGenetics 52 weeks ending 04/2014

26 SNACK SHOPPERS PURCHASE MORE THAN ORIGINALLY INTENDED 30% of Grocery shoppers leave the store with more Snacks than they intended to buy Source: Kantar Custom Path to Purchase Survey 11/12

BASKETS THAT CONTAIN A SNACK PRODUCT ARE SIGNIFICANTLY MORE VALUABLE THAN THE AVG BASKET $ Total Basket Per Trip Total Outlets $68.20 $64.20 $81.60 $89.90 $46.

27 BASKETS THAT CONTAIN A SNACK PRODUCT ARE SIGNIFICANTLY MORE VALUABLE THAN THE AVG BASKET $ Total Basket Per Trip Total Outlets $68.20 $64.20 $81.60 $89.90 $46.30 TL GROCERY COMPOSITE TL CONFY + BISCUITS CATEGORIES TOTAL CONFECTIONARY TL COOKIES & GRAHAMS TTL CRACKERS Source: Nielsen Cross-Outlet Facts, 52W ending June 2015

28 SNACKING MYTH #2 Snacks are typically a planned purchase, so we just need to direct Shoppers to the appropriate aisle in the store! The opportunity is to leverage the impulse nature of Snacks to activate additional purchases around the store and increase basket size

29 SNACKING MYTH #3 Snacking Activation is complete once I have the right assortment on shelf and number of displays in my store!

30 DRIVING GROWTH BY CHANGING THE ENVIRONMENT Environment Changing the environment will change shopper behaviour Behavior Behavior change is the only way to drive growth Growth Source: Kantar Custom Path to Purchase Survey 11/12

31 MONDELEZ 5S SHOPPER FRAMEWORK

32 SHOPPER TRAFFIC: STOCK-UP TRIP 34% Of Grocery Trips Stock Up: 16+ Total Units Purchased Source: VideoMining Grocery Centre Store MegaStudy, 2012

33 SHOPPER TRAFFIC: FILL-IN TRIP 23% Of Grocery Trips Fill In: 5-15 Total Units Purchased Source: VideoMining Grocery Centre Store MegaStudy, 2012

34 SHOPPER TRAFFIC: QUICK TRIP 43% Of Grocery Trips Quick Trips: 1-4 Total Units Purchased Source: VideoMining Grocery Centre Store MegaStudy, 2012

35 SHOPPER TRAFFIC: QUIZ What % of Shoppers walk down a snack aisle? Source: VideoMining Grocery Centre Store MegaStudy, 2012

36 SHOPPER TRAFFIC: QUIZ What % of Shoppers go through the Front Entrance?

37 SHOPPER TRAFFIC: QUIZ What % of Shoppers go through the CheckOut?

38 LOCATE HIGH IMPULSE SNACKING DISPLAYS IN HIGH TRAFFIC AREAS OF THE STORE Front +101% lift Rear +92% lift In-Aisle +88% lift Lobby +120% lift Perimeter +94% lift Locate display where the shoppers are: Lobby area Front/Back ends Perimeter area Locate displays early in the traffic flow Spread displays along the perimeter in the shopper s path Locating Snacking aisles EARLY in the trip vs. late in the trip can drive velocity Source:Mondelēz International Global Point of Buying Research

39 MAXIMIZE THE SEE - ENSURE 360 DEGREE VISIBILITY OF MERCHANDISING TOOLS

40 MAXIMIZE THE SEE - ENSURE MERCH TOOLS ARE IN THE SHOPPER LINE OF SIGHT

41 MAXIMIZE THE SEE - ENSURE MERCH TOOLS ARE IN THE SHOPPER LINE OF SIGHT

42 MAXIMIZE THE SEE - ENSURE PRODUCTS ARE SHELVED FOR FULL VISIBILITY

43 SNACKS ARE OFTEN UNPLANNED, SO PARTNER WITH COMPLEMENTARY PLANNED CATEGORIES Optimal Aisle Partners Basket Index 194 Complementary categories are those that are often used and purchased together Partner impulse with planned categories that will naturally bring shoppers down the aisle Source: Nielsen WEIB report All Outlet L52 end 8/25/12

44 MAXIMIZE THE SEE MERCHANDIZE WITH PLANNED COMPLIMENTARY CATEGORIES Chocolate with flowers Arrowroot with Diapers Gum with coffee

45 SNACKING MYTH #3 Snacking Activation is complete once I have the right assortment on shelf and number of displays in my store! Develop strategies to increase visibility of impulse Snack items via the RIGHT location in store consider both shopper traffic flow & complementary categories

46 OUR OBJECTIVE TODAY UNDERSTANDING THE SNACK SHOPPER IN-STORE IMPLEMENTATION

47 OUR OBJECTIVE TODAY leverage the impulse nature of Snacks to increase basket size! $400MM GROCERY CHANNEL OPPORTUNITY 1 increase visibility via the RIGHT location in store consider both shopper traffic flow & complementary categories! balanced merchandising presence of the 9 Snacking Moments across your store! Source 1: Based on regaining the $ share lost from 2009 to Nielsen Homescan Channel Facts - 52 Weeks Ending September 27, 2014 Snack + Confections

48 SNACK ATTACK UNLOCKING SNACKING GROWTH Robert Kolatschek Director Customer & Shopper Insight

Cold Facts About Frozen Foods

Cold Facts About Frozen Foods HOT TOPIC REPORT October 2012 Update ver since Clarence Birdseye first developed a process to freeze and preserve food nutrients and flavor in 1944, the frozen food industry