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Confidential & Proprietary • Copyright © 2008 The Nielsen Company
U.S. Retailing& Consumer Trends
Jeff GregoriThe Nielsen CompanyOctober 23rd, 2008
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 2
• Economic Outlook
•U.S. Retail Trends
• Key Consumer Trends Health & Wellness
• Key Insights & Recommendations
Agenda
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 3
Overall Cost of Living Rising SharplyConsumers Can Not Keep Up With Necessities
Source: U.S. Department of Labor Statistics (Consumer Price Index; U.S. City Average); USDA, NAR, BLS
Fuel OilGallon
GasolineGallon
Breadpound
GroundBeefpound
Chickenpound
Eggsdozen
Milkhalf
gallon
48%
35%27%
16%10%13%
7% 3%
Wages
Housing
- 8%
12 Month Percentage Increase, Selected Items (March 2007 vs. March 2008)
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 4
Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels!
78% combining shopping trips & errands (+ 10 pts from YAGO),
52% eating out less (+ 14 pts),
51% staying home more often (+ 12 pts) &
63% of U.S. consumers are reducing spending (+ 18 pts)!
Nielsen Homescan Gas Impact Study
Saving Money in What & How they Buy & Where They ShopImpact higher gas prices had on driving & spending habits? Check all
Jun/Jul ‘05
Jun/Jul ‘06
Jun‘07
Jun‘08
Buy less expensive grocery brands 17% 22% 19% 35%
Use more coupons 20% 24% 21% 32%
Shop more @ Supercenters 22% 26% 23% 28%
Buy Larger, Economy Size 10% 11% 10% 16%
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 5
So, Tough Times for Growth & How Important Are Value, Variety & Convenience to You?
• How are you equipped to compete against Value, Variety or Convenience?• Are you providing Value,
Variety & Convenient solutions to categoryconsumers & retail shoppers?• An integral part of these
themes is innovation
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 6
U.S. Retailing Trends
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 7
145,624
37,399
32,027
6,584
19,805
3,178
1,167
124,516
39,660
30,682
6,421
13,151
1,583
907
Convenience
Drug
Supermarkets
Mass Merch
Dollar Stores
Supercenters
Warehouse Clubs
2001Mid-2008
Value & Convenience Winning As Evidenced By Increased Store Count
U.S. Store counts
Supermarkets have not grown at the rate of other retail channels – no wonder the channel has lost
shopping trips!
Source: Trade Dimensions® & TDLinx®, services of The Nielsen Company
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 8
Shopping Behavior Trends
• Retailers can grow their sales by:– Increasing their shopper base–Driving shopping frequency–Building baskets
• Leveraging categories & brands that impact one or more of these components• Driving “need state” trip
opportunities–Health & wellness–Meal occasions–Large versus small trips–Time-starved consumers
Source: Homescan®, a service of The Nielsen Company
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 9
99
81
81
64
68
51
41
3.8
100
95
86
59
51
50
45
3.6
Grocery
Mass Merch
Drug
Dollar
Supercenters*
Warehouse
Conv/Gas
Military2001
Mid-2008
*Includes Kmart, Target & Wal-Mart Supercenters
Value Winning As Evidenced By Consumer Acceptance
Benefits from new store openings
% US household penetration
Source: Homescan®, a service of The Nielsen Company** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 10
59
26
15
14
14
13
11
20
72
20
24
15
15
11
10
24
Grocery
Supercenters*
Mass Merch
Drug
Conv/Gas
Dollar
Warehouse
Military2001
Mid-2008
Grocery & Mass trips continue to drop
*Includes Kmart, Target & Wal-Mart Supercenters
Value Channels Grabbing TripsTrips per household
Source: Homescan®, a service of The Nielsen Company** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables
-17%
-18%
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 11
Value Retailing Driving Price Compression
$98
$64
$49
$40
$23
$19
$14
$63
$82
$51
$39
$32
$19
$10
$11
$59
Warehouse
Supercenters*
Mass Merch
Grocery
Drug
Conv/Gas
Dollar
Military
2001
Mid-2008
*Includes Kmart, Target & Wal-Mart Supercenters**Source: Progressive Grocer
Average $ basket ring—total expenditures
**
Source: Homescan®, a service of The Nielsen Company** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables
One Stop Shopping
A Key Strength For Military
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 12
Military Channel mostly competing for Larger Stock Up Trips (>$64) very similar to Club
7
14
22
32
51
55
73
12
16
24
28
30
24
23
18
18
30
32
28
26
13
10
6
29
47
30
23
12
11
11
3
41
Warehouse Clubs
Supercenters
Mass Merch
Grocery
Drug
C-Stores
$ Stores
Military
Immediate Fill In Routine Stock-up
Total US—Nielsen Homescan—52 weeks ending 7/1/2006
% of channel dollars by trip type
Immediate = <$31Fill In = >$31 <= $64Routine = $64 - $125
Stock Up = >$125
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 13
0
20
40
60
80
100 $100k +
$70 - $99.9k
$50 - $69.9k
$40 - $49.9k
$30 - $39.9k
$20 - $29.9k
< $20k
Next to Club, no channel appeals more to higher income households than the Military Channel
What can the Military Channel learn from Club
retailers?
% sales from all shoppers
Source: Homescan®, a service of The Nielsen Company―Total US—52 weeks ending 6/28/2008
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 14
Value channel (Dollar, Mass & Club) growth coming from ALL income segments!
-10
0
10
20
Dollar Stores Total Mass Grocery Club Drug
Low Income Mid-Income High Income
Source: MY 2008 Vs. MY 2007 Account Shopper Profiler
Low Income = < $20K, Mid Income $20K-$99.9K, High Income >$100K
$ % Chg V. Year Ago - By Income Group
Flat
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 15
Low income households unlikely to trade up, but high income households will trade down
7884
4030
79
46
65
87
6350
81
4147
78 7568
83
33
DollarStores
Wal-Mart Target Club Drug C-Stores
Low Income Mid-Income High IncomeSource: Mid-Year 2008 Homescan
Low Income = < $20K, Mid Income $20K-$99.9K, High Income >$100K
Penetration By Income Group
11 MillionHH’s
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 16
Dollar Stores Expanding Assortment
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 17
Retailers – How Are the Winners Winning?
Convenient Shopping Solutions
BAG & CHECKOUT ASYOU SHOP!
ANTICIPATE SHOPPERNEEDS
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 18
Marketside – Wal-Mart’s Newest Banner
• First 4 Locations Near Phoenix, AZ– 7561 E. Baseline Road, Mesa– 910 E. Elliott Road, Gilbert– 950 N. McQueen Road, Chandler– 838 W. Elliott Road, Tempe
• 15,000-20,000 Square Feet of Selling Space–Half the Size of a Neighborhood Market
This new banner allows Wal-Mart to attract upscale shoppers without the Wal-Mart name or the “Big Box” image.
http://www.marketside.com
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 19
Retailers Performing Well In Tough Economy
•Costco July sales rose 14%, same-store up 10%•BJ’s July same-store sales up 16.7%, excluding gasoline,
same-store up 7%•Dollar Tree posted 12.5% increase in sales during fiscal
2nd qtr, comp-store up 6.5%•Kroger 1st qtr sales up 11.5%, identical supermarket
sales up 9.2% with fuel & 5.8% without • Family Dollar July sales rose 7.2%, same-store up 4.6%•Walgreen Co. July sales up 10.7%, same-store up 4.1% •Wal-Mart 2nd qtr sales up 10.1%, same-store up 4.5%
Source: Industry e-newsletters & company web sites
= Stock-up & Save Consumer Motivation
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 20
Retailers Performing Well In Tough Economy
•Costco July sales rose 14%, same-store up 10%•BJ’s July same-store sales up 16.7%, excluding gasoline,
same-store up 7%•Dollar Tree posted 12.5% increase in sales during fiscal
2nd qtr, comp-store up 6.5%•Kroger 1st qtr sales up 11.5%, identical supermarket
sales up 9.2% with fuel & 5.8% without• Family Dollar July sales rose 7.2%, same-store up 4.6%•Walgreen Co. July sales up 10.7%, same-store up 4.1% •Wal-Mart 2nd qtr sales up 10.1%, same-store up 4.5%
Source: Industry e-newsletters & company web sites
= Value SeekingConsumer Motivation
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 21
Retailers Performing Well In Tough Economy
•Costco July sales rose 14%, same-store up 10%•BJ’s July same-store sales up 16.7%, excluding gasoline,
same-store up 7%•Dollar Tree posted 12.5% increase in sales during fiscal
2nd qtr, comp-store up 6.5%•Kroger 1st qtr sales up 11.5%, identical supermarket
sales up 9.2% with fuel & 5.8% without• Family Dollar July sales rose 7.2%, same-store up 4.6%•Walgreen Co. July sales up 10.7%, same-store up 4.1% •Wal-Mart 2nd qtr sales up 10.1%, same-store up 4.5%
Source: Industry e-newsletters & company web sites
= Value & ConvenienceConsumer Motivation
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 22
Retailers Performing Well In Tough Economy
•Costco July sales rose 14%, same-store up 10%•BJ’s July same-store sales up 16.7%, excluding gasoline,
same-store up 7%•Dollar Tree posted 12.5% increase in sales during fiscal
2nd qtr, comp-store up 6.5%•Kroger 1st qtr sales up 11.5%, identical supermarket
sales up 9.2% with fuel & 5.8% without• Family Dollar July sales rose 7.2%, same-store up 4.6%•Walgreen Co. July sales up 10.7%, same-store up 4.1% •Wal-Mart 2nd qtr sales up 10.1%, same-store up 4.5%
Source: Industry e-newsletters & company web sites
= Value & 1-Stop ShopConsumer Motivation
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 23
Key Consumer Trends
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 24
• Make them key component of messaging and/or understand how to take advantage of indulgent consumers
• Improve reaction time to new diets & eating trends
• In-store health clinics growing–Wal-Mart to add 400 by 2010
Short & Long-term Growth Can Be Accomplished With Consumer FocusHealth & Wellness opportunities are here to stay
GrainsVeggiesFruitsOilsDairyMeat/Beans
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 25
Many Health & Wellness Claims ShowStrong Growth vs. Year Ago
Health & 52-Week Chg VsWellness Claim Dollar Sales Year AgoNatural $21.8 Billion +11.4%Low Fat $14.9 Billion +3.9%Absence of Specific Fat $13.3 Billion +30.5%
(Trans Fat or Saturated Fat)
Reduced Calories $11.3 Billion +9.7%Cholesterol Free $10.6 Billion +8.6%Fat Free $10.0 Billion +5.2%Reduced Fat $8.5 Billion +9.6%No Calories $5.8 Billion -0.6%Caffeine Free $5.5 Billion -2.2%Organic $4.7 Billion +22.5%Multi-Grain $2.1 Billion +16.6%Antioxidants $1.9 Billion +15.8%Good Source of Fiber $1.6 Billion +1.8%
Source: Nielsen LabelTrends, Total U.S. FDMxWM, 52 Weeks Ending 9/6/08
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 26
12%
12%
6%
6%
23%
15%
32%
37%
24%
19%
73%
143%
Fat Presence
Natural
Calorie Presence
PreservativePresence
Organic
Fiber Presence
% Chg. 4 Yrs. Ago
% Chg. YA
$4.7 Billion
$3.5 Billion
Organics Have Grown Considerably Over 4 Years, but Sales Volume Small Compared to Other H&W Trends
$13.6 Billion
$17.3 Billion
$21.9 Billion
$46.8 Billion
52 Week Sales
Source: Nielsen Strategic Planner, 52 Weeks Ending 8/9/08
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 27
Recent Weeks Show Less Aggressive Organic Growth
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
% Chg. $ Sales
% Chg. Units
Source: Nielsen Strategic Planner
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 28
Organic % Chg. Organic Shr.Department Dollar Sales YA of Dept.
Fresh Produce (UPC-coded) $869 Million +26% 6.3%Dairy $1,475 Million +20% 3.5%Fresh Meat (UPC-coded) $30 Million +23% 1.9%Dry Grocery $1,836 Million +24% 1.3%Frozen Foods $339 Million +23% 1.1%Deli (UPC-coded) $28 Million +27% 0.5%Packaged Meat $37 Million +25% 0.4%Alcoholic Beverages $24 Million +32% 0.1%HBA $41 Million +27% 0.1%Total Organics $4,680 Million +23% 1.3%
In which aisles are Organic products most prevalent? UPC Fresh Produce & Dairy
Source: Nielsen Strategic Planner, 52 Weeks Ending 8/9/08
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 29
Organic Sales % Organic ShareCategory Dollar Sales Chg.YA of CategoryMilk $1,018 Million +18% 7.5%Fresh Produce (UPC-coded) $869 Million +26% 6.3%Soft Drinks – Non Carb $67 Million +4% 6.1%Yogurt $180 Million +21% 5.0%Baby Food $167 Million +23% 4.4%Eggs $142 Million +29% 4.1%Dessert/Fruit/Toppings Froz $40 Million +36% 3.6%Soup $139 Million +17% 3.3%Dried Fruit $34 Million +46% 3.0%Jams/Jellies/Spreads $52 Million +45% 2.9%Tea $70 Million +28% 2.8%Cereal $185 Million +12% 2.5%Breakfast Foods $56 Million +60% 2.4%Flour $12 Million +37% 2.4%Canned Vegetables $72 Million +36% 2.2%Total Organics $4,680 Million +23% 1.3%
Organics Comprise Less Than 1% Share for Most Categories
Source: Nielsen Strategic Planner, 52 Weeks Ending 8/9/08Nielsen tracks 76 categories with organic claim.
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 30
“Big Names” in Organics Some Manufacturers have created Organic Line Extensions
Source: Nielsen Strategic Planner: FDM 52 Weeks Ending 1/27/2007
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 31
“Big Names” in Organics Several Large Manufacturers Produce Organic Products
Under a Different Brand Names
Source: Organic News
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 32
Driven to health by all means
Dedicated to health through smart nutrition and weight management
High belief in the value of supplements – less concern with food
Low belief in the value of healthy categories
16% FOOD
ACTIVES
19% FENCE
SITTERS
19%MAGIC
BULLETS
25%WELL
BEINGS
(% of U.S. general population adults…)
17% EAT, DRINK & BE
MERRYS
Least concerned & knowledgeable
about health & healthy eating
Meet the Health &Wellness Segments:
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 33
1823 22
14
2319 20 23
15
24
Well Beings Food Actives Magic Bullets Fence Sitters Eat Drink &Be Merry
Total Military Shoppers Total Mkt Shoppers
23% of Military Shoppers are Food Actives
% Shoppers
Source: Homescan®, a service of The Nielsen Company
93 117 98 95 95Shopper
Index
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 34
Military Shoppers most likely to be FOOD ACTIVES and EAT DRINK & BE MERRY type shoppers
WELL BEINGS
FOOD ACTIVES
MAGIC BULLETS
FENCE SITTERS
EAT DRINK & BE MERRYS
MILITARY 97 108 98 89 105
Whole Foods 241 35 162 45 23
Wegmans 134 127 71 88 88
Costco 111 111 117 81 82
Sam’s Club 88 117 118 85 91
Safeway Grocery Corp 106 93 105 106 94
Target Banner 105 101 92 100 103
Wal-Mart Banner 84 93 94 110 115
Read as: Costco $ sales are 11% greater than industry among WELL BEINGS
Dollar Spend Index v. Avg HH
Source: Homescan®, a service of The Nielsen Company―Total US—52 week ending 09/06/2008
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 35
FOOD ACTIVES
FOOD ACTIVE 16%Health-Related Eating healthy is vital, over three-fourths eat
heart smart
Believe maintaining proper weight is key to healthful living
Low use of natural and organic food
Most apt to count calories and use artificial sweeteners instead of sugar
Highest use of prescription drugs; lowest use of alternative healthcare
(% of population…)
Branding Influences Most likely to choose products for which they
have a coupon
Lower than average levels of LOHAS environmental values
Branding Influences Most likely to choose products for which they
have a coupon
Lower than average levels of LOHAS environmental values
Dedicated to health through healthy eating, avoiding negatives and adding those with nutritional benefits. FOOD ACTIVES are driven by a desire for balance of exercise, nutrition, and weight management.
Dedicated to health through healthy eating, avoiding negatives and adding those with nutritional benefits. FOOD ACTIVES are driven by a desire for balance of exercise, nutrition, and weight management.
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 36
Health & Wellness Segments Show Different Category Preferences
WELL BEINGS
FOOD ACTIVES
MAGIC BULLETS
FENCE SITTERS
EAT DRINK & BE MERRYS
Yeast 159 129 69 155 27
Flour 130 100 108 91 78
Fresh Produce 120 111 108 91 77
Yogurt 119 112 111 84 80
Wine 129 125 113 78 66
Beer 91 95 90 107 114
Read as: Flour $ sales are 30% greater than average HH among WELL BEINGS
Source: Homescan®, a service of The Nielsen Company―Total US—52 week ending 09/06/2008 – upc-coded products
Dollar Spend Index v. Avg HH
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 37
Summary & Closing Thoughts
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 38
Key Insights & Recommendations
1. More than ever, shoppers of all economic means are seeking “value”
– Combining shopping trips
– Eating more meals at home & doing more “at-home” entertaining
– Seeking the right mix of value, variety, & convenience
– BUT AT ACCELERATED LEVELS
The Military Channel is more important than ever to its customers
– More shoppers are taking advantage of the Military Channel as UPC product penetration has increased to 3.8% (4.4 MM) but shopping frequency is has eroded
– How aggressive are we advertising “The Military Channel Value proposition” to shoppers versus Mass, Dollar & Club stores?
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 39
2. The Military Channel Health & Wellness strategy should consider the following elements:
– Key Assortment Drivers of Health & Wellness
o Natural, Preservatives, Fat and Calorie Presence Claims offer the Military Channel opportunity to build Health & Wellness equity with its customers more than Organics
o Potential Organic category entry points for the Military Channel includes:
Primarily Center Store - Non-Carb Soft Drinks, Baby Food, Soup, Dried Fruit, Jams/Jellies, Tea, Cereal, Breakfast Foods & Canned Vegetables
Perimeter Areas – Milk, Yogurt, Eggs
Organic Frozen can be a differentiation point for Military versus competitive channels. This sector is undeveloped for Organics, but the Total Frzoen Dept is real strength at Military.
Key Insights & Recommendations
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 40
3. The “Food Actives” Shopper Segment is a significant opportunity for the Military channel to drive growth with Health & Wellness
o A big target for Military as 23% are considered Food Actives (1MM+ Shoppers)
75% eat Heart Smart and Count Calories
Most likely to use Artificial Sweeteners instead of Sugar
Most likely to choose products for which they have a Coupon
o While these shoppers already spend 8% more than the average shopper in Military, we need to define ourselves somewhere between Sams (117) & Wegmans (127)
Key Insights & Recommendations
Confidential & Proprietary • Copyright © 2008 The Nielsen Company
Thank You!
Mid-Year Update
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 42
Appendix
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 43
Health & Wellness Segmentation Methodology
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 44
• NMI’s analysis of the U.S. population’s attitudes and behaviors regarding health and wellness has long indicated that there are clearly identifiable psychographic health and wellness segments.
• In 2001, NMI developed a proprietary health and wellness segmentation of U.S. consumers. Based on more than 40 measures, the Health and Wellness segmentation has become a cornerstone of the Health & Wellness Trends Report (HWTR). The five segments identified have been quite robust over time, displaying strong consistency from year to year.
• NMI’s analysis of the U.S. population’s attitudes and behaviors regarding health and wellness has long indicated that there are clearly identifiable psychographic health and wellness segments.
• In 2001, NMI developed a proprietary health and wellness segmentation of U.S. consumers. Based on more than 40 measures, the Health and Wellness segmentation has become a cornerstone of the Health & Wellness Trends Report (HWTR). The five segments identified have been quite robust over time, displaying strong consistency from year to year.
NMI Health & Wellness Segmentation Methodology
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 45
• The formal analytical model measures commonalities and differences between five distinct consumer groups using k-means cluster analysis. The comprehensive statistical modeling process used to derive NMI’s health and wellness consumer segmentation is based on the following techniques and methodologies:
• Exploratory and confirmatory factor analysis of nearly 200 measures of consumer attitudes and behaviors regarding health and wellness, organic products, supplements, exercise, and many other topics. The analysis identified more than 25 potential factors
• The identification of 31 measures from the factor analysis that best represented each of the potential factors identified and maintained consistency with the previous years’ segmentation solution
• K-means cluster analysis which examined numerous potential solutions to determine which segmentation model provided the optimal solution, based on the following criteria:
•Maximum differentiation between consumer groups
•Maximum homogeneity within each consumer group
• The formal analytical model measures commonalities and differences between five distinct consumer groups using k-means cluster analysis. The comprehensive statistical modeling process used to derive NMI’s health and wellness consumer segmentation is based on the following techniques and methodologies:
• Exploratory and confirmatory factor analysis of nearly 200 measures of consumer attitudes and behaviors regarding health and wellness, organic products, supplements, exercise, and many other topics. The analysis identified more than 25 potential factors
• The identification of 31 measures from the factor analysis that best represented each of the potential factors identified and maintained consistency with the previous years’ segmentation solution
• K-means cluster analysis which examined numerous potential solutions to determine which segmentation model provided the optimal solution, based on the following criteria:
•Maximum differentiation between consumer groups
•Maximum homogeneity within each consumer group
NMI Health & Wellness Segmentation Methodology
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 46
NMI: Unparalleled Expertise in Health, Wellness & Sustainability
NMI is an international strategic consulting, market research, and business development company specializing in the health, wellness, and sustainability marketplace.
Since 1990, NMI has focused on the well-being of people and products, and the environmental and social responsibility of the planet. NMI owns the only H&W consumer database.
Health & Wellness – Nielsen & NMI Service Introduction
April 18, 2023 Confidential & ProprietaryCopyright © 2008 The Nielsen Company
U.S. Retailing & Consumer Trends
Page 47
EAT, DRINK & BE MERRYSEAT, DRINK & BE
MERRYS 23%
Health-Related Least likely to agree that consumption of healthy,
nutritious food is important to a healthy lifestyle
Lowest monthly expenditure on healthy and natural products
Driven more by taste and to select emotional, “feel-good” products
Least likely to read labels
(% of population…)
Branding Influences Most likely to choose store brand and buy on price
Least likely to associate personal values with brand choice
Branding Influences Most likely to choose store brand and buy on price
Least likely to associate personal values with brand choice
Least concerned about health and healthy eating; least knowledgeable about health-related benefits. Know they should eat healthier, but don’t. Most focused on taste.
Least concerned about health and healthy eating; least knowledgeable about health-related benefits. Know they should eat healthier, but don’t. Most focused on taste.
Health & Wellness – Nielsen & NMI Service Introduction
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WELL BEINGS
WELL BEING 25%Health-Related High use of healthy food such as soy
food/beverages, fiber, organic food/beverages
Spend significantly more on healthy and natural products
As challenged to eat right as other segments, yet are the most successful at healthy eating
Choose natural/organic over conventional
Above average use of alternative healthcare
(% of population…)
Branding Influences Least likely to base purchase decisions on price; choose
quality regardless of cost; concerned about brand image
Most likely to shop natural channel, including Trader Joe's and Whole Foods Market
Early adopters and influencers
Purchase from companies that share their values
Branding Influences Least likely to base purchase decisions on price; choose
quality regardless of cost; concerned about brand image
Most likely to shop natural channel, including Trader Joe's and Whole Foods Market
Early adopters and influencers
Purchase from companies that share their values
Driven to health by all means, including food, supplements, and other products. Strong preference for concepts that are natural and organic, with strong environmental linkage.
Driven to health by all means, including food, supplements, and other products. Strong preference for concepts that are natural and organic, with strong environmental linkage.
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MAGIC BULLETS
MAGIC BULLETS 19%Health-Related Above average interest in, understanding, and use
of organic and natural food/ beverages
Highest use of functional/fortified food/beverages
Highest usage of weight loss food and artificial sweeteners
Highest use of OTC, alternative healthcare, homeopathic remedies, condition specific supplements, VMHS; high use of Rx
(% of population…)
Branding Influences Average brand loyalty, less concerned with brand
image
After WELL BEINGS, most likely to shop Trader Joe’s and Whole Foods Market
More likely to choose products for which they have a coupon
Branding Influences Average brand loyalty, less concerned with brand
image
After WELL BEINGS, most likely to shop Trader Joe’s and Whole Foods Market
More likely to choose products for which they have a coupon
High belief in and usage of supplements for health, andless concern with food. Among the groups most actively managing weight, sensitive to environmental concerns, and some leanings toward natural and organic. Healthy convenience resonates with this group.
High belief in and usage of supplements for health, andless concern with food. Among the groups most actively managing weight, sensitive to environmental concerns, and some leanings toward natural and organic. Healthy convenience resonates with this group.
Health & Wellness – Nielsen & NMI Service Introduction
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U.S. Retailing & Consumer Trends
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FENCE SITTERS
FENCE SITTERS 17%
Health-Related Lower belief in the connection between diet and
health
Less than average use of most healthy food categories
Less concerned about sugar, high fructose corn syrup, and artificial sweeteners
(% of population…)
Branding Influences Average brand loyalty
Concerned about brand image
More likely to buy on price
Less environmentally sensitive
Branding Influences Average brand loyalty
Concerned about brand image
More likely to buy on price
Less environmentally sensitive
Primarily younger households with kids, who buy on price and are driven by the “family” diet. They are neutral on most health issues, with a low belief in the value of healthy categories
Primarily younger households with kids, who buy on price and are driven by the “family” diet. They are neutral on most health issues, with a low belief in the value of healthy categories
Health & Wellness – Nielsen & NMI Service Introduction
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Good Alignment Between NMI & Homescan – Consistent Segment Sizes
25 19
1619
19 22
17 16
23 24
NMI H&WS Homescan H&W
EAT, DRINK, & BEMERRYS™
FENCE SITTERS™
MAGIC BULLETS™
FOOD ACTIVES™
WELL BEINGS™
% Population % Households
Source: NMI 2007 H&W Consumer Trends Database™; Homescan®, a service of The Nielsen Company
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Who is the Military Shopper?
• HHLD Income $40K+• Female Head Age 55+• Affluent Suburban Spreads• Younger Bustling Families• Empty Nest Couples• Senior Couples• Not In Work Force• African American• Asian• Non-Caucasian
Demographics of the average Military Shopper
• HHLD Income $40K+• Female Head Age Under 35• Female Head Age 65+• 2 Member Household• 3 – 4 Member Household• 5+ member Household• Affluent Suburban Spreads• Younger Bustling Families• Empty Nest Couples• Senior Couples• Not In Work Force• African American• Asian• Non-Caucasian
Demographics of HEAVY Military Shopper
Your Most Important shoppersHeavy Shoppers represent approximately
82% of total military volume
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Who is the Military Shopper?
• HHLD Income $40K+• Female Head Age 55+• Affluent Suburban Spreads• Younger Bustling Families• Empty Nest Couples• Senior Couples• Not In Work Force• African American• Asian• Non-Caucasian
Demographics of the average Military Shopper
• HHLD Income $50K - $99k• Female Head Age 65+• Modest Working Towns• Senior Couples• Not In Work Force• African American• Asian• Non-Caucasian
Demographics of LIGHT Military Shopper
Light “occasional” shoppersLight Shoppers represent approximately
18% of total military volume