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2020 VISIONSTAYING AHEAD OF THE CURVE
@CarmAllison@NielsenCarman Allison, VP Consumer Insights, Nielsen
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THE CHALLENGE FOR GROWTH
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United States
Nielsen: MarketTrack ‐ Total Tracked Sales52 wks ending June 27, 2015
Canada
+2.9 +0.4
Dollars
Nielsen: Scantrack ‐ Total Tracked Sales52 wks ending July 4, 2015
UnitsDollars Units
+2.0 ‐0.4
CANADIAN CPG OUTPACING THE US ON DOLLARS
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0.50.1 0.2 0.5 0.2
2.4 2.5
1.52.0
3.1
2011 2012 2013 2014 YTD 2015Dollar Sales
Unit Sales
132 130 126 123 122
Trips per Shopper
Canadian CPG
Source: Nielsen MarketTrack, National All Channels – 52 weeks, YTD: 28 weeks to June 27, 2015 ‐ Total Tracked Sales excluding Fresh Random WeightHomescan Grocery Composite: 52 weeks Year End. Current 52 weeks to June 27, 20145
2015 SHOWING THE IMPACT OF RISING PRICES
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3 3
2
33
4
01
0
01
2
National Maritimes Quebec Ontario Prairies B.C.
$ % Chg Unit % Chg
WESTERN CANADA LEADS REGIONAL GROWTH
52 week Regional CPG Performance
Source: Nielsen MarketTrack, National All Channels – 52 weeks Ending June 27, 2015 ‐ Total Tracked Sales excluding Fresh Random Weight
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TRADITIONAL
CPG RETAIL IS BEING REDEFINED
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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, 2015
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MANY RETAIL CHANNELS SUFFERING DUE TO THE SHIFT TO ONLINE AND INCREASED COMPETITION
US Cross Border ‐19%Electronic ‐17%Department ‐12%Office Supply ‐10%
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
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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%
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%
Mass Merch. +3%Drug +3%Grocery +2%
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TOP 5 RETAILER CONCENTRATION
Top 5 CPG
Top 5 Grocery
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+3.1
+2.8+1.2
+2.3
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DISCOUNT RETAILERS ARE GAINING A LARGER SHARE OF CONSUMER WALLETS
68.358.3 60.8
31.7 41.7 39.2
Total Trip Grocery Composite* Drug Composite**
Conventional Discount
+7% +7% +4%
‐1% ‐1% ‐3%
*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, 2015
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60.8
39.2
DISCOUNT RETAILERS REPRESENT 39% OF DRUG BASED SALES – MAJOR GAINS IN THE PRAIRIES
$ Share & Growth
Discoun
tCo
nven
tiona
l
+4%
‐3%
Discount Share & Growth
Maritimes 21.7 ‐1
Quebec 35.0 +3
Ontario 44.9 +3
Prairies 40.9 +9
B.C. 34.6 ‐1
Source: Homescan Drug Watch, National All Channels ‐ 52 weeks to June 27, 2015 Drug Composite
Drug Composite
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TRADITIONAL
CPG RETAIL IS BEING REDEFINED
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HOW ARE THE HEALTH & BEAUTY DIVISIONS PERFORMING?
Source: Nielsen MarketTrack, National All Channels – 52 weeks Ending July 25, 2015
$12.4 Billion18% of CPG
38.5
20.7
10.9
10.9
8.7
6.6
3.8
OTC
BODY CARE
COSMETICS
BABY CARE
HAIR CARE
ORAL HYGIENE
SHAVING
+5
+2
+3
+1
+2
+3
+0+3%
$ Share of HABA
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Cosmetic Kits
Foot Care
Men’s Antifungals
Children’s Bath Add.
Energy & Nutrition
+59%
+35%
+31%
+21%
+21%
TOP ‐ GROWTH % CHG
BOTTOM ‐ GROWTH % CHG
Toothache Drops
Oral Back Remedies
Enemas
‐8%
‐7%
‐6%
‐6%
‐6% Contact Lens Prep.
Feminine Wipes
MAKING THE CUT IN HABA
Source: Nielsen MarketTrack, National All Channels, 52 weeks Ending July 25, 2015 > $5 million
Face Care+1%
Headache & Migraine Relief+2%
Shampoo & Conditioners+4%
Diapers‐2%
Natural Health Supps+5%
TOP 5 HABA CATEGORIES ($M)
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DRUG STORES REMAIN THE TOP DESTINATION FOR HABA SALES – BUT LOSING SHARE
$ Share 2009 2015 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
Health Food 1.9% 2.0% +0.1
Remaining 6.7% 7.7% +1.0
Source: Nielsen Homescan Channel Facts ‐ 52 Weeks Ending June 27, 2015
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2020 VISION: STAYING AHEAD OF THE CURVE
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Shift from traditional to digital retail
2020 VISION: STAYING AHEAD OF THE CURVE
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E‐COMMERCE HAS GAINED MOMENTUM FOR CPG, BUT ON A SMALL SHARE BASE
Source: Nielsen, Cross Outlet Facts, 52 weeks ending December 27, 2014
2.0% 0.6% 1.1%
TotalExpenditures
GroceryComposite
DrugComposite
$ % Chg +21 +19 +18
+0.3
+0.1
+0.2
Penetration 43% 17% 21%
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WHICH CPG DEPARTMENTS ARE TRENDING ONLINE?
Source: Nielsen, Cross Outlet Facts, 52 weeks ending December 27, 2014 – E‐Commerce $ share and growth
Confectionery 0.7% +8
Beverages 0.6% +4
Condiments 0.6% +35
Baking 0.5% +12
Snack 0.5% +18
Cosmetics 1.9% +65
Baby Care 1.6% +28
Body Care 1.4% +22
OTC 1.2% +21
Oral Hygiene 1.2% +31
Gen Merch 3.3% +13
Pet Needs 1.0% +16
Household 1.0% +15
Paper 0.8% +18
FOOD (+17%) HEALTH & BEAUTY (+25%) NON GROCERY (+13%)
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CANADIANS LAG ONLINE GROCERY ORDERING% already using online grocery ordering:
Source: Nielsen, E‐Commerce, Digital Technology and Changing Shopper Preferences Around the World Report (April 2015)
7%
4%3%
2%3%
2%
13%
10% 10%9%
8% 8%
Delivery to Home
Virtual Supermarket
Pick‐up in Store
Auto Subscription
Pick‐up Curbside
Drive‐thru Pick‐up
Canada United States
25% 13% 12% 14% 10% 12%Global
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BUT GOOD INTENTIONS FOR FUTURE GROWTH
20%
16%
12%
Delivered to home (+3 pts)
Pick up inside the store (+1 pts)
Pick up curbside outside store (+1 pts)
Use drive‐thru pick up (+1 pts)
10%
% who would take advantage of these online options for GROCERY shopping
% Highly + Somewhat LikelySource: Nielsen 2015 Economic Impact Survey
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ONLINE IS PROJECTED TO MORE THAN DOUBLE
Source: Nielsen, Homescan Cross Outlet Facts – scanned UPC – 2020 estimates
Today 2020
2.1% 5.3%$ Share of CPG
Bricks & Mortar Share
Traditional GroceryDrug StoresLOSS
Warehouse ClubEthnic GroceryDollar Stores
GAIN
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YOUNGER URBAN HOUSEHOLDS WITH KIDS ARE MORE LIKELY TO SHOP ONLINE
<35
Age Family Urban
Source: Nielsen 2015 Economic Impact Survey
1.8X 1.5X 1.2XMore likely
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Urbanization is redefining how we live and shop
Shift from traditional to digital retail
2020 VISION: STAYING AHEAD OF THE CURVE
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FASTEST CPG GROWTH CITIES ARE IN THE WEST
35%
54%
TOP
3
TOP
10
Cities % of Population
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%
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URBAN, SUBURBAN, RURAL
Source: Nielsen HomeScan, Grocery Composite, 52 weeks ending September 20, 2014
$3,443 $4,102 $4,357
Age <44 35‐54 >45
2‐32‐4 1‐2
<$50K>$100K $70K ‐ $100K
Urban Suburban Rural
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THE URBAN CONSUMER…
12% Less likely to own a car – shopping closer to home with smaller baskets/more trips
12% More likely to buy smaller sizes
32% Of Males are the primary shopper (vs. 19% Rural)
Source: Nielsen Panel Views Survey 2013/4
19% Read store flyers on a smartphone (vs. 10% Rural)
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Urbanization is redefining how we live and shop
The male shopper is a key decision maker
Shift from traditional to digital retail
2020 VISION: STAYING AHEAD OF THE CURVE
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% of Households (>50% of Shopping)
24% 16% 60%
MALE SHOPPERS ARE OFTEN OVERLOOKED BUT ACCOUNT FOR 24% OF PRIMARY SHOPPERS
Source: Nielsen Panelviews June 2014
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Male shoppers spend less but shop more often; less likely to browse and more likely to buy only what they need
Source: Nielsen Homescan, National All Channels, Total Expenditures, 52 Weeks ending July 26, 2014; Nielsen Panelviews June 2014
$32.41
$37.72
I tend to buy only what I need
I like spending time browsing
161
152
Avg Trips / Year Shopping Opinions % AgreeAvg Basket Size
43% 54%
50% 60%
ENSURE IT’S EASY FOR MALES TO FIND WHAT THEY NEED
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THE MALE SHOPPER CAN BE MORE PROFITABLE
24% Of male spend is on perceived deal (28% for female)
12% Typically prepare a shopping list (78% for female)
13% Use coupons (67% for female)
32% Are aged > 55 years (40% for female)
Source: Nielsen Panel Views Survey 2013/4
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Urbanization is redefining how we live and shop
The male shopper is a key decision maker
Millennials will surpass Boomers as #1 consumer
Shift from traditional to digital retail
2020 VISION: STAYING AHEAD OF THE CURVE
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MILLENNIALS AND BOOMERS: THE TOP 2 CONSUMER POWERHOUSES
<19‘Gen Z’16%
19‐37‘Millennials’27%
38‐47‘Gen X’14%
48‐67‘Boomers’28%
68+‘Greatest’14%
Source: Statistics Canada – Census 2011
5.7 9.4 4.7 9.8 5.0 Millions
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CURRENTLY MILLENNIALS ARE UNDER REPRESENTED IN PURCHASING POWER
Millennials’ Importance
27%
Source: Source Nielsen Homescan – 52 weeks to March 29, 2014
14% 12%
% of Population
9.1 M
% Household Heads
2.0 M
% of CPG $’s
11.7 B
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37Source: Statistics Canada M: Millions
2010 2020 2030
Millennials Boomers
MILLENNIALS WILL SURPASS BOOMERS BY 2020
26%
28%
8.9 M9.7 M
26%
24%
10.0 M9.4 M
26%
20%
11.0 M8.3 M
34.2 M 38.4 M 42.1 MTotal Canada
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THE CPG GROWTH ENGINE WILL SWITCH GEARS
By 2020…
Source: Nielsen Homescan 52 weeks to March 29, 2014 – HH <35 years – Based on older generation spend
+$12.6 B
+107%‐$4.3 B
‐9%
BOOMERSMILLENNIALS
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RESULTING IN A SHIFT IN FUTURE SHOPPER TRAFFIC FLOW
Source: Nielsen Panel Views Survey 2013 ‐ Canada
45% Sat‐Sun
46% Thurs‐Fri
45% > 3 pm
41% < 12 pm
Day of Week:
Time of Day:
Millennials
Older Boomers
Millennials
Older Boomers
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WHICH HABA DEPARTMENTS ARE MOST COMMONLY FOUND IN A MILLENNIALS’ SHOPPING BASKET?
Nielsen Homescan – Dollar Consumption Index – 52 wks to June 27, 2015 – Consumer Facts CPG Departments Relative Index (82 for total)
Relative Dollar Index <35 years
Baby Care 344
Hair Care 110
Body Care 109
Cosmetics 101
Oral Hygiene 95
OTC 69
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AGING IN AND AGING OUT
Nielsen Homescan – Dollar Consumption Index – 52 wks to December 28, 2013 – Consumer Facts CPG Departments
HH Dollar Index 55‐64 yrs 65+ yrs Trend
OTC 115 150
Oral Hygiene 105 106
Cosmetics 105 88
Body Care 94 84
Hair Care 93 66
Baby Care 30 18
As consumers age, they change their consumption of key HABA departments
+
‐
‐
‐
‐
+
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MILLENNIALS ARE VALUE DRIVEN AND CONNECTED
73% Price is the first thing they look at(58% for total Canada)
26% Don’t subscribe to cable TV(12% for Boomers)
42% Of Wallet in Discount Retailers (33% for Boomers)
83% Have a smartphone(60% for total Canada)
Source: Nielsen Panel Views Survey 2013/5
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Urbanization is redefining how we live and shop
The male shopper is a key decision maker
Millennials will surpass Boomers as #1 consumer
Shift from traditional to digital retail
2020 VISION: STAYING AHEAD OF THE CURVE
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• 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
• 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.
2020 VISION: STAYING AHEAD OF THE CURVE
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CHASING THE CUSTOMER … NOT THE COMPETITION!
RONALD LUNDE
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THANK YOU!
Stay Connected to Consumer and Media Trends
For the latest insights, visit us nielsen.com
@CarmAllison@Nielsen