onsumers’ Shopping and Eating Patterns? · 2017. 7. 3. · 2 PREMIUMS HAVE SOARED Average annual health insurance premiums for family coverage $2,937 $5,277 $8,508 $12,865 2006

1

Presented by

What’s Driving Consumers’ Shopping and

Eating Patterns?

An IRI Perspective

2

PREMIUMS HAVE SOARED

Average annual health insurance

premiums for family coverage

$2,937 $5,277 $8,508 $12,865

20062016

20062016

WORKER SHARE EMPLOYER SHARE

Source: Kaiser/HRET Employer sponsored health benefits survey - 2016

In the midst of healthcare premiums rising…

3

and chronic diseases increasing…

230M by 2023

42% increase in

chronic diseases

Source: Milken Institute: “An Unhealthy America: The Economic Burden of Chronic Disease”

4

TREAT PREVENT

Over the Counter Products

Prescription Medication

Alt. Medicine & Services

Dietary Supplements Devices

Natural Products Food & Beverages

Home Remedies

…Consumers are adopting Holistic Health/Self Care which involves a 360° approach

5

37% of Consumers Say FOOD is Just As Powerful as MEDICATION

Food and Beverage Products are the Scaffolding for Building a Healthy Lifestyle

Better for You

Removal of Less Desirable Ingredients

Simpler Ingredients

Healthful Ingredients

ProteinOmega-3s

FiberFruits & Vegetables

Superfoods

Natural & Organic

Antibiotic-Free

Non-GMO

6

Dollar trends are positive across the fresh categories correlating to the diet trends…

36

20

19

12

84 2 100

Pharmacist

consultations

Alternative

therapies such

as home

remedies

Total Self-

Care

Vitamins/

Supplements

Over-the-

counter

products

Prescription

medicines

Doctor/

Lab visits

Lifestyle (diet,

exercise, etc.)

Source: IRI Self Care Survey

Meat

DeflationSeafood

StrengthProduce

Churn

Bakery

Softening

Deli Cheese

StrengthDeli Meat

Stable

Deli Prep

Growth

7

…and increase in vitamin/supplement trend…

36

20

19

12

84 2 100

Pharmacist

consultations

Alternative

therapies such

as home

remedies

Total Self-

Care

Vitamins/

Supplements

Over-the-

counter

products

Prescription

medicines

Doctor/

Lab visits

Lifestyle (diet,

exercise, etc.)

Source: IRI Self Care SurveySource: IRI POS data, MULO, 52 weeks ending 12/26/16

+1.1%UNIT SALES

8

…and even home devices too

36

20

19

12

84 2 100

Pharmacist

consultations

Alternative

therapies such

as home

remedies

Total Self-

Care

Vitamins/

Supplements

Over-the-

counter

products

Prescription

medicines

Doctor/

Lab visits

Lifestyle (diet,

exercise, etc.)

Source: IRI Self Care surveySource: IRI POS data, MULO, 52 weeks ending 12/26/16

+6.8%UNIT SALES

9

We have seen retailer Health & Wellnessprograms accelerate as a result of consumer demands

Nutritionists – classes,

1:1 consultation, etc.

Chef specialties

Online resources

10

Retailer online and in-store initiatives have continued to evolve

11

FRESH PERIMETER

Click and CollectPurchase of

Whole Foods

solves for:

SCALABILITY

Whole foods has 431

locations nationally

DEMOGRAPHICS

Whole Foods customers

likely to purchase online

and less price sensitive

Perishables

long thought to

be the hardest

part of online

Grocery

Amazon’s Whole Foods acquisition could radically change the game

12

0.4%

0.9%

1.7%

2.1%

1.1%1.2%

2.8%

Frozen General Food Refrigerated Beverages Total Food Total F&B FreshPerimeter

Fresh Perimeter outpacing Total Food & Beverage growth by more than 2X over the long term. Growth has slowed in the latest 18 months.

5-YEAR CAGR DOLLAR GROWTH

2.3X

Source: IRI FreshLook POS data, MULO, 52 weeks ending 05/14/17

13

Consumers go to the perimeter for fresh and healthy foods

$6.5B

+0.3% vs YAG

$2.8B

+3.1%vs YAG

$6.4B

+2.6%vs YAG

$11.5B

+4.1%vs YAG

$48.7B

-1.2%vs YAG

$63.4B

+3.3%vs YAG

$4.8B

+2.5%vs YAG

Source: IRI FreshLook POS data, MULO, 52 weeks ending 5/14/17

14

Total 2016 ABF Sales ($3.1B, 6.9% share, 22% 3-yr CAGR)

ABF’s share of Chicken is reaching critical mass

Source: IRI FreshLook POS data, MULO Full Year 2016

BEEF

28%3 yr CAGR

$1.83B

15.2%ABF share of

protein

CHICKENBEEF

16%3 yr CAGR

$909M

3.7%ABF share of

protein

$170M

6.1%ABF share of

protein

TURKEY

10%3 yr CAGR

PORK

22%3 yr CAGR

$239M

3.5%ABF share of

protein

15

Accelerated growth for Organic with less headroomTotal 2016 Organic Sales ($0.7B, 1.6% share, 32% 3-yr CAGR)

BEEF

29%3 yr CAGR

$489M

4.1%Organic share

of protein

CHICKENBEEF

38%3 yr CAGR

$203M

0.8%Organic share

of protein

$31M

1.1%Organic share

of protein

TURKEY

64%3 yr CAGR

PORK

18%3 yr CAGR

$7M

0.1%Organic share

of protein


16

Significant ABF distribution depth opportunity remains2016 ACV Distribution and Share Top ABF Cuts Ranked by Dollar Sales

56%

26%

22%

26%

32%

Ground

Wings

Drumsticks

Whole Bird

Boneless Breast 15.9%

15.9%

8.4%

6.8%

22.5%

ACV Distribution ABF Share


17

Retailers that support ABF/Organic meat grow faster

Top 20% of ABF/Organic Retailer RMAs grew

pounds 32% faster across Total Fresh Meat

3.6% pound growth

vs 2.8% Total 2016

US growth

18

Top 20% ABF/Organic retailers also grow perimeter categories significantly faster

2.8%

5.3%

9.0%

3.8%

6.7%

13.0%

Fresh Meat Fresh Prepared Deli Meat (ABF/Org)

Total US Growth LBS Top Tier Growth LBS

+32%

+26%

+44%

2016 Growth Total US vs. Top Tier Retailers

19

Social Strategy

& Sentiment

Drivers

20

Each day, every minute on average…

722,389FACEBOOK LOGINS

150 MILLIONEMAILS SENT

2.98 MILLIONVIDEO VIEWS

20.8 MILLION+MESSAGES

972,222SWIPES

$233,596IN SALES

527,760SNAPCHAT

STORIES

76,194INSTAGRAM

PHOTOS

21

Top Social Sentiment Drivers

FOOD

WASTE

+50%

FAIR FOOD/

FAIR WAGE

+104%

MEAT

CERTIFICATION/

CLAIMS

+223%

ANIMAL

WELFARE

+120%

SEAFOOD

SUSTAINABILITY

+97%

Source: IRI Social Advantage, 52 weeks ending 12/30/2016

22

Why The Concern?

FOOD

WASTE

+50%

FAIR FOOD/

FAIR WAGE

+104%

MEAT

CERTIFICATION/

CLAIMS

+223%

ANIMAL

WELFARE

+120%

SEAFOOD

SUSTAINABILITY

+97%


NOAA reports - Depletion of fishing stocks

Erosion of historical habitats

Controversial catch methods

Activist concerns evolving into consumer concerns

23

Sustainable Seafood Key Influencers

Top conversation influencers go beyond

niche advocacy organizations

2.2MM+downloads

24

Top Social Sentiment Drivers in 2016

FOOD

WASTE

+50%

FAIR FOOD/

FAIR WAGE

+104%

MEAT

CERTIFICATION/

CLAIMS

+223%

ANIMAL

WELFARE

+120%

SEAFOOD

SUSTAINABILITY

+97%


25

Animal Welfare Issues Cause Industry Earthquakes

Cage-Free Eggs Gestation Crate-Free Pork Antibiotic-Free Meat

26

Cage-Free Eggs

• Industry-wide retailer and

manufacturer pledges by 2025

12.5% 170

OF US FLOCKS

IN JAN 2017

PLEDGES FROM

RESTAURANTS

• Massive cost increases and

industry consolidation

• Demand may not be met

27

Gestation Crates

Major pledges from contract

and company farms

planned/implemented

15% 50%

CRATE FREE PLEDGE

Major retail and foodservice

commitments

SALES IN 2015 SALES IN 2022

28

Antibiotic-Free Meat

15% of 2016 chicken sales

40% by 2022

7%Exploding

Food Service

Commitment

OF TOTAL MEAT

RETAIL SALES

3.6% of 2016 beef and pork sales

• New USDA rules in 2017

29

Meat industry leveraging multitude of claims

30

Animal Certifications – Big opportunity

KEY ISSUES: • Differing standards and practices

• Consumer confusion

• Valued by consumers

30%EXTREMELY

IMPORTANT/

IMPORTANT FOR

PURCHASE

50%WILLING TO

PAY A PREMIUM

12%OF ANIMALS

COVERED BY

THE PROGRAMS

31

What’s on the Horizon?

Slow Growth Chickens

KEY ISSUES:

• Activist-led from Europe

• Early acceptance by foodservice

• Similar pattern to cage-free eggs

32


FOOD

WASTE

+50%

FAIR FOOD/

FAIR WAGE

+104%

MEAT

CERTIFICATION/

CLAIMS

+223%

ANIMAL

WELFARE

+120%

SEAFOOD

SUSTAINABILITY

+97%

33

Food Waste is a Worldwide Issue

2.8 trillionlbs of waste globally

40%of food is

wasted

totaling

$165B

21%of municipal

landfill use

Food waste

is

16%of methane

emissions

A 15% reduction in US food waste

could feed 25 million people

34

Europe is leading

France outlawed food waste from

supermarkets

New 2016 laws in place

Supermarkets cannot deliberately

destroy dated product

Must sign donation contracts with

food banks and charities

New simplified process for donation

15% increase

=

10 million more meals

35,000 tonsalready donated

annually

35

35%of U.S. consumers

want sustainable

packaging

51.9%

47.6%

35.5%

26.9%

Reduced Packaging Biodegradable

25-44 Total USSource: 2017 IRI Snacking Survey

What’s on the Horizon?

36


FOOD

WASTE

+50%

FAIR FOOD/

FAIR WAGE

+104%

MEAT

CERTIFICATION/

CLAIMS

+223%

ANIMAL

WELFARE

+120%

SEAFOOD

SUSTAINABILITY

+97%


37

Worker Issues are Holistic

Workforce

Development

ImmigrationWage Levels

Worker Conditions

38

Fair Wage / FoodRetailer/grower partnerships:

Worker conditions

Pay/Wage agreements

Formal governance

Structure

Education commitments

Certification Programs

39

Consumer

Attitudes & Behavior

40

Full Spectrum of Natural/Organic Buyers

Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel

Fears They

Won’t Like

Natural/Organic

Products

Proud of Buying

Natural/Organic

Products

True Believers

Enlightened Environmentalists

Strapped Seekers Indifferent Traditionalists

Healthy Realists

Resistant Non-Believers

Struggling Switchers

10% 10% 26% 15%

16%13%10%

41

True Believers

$70K

College /

Post Grad

West

42 avg. age

75% Caucasian

My Top 3 Priorities for…

Willing to Pay More For…

What Holds Me Back

My Sources of Info.

Food & Beverage Personal Care Home Care

Made w/all natural

ingredients

Free of chemicals Most effective

Made w/organic

ingredients

Made w/all natural

ingredients

Eco-Friendly

Best taste Most effective

ingredients

Made w/all natural

ingredients


Organic

Non-GMO

All Natural

Eco-Friendly

Fair Trade

Organic

All Natural

Eco-Friendly

Eco-Friendly

All Natural

Organic

• Expense of natural/organic products

• Availability of natural/organic options at

local store

• No all-natural/organic options available

for products I like


42

Enlightened Environmentalists

$59K

Post Grad

NE/West

61 avg. age

77% CaucasianSkew African American



What Holds Me Back

My Sources of Info.


Made w/all natural

ingredientsFree of chemicals Most effective

Best TasteMost effective

ingredientsEco-Friendly

Made w/organic

ingredients

Made w/all natural

ingredientsMulti-purpose


Organic

All Natural

Non-GMO

Eco-Friendly

Fair Trade

Organic

All Natural

Eco-Friendly

Eco-Friendly

All Natural

Organic

• Expense of natural/organic products


local store

Celebrity Chefs

Product Labels


43

Healthy Realists

$70KSkews $100K+

College+

Throughout

U.S.

39 avg. age

75% Caucasian



What Holds Me Back

My Sources of Info.


Best tasteMost effective

ingredientsMost effective

Made w/all natural

ingredientsIs on sale/coupon Is on sale/coupon

Is on sale/couponNot tested on

animalsMulti-purpose


All Natural


local store


44 44

More Natural/Organic inclined

Less Natural/Organic inclined

6562

47

41

21

9 4

62

35

13

20

2 1 1

All Natural Organic

OVERALL IMPORTANCE

All Natural: 31%

Organic: 15%

Consumer sentiment regarding All-Natural and Organic is highly polarizing

True Believers Enlightened

EnvironmentalistsHealthy Realists Strapped Seekers Indifferent

Traditionalists

Struggling Switchers Resistant

Non-Believers

45 45



57 5651

48 46

3833

55

46

3642

31 292426

19

43

28 27

42 42

No Antibiotics No GMO Minimally Processed

Similar sentiment is seen with ABF, Non-GMO and Minimally Processed

Enlightened

Environmentalists

OVERALL IMPORTANCENo Antibiotics: 46%

Non GMO: 36%

Minimally Processed 33%

True Believers Enlightened


Traditionalists


Non-Believers

46 46



61

46

27

49

2316 10

Segments who are more environmentally concerned are pre-disposed to buying from companies that practice humane treatment of animals

OVERALL IMPORTANCE

Humane Treatment: 30%


Enlightened

EnvironmentalistsTrue Believers Enlightened


Traditionalists


Non-Believers

47

11

15

14

17

9

9

10

8

23

21

18

17

15

13

The True Believers and Healthy Realists represent 25% of the population and a third of purchasing of random and fixed weight chicken.

NaturaLink Segments

Rfg Chicken* Dollar Distribution

*Fixed and Random Weight52 Wks Ending 12/25/16; Total US All Outlet

+2.1% +0.6%



Enlightened

EnvironmentalistsTrue Believers Enlightened


Traditionalists


Non-Believers

48

Executive Agenda for the Next 3-5 Years• ABF Chicken sales are reaching critical mass

• How will you take advantage of the opportunity

to increase distribution?

• Transparency and social issues directly impacts:

• Sales

• Brand health

Brand equity

• Develop your own 3-5 year view on how drivers and

category trends will evolve:

• Product requirements

• Sales impact

• Retail strategy

49

Presented by

Elizabeth [email protected]

Documents

onsumers’ Shopping and Eating Patterns? · 2017. 7. 3. · 2 PREMIUMS HAVE SOARED Average annual health insurance premiums for family coverage $2,937 $5,277 $8,508 $12,865 2006