Healthy Growth: How to Capitalize on the Changing Consumer

HEALTHY GROWTH
HOW TO CAPITALIZE ON THE CHANGING
CONSUMER LANDSCAPE & THEIR HEALTH NEEDS
Todd Hale, SVP, Consumer & Shopper Insights, Nielsen
Steve French, Managing Partner, NMI
August 25, 2014
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
AGENDA
• Why Should We Care About Health & Wellness?
• How Are Consumer Segments Responding to Healthy Food Options?
• Retail Health & Wellness Engagements
• Trends, Opportunities & Challenges in Health & Wellness
• Closing Thoughts
2
WHY SHOULD WE CARE
ABOUT HEALTH & WELLNESS?
All Departments
Dollar Sales
Unit Volume
$800
Billions
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
IS FLAT THE BEST WE CAN EXPECT?
$600
$400
$200
$0
2009
2010
2011
2012
2013
52 w/e 07/05/2014
Dollar Trend
+2
+4
+3
+1
+1
Unit Trend
+1
+1
-0
+0
+0
Average U Price Trend
+1
+3
+3
+1
+1
Any Promo U Trend
+2
-0
-2
+0
+1
Shouldn’t an economic recovery be delivering more growth?
Source: Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands (UPC), % Change, 52 week periods vs. year ago
4
All Departments – Dollar Sales & Trend
$400
Supermarkets
Billions
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
VALUE & CONVENIENCE WINNING
Value*
$300
0.8%
$200
$100
1.2%
C-Stores
Drug Stores
2.0%
$0
Low Growth
0.9%
High Growth
Total measured channels: $778 Billion & up 1.1%
Source: Nielsen Scantrack, Total U.S., 52 weeks ending 07/05/2014 (vs. year ago), UPC-coded; *Club Stores, Dollar Stores, Mass-Merchandisers, Military
5
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HOW DOES THE CPG INDUSTRY GROW IN
THE CURRENT ENVIRONMENT?
WHAT CAN FUEL GROWTH?
Innovation
Crowded
shelves
Slowing population
growth
Product
enhancements
Underdeveloped
consumer segments
Stagnant
wages
WHAT’S WORKING AGAINST GROWTH?
6
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HEALTH & WELLNESS OUTPACING RETAIL GROWTH
Average Unit Growth
-0.2%
13%
17%
Total store
Organic label
claims since 2010
Top 5 fastest growing
healthy label claims
Source: Nielsen Strategic Planner & Nielsen Wellness Track, Total U.S. - All Outlets Combined (xAOC), total store & top 5 based on 52-weeks ending 6/7/2014 vs. year ago; organic based on
average 4-weeks ending 7/10/2010 through 4-weeks ending 6/7/2014; UPC-coded
7
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
“THE WHOLE WORLD HAS A WEIGHT PROBLEM”
13%
Global Perspective on Obesity & Overweight Population
47%
37%
28%
The U.S. accounts for more than a tenth of the obese
people worldwide, with only 5% of the population
14%
Increase in Obesity &
those Overweight since 1980
Adults
5%
Percentage who were
Obese & Overweight in 2013
Children
Source: Institute for Health Metrics and Evaluation at the University of Washington; Frank Pompa, USA TODAY
8
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
FOCUS ON HEALTH IS NOT A PASSING FAD
Even in America’s ballparks, the shift is clear
9
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
WHY DOES HEALTH & WELLNESS MATTER?
65%
35%
of the world’s population live in
countries where overweight & obesity
kills more people than underweight
of U.S. adults are obese
Source: World Health Organization; Centers for Disease Control 2012
Leading to some of the foremost
causes of preventable death…
heart disease, stroke, type 2
diabetes & certain types of cancer
10
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
BUT THE EPIDEMIC IS NOT EVENLY DISPERSED
MULTI
CULTURAL
AGE
Obesity Rate
Obesity Rate
48%
35%
of Non-Hispanic Blacks
60 plus
43%
of Hispanics
INCOME &
EDUCATION
40%
40 to 59
33%
30%
of Non-Hispanic Whites
20 to 39
11%
of Non-Hispanic Asians
Source: Centers for Disease Control & Prevention
• Higher income woman are less likely to be obese
• Women with college degrees less likely to be obese
11
HOW ARE CONSUMER SEGMENTS
RESPONDING TO HEALTHY OPTIONS?
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
GOOD NEWS: OLDER & YOUNGER POSE UNTAPPED
OPPORTUNITY FOR WINNING WELLNESS CLAIMS
SALES PER 1,000 HOUSEHOLDS INDEX BY AGE OF FEMALE HEAD OF HOUSEHOLD
Female head
Under 35
Label claim:
35 – 45
55 – 65
65+
Low Glycemic
GMO Free
Gluten Free
Hormone Antibiotic Free
CONSUMERS ARE
APPROACHING PREVENTION
DIFFERENTLY
Organic
High Fructose Corn Syrup Free
Lactose Free
Protein Presence
Preservative Free
Index is:
Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products
120 or greater
between 80–120
80 or less
13
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
IS LOWER ATTRACTION AMONG LOW INCOME AN
ISSUE WITH AWARENESS, AVAILABILITY OR PRICE?
SALES PER 1,000 HOUSEHOLDS INDEX BY HOUSEHOLD INCOME
< $20k
Label claim:
$20k –
29.9k
$30k –
39.9
$40k –
49.9l
$50k –
69.9
$70k –
99.9
100k+
Low Glycemic
GMO Free
Gluten Free
Hormone Antibiotic Free
CONSUMERS ARE
APPROACHING PREVENTION
DIFFERENTLY
Organic
High Fructose Corn Syrup Free
Lactose Free
Protein Presence
Preservative Free
Index is:
Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products
120 or greater
between 80–120
80 or less
14
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
ARE HIGHER SALES AMONG ASIANS DRIVEN BY
ETHNICITY, EDUCATION OR INCOME?
SALES PER 1,000 HOUSEHOLDS INDEX BY RACE/ETHNICITY
Label claim:
Caucasian
African American
Asian
Hispanic (any race)
Low Glycemic
GMO Free
Gluten Free
Hormone Antibiotic Free
CONSUMERS ARE
APPROACHING PREVENTION
DIFFERENTLY
Organic
High Fructose Corn Syrup Free
Lactose Free
Protein Presence
Preservative Free
Index is:
Source: Nielsen Homescan with Nielsen LabelTrends, 52-week ending 12/28/2013, UPC-coded products
120 or greater
between 80–120
80 or less
15
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
MULTICULTURAL CONSUMERS ENGAGED WITH
MOBILE DEVICES
28%
33%
37%
Total
African
American
White
63%
67%
72%
22%
24%
Hispanic
76%
Source: Nielsen Cross Platform Report, March 2014
Asian
American
78%
Smartphone
Feature Phone
16
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
A FOCUS ON FRESH REVEALS THE VARIATION
Fresh Produce Sales Index
MULTI
CULTURAL
GENERATION
INCOME
164
136
103
86
90
105
104
95
64
Black
Asian
Hispanic
(any race)
Source: Nielsen Homescan, 52 Weeks Ending 12/28/2013, UPC-coded
Millennials Gen X
Boomers Greatest
Generation
Under
$25k
Income
$200k
17
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HEALTH-FOCUSED SHOPPERS ARE THE ONES YOU WANT
Fresh Produce $ Buying Rate Index
41% higher than expected
Higher spending
Expected produce
buying rate
Lower spending
20% lower than expected
Least engaged
Source: NMI, Nielsen Homescan, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded
Most engaged
18
RETAILER
HEALTH & WELLNESS
ENGAGEMENTS
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
CVS OFFERING HEALTHIER SNACK OPTIONS
Source: CVS
20
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
GETTING ASSOCIATES & SHOPPERS MOVING
Source: Walgreens, Hy-Vee, H-E-B, The Mexia (TX) News Online
21
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
GIVING CUSTOMERS WHAT THEY WANT
You’ve asked and
we’ve delivered:
Introducing our
LiveGFree line of
gluten-free foods,
exclusively at ALDI!
AldiUSA
Source: Aldi USA
22
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
KROGER SIMPLE TRUTH EXPECTED TO HIT $1 BILLION;
H-E-B INTRODUCES AFFORDABLE ORGANIC OPTIONS
Kroger’s eye catching
in-store merchandising; its own
website & array of social media
•
•
•
•
•
•
Beef
Teas
Salads
Carrots
Café Ole
Oatmeal & Cereals
H-E-B- shelf tag
Source: Todd Hale (in-store photo); Kroger, http://www.simpletruth.com/; H-E-B
23
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
WALMART & WILD OATS TO DRIVE
DOWN ORGANIC FOOD PRICES
Nearly 100 organic products – no price premium
Source: Walmart
24
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
“TARGET BRINGS TOGETHER 17 LEADING
NATURAL, ORGANIC AND SUSTAINABLE BRANDS”
Making BETTER FOR YOU products more accessible
Source: Walmart
25
TRENDS, OPPORTUNITIES & CHALLENGES
IN HEALTH & WELLNESS
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HEALTH & WELLNESS THEMES RESONATING
KNOWLEDGE IS KING
HEALTHY ASPIRATIONS
FOOD AS MEDICINE
NOT ONE SIZE FITS ALL
Consumer's desire
to understand, learn
about, & take
ownership of health
& nutrition
Interaction between
consumer desire for
a healthy lifestyle &
whether behaviors
match attitudes
Usage of fortified
foods, functional
foods & beverages,
& understanding
benefits
Population diversity
& differences in
purchase behaviors
across defined
consumer segments
Source: Nielsen, NMI
27
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
CONSUMERS WANT TO KNOW
WHAT’S IN THEIR FOOD
KNOWLEDGE IS KING
Source: NMI
28
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
AND THE THINGS THEY WANT MORE OF INCLUDE...
58%
57%
57%
Fiber
Calcium
Vitamins/
Minerals
56%
54%
53%
Antioxidants
Protein
KNOWLEDGE IS KING
2009
2013
Source: NMI
Vitamin D
29
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HEALTHY ASPIRATIONS
An answer for the ages: “Challenges dominate…”
89%
Taking personal responsibility for one’s
health is the best way to stay healthy
75%
Feel that I can manage many health
issues through proper nutrition
HEALTHY ASPIRATIONS
64%
Source: NMI
Will take whatever means necessary to
control their own health
30
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HOWEVER, BARRIERS EXIST
An answer for the ages: “Challenges dominate…”
HEALTHY ASPIRATIONS
Source: NMI
It can be a
challenge to
eat healthy
I know what
to do, but I
just don’t do
it
I often
splurge at
restaurants
Denial,
invincibility,
perceived
medical
cures, etc.
31
A question for the ages: Does knowing convert to doing?
Concerned A Lot with Preventing
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
HEALTHY ASPIRATIONS OPPORTUNITIES
Source: NMI
Curative
Preventative
Axes cross at median values
Affected by
32
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CAN FOOD HAVE MEDICINAL SOLUTIONS?
FOOD AS MEDICINE
Source: NMI
33
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
TWO-THIRDS OF CONSUMERS USE FORTIFIED FOODS
% General Population indicating they have used fortified foods/beverages in the past year
FOOD AS MEDICINE
65%
63%
71%
69%
65%
62%
63%
59%
2005
Source: NMI
2006
2007
2008
2009
2010
2011
58%
2012
2013
34
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
CONSUMERS SEEK FORTIFIED FOODS –
BUT NOT AT ANY PRICE
FOOD AS MEDICINE
75%
state“ I can
manage many of
my health issues
through proper
nutrition”
Source: NMI
Consumers’ willingness to
pay a 20% premium for
fortified foods and
beverages has remained
relatively stable over the
past 6 years:
15% in 2008
16% in 2013
35
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
THE RESURGENCE OF AN ESSENTIAL
POWER NUTRIENT
% General population indicating… they seek out foods that are high in protein
52%
49%
46%
FOOD AS MEDICINE
43%
46%
45%
PROTEIN
45%
39%
2006 2007 2008 2009 2010 2011 2012 2013
Source: NMI
36
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
PROBIOTICS: A FUNCTIONAL FOOD SUCCESS
FOOD AS MEDICINE
Source: stickycomics.com
37
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
NMI’S HEALTH & WELLNESS CONSUMER
SEGMENTATION
WELL BEINGS®: 19%
FOOD ACTIVES®: 18%
MAGIC BULLETS®: 23%
FENCE SITTERS®: 20%
EAT, DRINK &
BE MERRYS®: 20%
NOT ONE SIZE FITS ALL
Source: NMI
38
THOSE MOST ENGAGED IN H&W SHOP AND SPEND
All Retail Outlets
Basket Ring $ per Trip
WELL BEINGS
FOOD ACTIVES
MAGIC BULLETS
FENCE SITTERS
EAT, DRINK & BE MERRYS
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
NOT ONE SIZE FITS ALL
Shopping Trips per Household
WELL BEINGS
FOOD ACTIVES
MAGIC BULLETS
FENCE SITTERS
EAT, DRINK & BE MERRYS
$49.40
$45.80
$46.72
$48.01
$45.38
Basket Ring $ Per Household
WELL BEINGS
FOOD ACTIVES
MAGIC BULLETS
FENCE SITTERS
EAT, DRINK & BE MERRYS
157
153
151
142
137
$7,754
$7,021
$7,047
$6,827
$6,210
WELL BEINGS are active shoppers & spend the most annually
Source: NMI Health & Wellness Segmentation, Nielsen Homescan, Total U.S. Retail Channels – 52 weeks ending 12/28/2013
39
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
DIVERSITY IN SHOPPING & HOW THEY BUY
All Retail Outlets
NOT ONE SIZE FITS ALL
Source: Nielsen, NMI
40
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
60% OF GP SHOP REGULARLY IN DRUG STORES
Slight skews for WELL BEINGS; Far less likely to be EAT, DRINK & BE MERRYS
GP
22%
19%
19%
20%
Drug Store Shoppers
23% 23%
21%
20%
20%
14%
NOT ONE SIZE FITS ALL
WELL BEINGS
FOOD ACTIVES MAGIC BULLETS FENCE SITTERS EAT, DRINK & BE
MERRYS
% of Households
Source: Nielsen, NMI
41
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
DRUG STORES APPEAL MOST TO
FOOD ACTIVES & MAGIC BULLETS
All category spend per year (not including Rx)
ALL DRUG STORES
Index
WELL BEINGS
97
MAGIC BULLETS
106
FOOD ACTIVES
116
FENCE SITTERS
94
EAT DRINK & BE MERRYS
84
NOT ONE SIZE FITS ALL
TOTAL POPULATION
$0
$50
Source: NMI Health & Wellness Segmentation, Nielsen Homescan, Total U.S. – 52 weeks ending 12/28/2013
$100 $150 $200 $250 $300 $350 $400 $450 $500
42
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
RETAILER PREFERENCES IN THE DRUG CHANNEL
ARE APPARENT AMONG THOSE ENGAGED IN H&W
WELL BEINGS & FOOD ACTIVES both shop Retailer C more than Retailer B across all aisles;
MAGIC BULLETS outspend all other segments in Retailer B
NOT ONE SIZE FITS ALL
Source: NMI Health & Wellness Segmentation, Nielsen Homescan, Total U.S. – 52 weeks ending 12/28/2013
43
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
DIVERSE CATEGORY DEMAND ACROSS SEGMENTS
$ Buying Rate Index
WELL BEINGS
FOOD
ACTIVES
MAGIC
BULLETS
FENCE
SITTERS
EAT, DRINK & BE
MERRYS
Fresh Produce
141
104
90
96
80
Skin Care
130
105
92
108
72
Vitamins
124
117
105
92
49
Bottled Water
118
92
99
107
88
Personal Soap & Bath Additives
114
101
94
110
90
Beer
86
90
104
100
116
Carbonated Beverages
76
96
104
101
115
Tobacco & Accessories
74
86
116
84
112
Where is your category or brand connecting?
Source: NMI Health & Wellness Segmentation, Nielsen Homescan, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded
44
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
CLOSING THOUGHTS
•
Health & wellness is growing up – both categories & consumers
•
Health & wellness can no longer be a ‘one-size-fits-all’ mentality
•
Consumers pushing the envelope - seeking better, healthier &
smarter solutions which best fit their lifestyle & specific needs
•
Motivation to foster strategies for a healthier America is powerful
•
Healthier Consumers = Healthier Bottom Line
KNOWLEDGE IS KING
Source: Nielsen, NMI
HEALTHY ASPIRATIONS
FOOD AS MEDICINE
NOT ONE SIZE FITS ALL
45
Copyright ©2014 The Nielsen Company. Confidential and proprietary.
STAY CONNECTED
[email protected]
[email protected]
Todd Hale:
www.linkedin.com/pub/toddhale/a/353/613
@ToddHaleNielsen
@NMItweets
Steve French:
www.linkedin.com/in/stevefrench
46

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