THE STATE OF THE SNACK INDUSTRY sally lyons wyatt 2013HEADLINES 1 COMPETITIVE “SHARK TANK” snacking universe evolving 2013HEADLINES rise of the 2 PRIVATE LABEL 2013HEADLINES have and have not nutrition 3 HEALTH CONTINUUM 2013HEADLINES 4 FRUIT & VEGETABLE ‚remodel‛ 2013HEADLINES 5 PATH TO PURCHASE complexities 2014+OPPORTUNITIES 1 BE INSPIRED to expand 2014+OPPORTUNITIES 2 three p’s PATH 2 PURCHASE PRECISION 2014+OPPORTUNITIES 3 price for VALUE 2014+OPPORTUNITIES 4 seize the DAY(PART)! 2014+OPPORTUNITIES 5 INGREDIENTS & FLAVOR matter 2014+OPPORTUNITIES enhance your 6 BRAND EXPERIENCE AGENDA 1 2 3 GLOBAL TRENDS US ECONOMY 2013 TREND REVIEW 4 5 2014 OPPORTUNITIES SUMMARY GLOBALTRENDS OPPORTUNITESABOUND with the right execution SNACKING CONSIDERATIONS HAVE A VARIETY OF PERCEPTIONS ACROSS THE WORLD China India Thailand Brazil HEALTHY NOT HEALTHY FAVORITE SNACKS vary worldwide RUSSIA CHINA BRAZIL AUSTRALI A Source: Europanel FY 2013 / Aus = IRI-Aztec FY 2013 One thing in common: SNACKINGISGROWING RUSSIA 7.3% CHINA 14.8% BRAZIL 13.0% AUSTRALI A 1.4% Source: Europanel FY 2013 / Aus = IRI-Aztec FY 2013 SNACKING FAVORITES impact worldwide trends THEUSCONSUMERJOURNEY continues SEVERAL YEARS OF CHALLENGES OBAMACARE SNAP WEATHER REVISITING ASPIRATIONS MANAGING DEBTS REDUCING SPENDING METHODOLOGY SALES PERFORMANCE • IRI Market Advantage™ • MULO+C = Food, Drug, MassX, Club, Dollar, Walmart, Military, and Convenience • Europanel • Aztec • SPINS • Freshlook SHOPPING BEHAVIOR IRI Consumer Network™ CONSUMER ATTITUDES • IRI 2014 Consumer Snacking Study • IRI, Consumer Eating Behavior survey, May 2013 • NutriLink Segmentations • Technomic Survey • MarketPulse Survey CONSUMERS SPENDING OVER 1 TRILLION in an eating landscape with many options CONSUMERS SPENDING OVER 1 TRILLION in an eating landscape with many options Source: Technomic U.S. Foodservice Industry Forecast - Jan 2014 & IRI Total Store Advantage through 12-29-14 43% EDIBLE LIMITED SERVICE 21% RESTAURANTS FULL SERVICE 17% RESTAURANTS TRAVEL & 5% LEISURE RETAIL 4% HOSTS BUSINESS & 1% INDUSTRY ALL 9% OTHER MULO + C over 86% OF THE US EATS SNACKS ‚I eat on the run and grab food when I have a chance.‛‛ ‚I eat 4 – 5 mini meals‛ 28% ‚I eat 3 square meals and no snacks‛ 14% 21% ‚I eat 3 square meals and several snacks‛ 38% SNACKING FREQUENCY HAS INCREASED over the past 5 years SNACKING FREQUENCY HAS INCREASED over the past 5 years Consumption Repertoire Consumption Frequency Number of Snacks Consumed Daily Avg Number of Snacks Consumed Daily 2.8 100% 90% 21% 80% 51% 70% 1.9 60% 50% 40% 73% 30% 49% 20% 10% 0% 6% 0 2014 2010 Do not Snack 1-2 3+ 2010 2012 2014 Number of Snacks Consumed (Weighted Avg) SNACKING “SHARK TANK” snacking options ACROSS THE STORE in the U.S. CORE SNACK VOLUME SLID Core Snacks Category Performance Volume Sales Change 2013 vs. 2012 - MULO+C Yogurt Salty Snacks Natural Cheese Snack Bars/Granola Bars Snack Nuts/Seeds/Corn Nuts Cookies Crackers Ice Cream/Sherbet (0.1%) Non-Chocolate Candy (0.1%) Chocolate Candy (0.8%) Industry Average (Core Snacks) (0.8%) 3.5% 2.3% 2.2% 1.7% 1.5% 1.1% 1.0% in the U.S. CORE SNACK DOLLARS SALES CLIMBED Core Snacks Category Performance Dollar Sales Change 2013 vs. 2012 - MULO+C Yogurt Salty Snacks Chocolate Candy Snack Bars/Granola Bars Crackers Snack Nuts/Seeds/Corn Nuts Natural Cheese Cookies Industry Average (Core Snacks) Non-Chocolate Candy Ice Cream/Sherbet 7.6% 4.2% 4.1% 3.8% 3.6% 3.2% 3.1% 3.0% 2.8% 2.4% 1.2% INFLATIONARY PRICING TRENDS CONTRIBUTED TO DOLLAR SALES INCREASES Core Snacks Category Performance Yogurt Salty Snacks Chocolate Candy Snack Bars/Granola Bars Crackers Snack Nuts/Seeds/Corn Nuts Natural Cheese Cookies Industry Average (Core Snacks) Non-Chocolate Candy Ice Cream/Sherbet $ Sales % Change YA 7.6% 4.2% 4.1% 3.8% 3.6% 3.2% 3.1% 3.0% 2.8% 2.4% 1.2% PPV % Change YA +4.0% +1.9% +4.9% +2.1% +2.6% +1.7% +0.9% +1.8% +3.6% +2.6% +1.4% DIFFERENT STORY WHEN LOOKING AT EXTENDED MACRO SNACKS AVG PRICE DOLLARS INCREASE VOL + 2.2 + 1.3% + 0.9% PRODUCE SNACK SIZES GROWING 14% 120% 13% 11% 12% 10% 100% 9% 80% 8% 7% 60% 6% 6% 6% 4% 40% 4% 20% 2% 0% 0% APPLES CARROTS PEPPERS Growth - Total Category CELERY BERRIES CUCUMBER Growth - Snack Size Packs (less than 4 oz) TOMATOES quest for hunger satisfaction driving SAVORY SNACK GROWTH SAVORY SNACKS +1.1% OTHER SNACKS +0.8% TOTAL SNACKS (0.8%) SWEET SNACKS (2.1%) quick FACT PRIVATE LABEL CAPTURED VOLUME SHARE ACROSS SEVERAL SNACK CATEGORIES but lost others Private Label Volume Share Point Change vs. YAGO Snack Nuts/Seeds/ Corn Nuts 1.7% Frozen Novelties 0.3% Non-Chocolate Candy 0.2% Chocolate Candy 0.2% Industry Average 0.0% Salty Snacks (0.2%) Crackers (0.2%) Snack/ Granola Bars Yogurt (0.3%) (0.9%) Ice Cream/Sherbet (1.1%) Cookies (1.2%) yet, at the industry level PRIVATE LABEL SHARE WAS FLAT Private Label Share of Snack Sales VOLUME VOLUME 2012 2013 29.2% 29.3% DOLLARS 15.1% 2012 & 2013 however private label GREW SEVERAL CATEGORIES WITH PRICE ADVANTAGE Private Label – Dollar Share of Segment- 2013 vs. 2012 – MULO+C Share of PL to Segment Share Change of PL VYA Nutritional Snacks/Trail Mixes 0.8 11.7 Rfg Handheld Non-Breakfast Entrees 9.6 Kernel Popcorn -0.4 8.2 Snack Nuts/Seeds/Corn Nuts 0.1 7.9 0.3 Natural Cheese-String/Stick 5.8 Pastry/Doughnuts 5.6 Carob/Yogurt Coated Snacks 5.3 Dips - Rfg FZ Yogurt/Tofu -0.2 2.8 Bakery Snacks 1.5 SS Microwave Popcorn 1.2 1.0 -0.1 0.3 0.3 0.2 quick FACT including NATURAL & ORGANIC OPTIONS RETAILERS SHOWCASING IN MANY VARIETIES SPROUTS FRY’S FOOD STORES TARGET TRADER JOE’S giving the HEALTHIER SEGMENT A BOOST WITHIN MICROSNACKS HEALTHIER CATEGORIES ENJOYED EXCEPTIONAL GROWTH during 2013 Yogurt Carob / Yogurt Coated Snacks +3.5% Fz. Yogurt/ Tofu +9.9% +26% Breath Fresheners +8.4% Nutritional Snacks & Trail Mixes +9.9% O f he althie r c ate g o r i e s i n C o r e Sn ac k s, 62% GREW VOLUME SALES HEALTHIER INNOVATION IS THRIVING INNOVATION SUCCESSES CROSSED… CONVENIENCE FUN NUTRITION PROTEIN BREAKFAST quick FACT INDULGENT CATEGORIES GETTING A BOOST during 2013 Chocolate Covered Salted Snacks Dried Meat Snacks +4.6% +15.2% Fz. Handheld Entrees (Non Breakfast) Other Snacks - Fz +3.4% +11.5% Rfg Handheld Non Breakfast Entrees +3.2% O f in du lg e n t c ate g o r i e s i n C o r e Sn ac k s, 52% GREW VOLUME SALES INDULGENT INNOVATION… SOME CLAIMS ARE EXPERIENCING SIGNIFICANT GROWTH CAGR % (2010 – 2013) Natural Whole Grain Gluten Free Protein Energy Hormone Claims Other Omega Claims Oil Type Antioxidant Vegan/Veg Organic Omega ALA Soy Dollar Sales % Chg Declining claims examples claim declines result from CLAIM CHANGES CLAIM Diabetes Digestion Immune Defense No/ Low Trans Fat High/ Source/ More Calcium High/ Source/ More/ Functional Fiber No/ Low/ Less/ Functional Calorie Grain Blend No/ Reduced/ Functional Lactose Whole/ Multigrain Grain No/ Low/ Less Sugar Artificial Sweetener Grain OP5ION ON PACKAGING &/OR PRODUCT DECLINES SHOWCASING IN AND OUT OF STORES FRUIT & VEGETABLE REMODEL snack consumers’ PATH TO PURCHASE INFLUENCES SNACK DECISIONS 2014+ OPPORTUNITIES 2014+OPPORTUNITIES 1 2 3 4 5 6 BE INSPIRED to expand three p’s PAT H 2 P U R C H A S E P R E C I S I O N price for VA L U E seize the D AY ( PA R T ) I N G R E D I E N T S & F L AV O R matter enhance your BRAND EXPERIENCE CONSUMER DEMAND MOMENTS will drive the snacking evolution quick FACT supporting growth of snacks that are CONVENIENT, FILLING & TASTE GREAT Nutritional Snacks & Trail Mixes +9.9% Chocolate Covered Salted Snacks +15.2% Ready to Eat Popcorn/Caramel Corn Fz. Yogurt/ Tofu Health Value Bars +12.6% +9.9% Jerky Specialty Nut Butter +8.4% +15.8% Carob / Yogurt Coated Snacks +16.6% +26% Rfg Juice and Drink Smoothies +29% supporting growth of snacks that are CONVENIENT, FILLING & TASTE GREAT RFG Yogurt Drinks RFG Smoothies Sensible SuperMom Healthy Chic Average 20% to 24% 12% to 20% 12% to 20% 4% to 6% 2% to 4% 0% to 2% find inspiration FROM QSR, LSR AND… AIRLINES? PATH TO PURCHASE PRECISION IS REQUIRED TO CAPTURE NEW & CURRENT CONSUMERS Purchase Out of Store Fragmentation In Store Availability: Outlets / QSR / LSR FRAGMENTATION OF MEDIA SNACKING LANDSCAPE options include: SNACKS DELIVERED TO YOUR DOOR CONVENIENCE RETAILERS, FRESH IDEAS at tr adi ti o n al r e tail SNACKING IS OUTPACING TOTAL CPG AT MAJORITY OF CHANNELS % Growth By Channel 2013 vs. 2012 Dollar Sales Change Core Snack Total CPG Unit Sales Change Core Snack Total CPG Multi-Outlet + Convenience +2.8% +1.6% +1.3% +0.3% Grocery +2.5% +1.1% +1.7% +0.2% Drug +2.3% +1.9% +0.3% +0.2% Convenience +2.1% +0.7% (0.5%) (0.5%) …WHAT THEY BUY… Healthy consumer segments index Rest of market index 94 106 92 108 111 89 119 81 $ Index vs. Total Population (Avg = 100) Copyright © 2014 Information Resources, Inc. (IRI). Confidential and Proprietary. 70 …AND WHERE THEY EAT healthy chic preferred ‘on the go‛ preferred Source: Technomic – IRI Nutrilink Surveys, November 2013 DRAW INSPIRATION FROM QSR / LSR TO INCREASE YOUR “SHARE OF STOMACH” Mc Donald’s Snack Wraps restaurant snacks Brio Tuscan Grille Light Menu Applebee’s Green Bean Crispers Sonic Ched ‘R’ Peppers Cheesecake Factory Skinnylicious Menu precision includes taking into consideration MEDIA & COUPON PREFERENCES AMONG KEY CONSUMER GROUPS precision includes taking into consideration MEDIA & COUPON PREFERENCES AMONG KEY CONSUMER GROUPS precision includes taking into consideration MEDIA & COUPON PREFERENCES AMONG KEY CONSUMER GROUPS HEAVY COUPON USERS: precision includes taking into consideration FINDING CO-MERCHANDISING OPPORTUNITIES MERCHANDISING CAN DELIVER BIG LIFT IN SALES % Inc in Vol, Any Merch/Point chg − 2013 vs. 2012 − MULO+C 119.9% (9) 116.8% (2) 103.9% (9) 96.4% (8) 93.3% (6) COMMUNICATION IN STORE IS IMPORTANT MESSAGING BEYOND THE BASICS OPPORTUNITY TO UNDERSTAND & INFLUENCE AT KEY DECISION POINTS Deal-Seeking Tracking Online Behavior Usage and Information-Sharing Final Product and Store Decisions Problem to Solve Market Structure, Attitudinal Segmentations, Individual User Needs Awareness Born Media Planning and ROI Store/Outlet Selection Build List Mobile Platforms Opens App While Shopping Mobile Platforms Purchase Made quick FACT quick FACT on average CONSUMERS ARE PAYING HIGHER PRICES FOR HEALTHIER SNACKS Avg Price Per Volume % Price Gap* $3.79 Crackers $4.66 $3.41 Cookies $2.54 $2.48 Jellies/Jams/Honey 23.2% -25.5% 26.6% $3.14 $2.28 Fz Novelties $2.67 16.7% $1.79 Yogurt $3.00 Regular 67.7% Healthier % Price Gap* = (Price of Healthier – Price of Regular)/Price of Regular quick FACT seize the DAY (PART)! FREQUENCY CONTINUES TO INCREASE across all dayparts EARLY MORNING MORNING AFTERNOON EVENING LATE EVENING 7% 22% 51% 44% 24% 2010 2010 2010 2010 2010 18% 37% 68% 62% 46% 2014 2014 2014 2014 2014 Source: IRI / SNAXPO Consumer Surveys, 2014-2010 DISCOVER OPPORTUNITIES TO WIN ADDITIONAL SNACKING CONSUMERS % of consumers not eating snacks EARLY MORNING 2010 2014 86% 69% MORNING 55% 2010 2014 Source: IRI / SNAXPO Consumer Surveys, 2014-2010 45% AFTERNOON 2010 2014 17% 10% EVENING 2010 2014 21% 17% LATE EVENING 2010 2014 52% 31% understand needs across LIFESTYLE AND LIFESTAGE % of consumers not eating snacks (2014) EARLY MORNING 69% 66% 79% MORNING 88% 45% 43% Total 1834 3554 5564 65+ Source: IRI / SNAXPO Consumer Surveys, 2014-2010 Total 36% 41% 1834 3554 AFTERNOON 52% 52% 10% 5564 65+ Total 7% 8% 1834 3554 14% 12% 5564 65+ Total EVENING LATE EVENING 21% 23% 17% 10% 31% 15% Total 18- 3554 18- 34 3554 34 40% 44% 27% 12% 55- 65+ 645565+ 64 Total Total 1818- 34 34 3554 3554 55- 65+ 64 5564 65+ FIERCE BATTLE TO DRIVE BREAKFAST SALES in 2013 unlock additional opportunities by BY DISCOVERING WHO FREQUENTS RESTAURANTS MORE FOR EACH MEAL and how it DIFFERS FOR SNACKS OP5ION understand consumer preferences can fuel INNOVATION AND COMMUNICATION ACROSS THE PATH TO PURCHASE TOP 5 MORNING SNACKS Yogurt Bakery Snacks Snack Bars Dairy/Yogurt-based Bevs' Fruit-based Smoothies 32% 28% 21% 18% 17% TOP 5 AFTERNOON Salty Snacks 49% Snack Nuts 46% Chocolate Candy 44% Crackers 42% Cookies 39% TOP 5 LUNCH TIME Crackers 24% Yogurt 23% Salty Snacks 21% Snack Bars 18% Cookies 18% TOP 5 EVENING Salty Snacks Ice Cream Chocolate Candy Cookies Snack Nuts 56% 49% 48% 46% 41% TOP 5 ENTERTAINMENT Chocolate Candy Ice Cream Frozen Novelties Cookies Bakery Snacks 26% 26% 23% 21% 20% TOP 5 AFTER MEALS Ice Cream Chocolate Candy Frozen Novelties Cookies Bakery Snacks 31% 23% 22% 21% 16% INGREDIENTS & FLAVORS MATTER clear. simple. heath focused. TREND OP5ION FAD embrace these FASTEST Macro Snacks – Fastest-Growing Claims/ Categories Driving Growth 2013 MULOC CLAIM Gluten Free Hormone Claims Oil Type Other Omega Claims Natural Protein Soy Omega ALA Vegan / Vegetarian Whole Grain Organic OP5ION GROWING CLAIMS potentially change PACKAGE Declining claims examples COMMUNICATION TO GROWTH OPTIONS CLAIM OP5ION Diabetes Digestion Immune Defense No/ Low Trans Fat High/ Source/ More Calcium High/ Source/ More/ Functional Fiber No/ Low/ Less/ Functional Calorie Grain Blend No/ Reduced/ Functional Lactose Whole/ Multigrain Grain No/ Low/ Less Sugar Artificial Sweetener Grain BEST-IN-CLASS RETAILERS HAVE HEALTHY LIVING PROGRAMS Car TOUT IN STORE ENHANCE YOUR BRAND EXPERIENCE Source: Blippar.com (UK) it will get your consumers ENGAGED & INCREASE PURCHASE FREQUENCY SUMMARY BE INSPIRED TO EXPAND • Occasion, demand moment • Fresh, sustenance, portability and taste • Follow online, restaurants and airlines SEIZE THE DAY(PART)! • Know your target consumer choices • Attitudes and motivations • Influence to win PATH TO PURCHASE PRECISION • Channel strategy based on shared shoppers • Overlay health attitudes to consumer targets • Shopper-centric activation INGREDIENTS & FLAVORS MATTER • Embrace fastest growing health claims • Simple – ingredients & package communication • Be bold in-store PRICE FOR VALUE • Versus Private Label • Reasonable everyday • Health & Gourmet ENHANCE YOUR BRAND EXPERIENCE • Consumer engagement • Technology and apps • Beyond store THANK YOU sally lyons wyatt [email protected] APPENDIX HEALTHIER MACRO SNACK CORE SNACKS CATEGORIES EXTENDED SNACKS INDULGENT • • • • • • • • • • • • • • • • • • Carob/Yogurt Covered Snacks Cheese (String & Cubes) Dried Fruit Dry Fruit Snacks Light Ice Cream/Sherbet/ Fz Novelties Sensible Salty Snacks Popcorn (Non-Sweet) Pretzels Reduced Fat Cookies Reduced Fat Crackers Rice/Popcorn Snacks Salsa & Picante Snack/Granola Bars Snack Nuts/Seeds Sugarless Gum Trail Mixes Yogurt/ Frozen Yogurt Breath Fresheners • • • • • • • • • • • • • • • • • • Aerosol Cheese Bakery Snacks & Desserts Chocolate Candy Chocolate Covered Salty Snacks Dips Fz & Rfg Appetizers/Handheld Entrees Meat Snacks Non-Chocolate Candy Pastry/Doughnuts Popcorn (Sweet) Regular Fat Cookies Regular Fat Crackers Regular Fat Salty Snacks Toaster Pastries Regular Gum Regular Ice Cream/FZ Novelties Toaster Pastries Other Snacks – Fz • • • • • • • • • Rfg Juice And Drink Smoothies Specialty Nut Butter Peanut Butter Rfg Baked Goods FZ Soups/Sides/Other Fresh Eggs Jellies/Jams/Honey Cream Cheese/Cr Chs Spread Fz and Rfg Pizza - Fz • • • • • • • • Soup Canned/Bottled Fruit Luncheon Meats Cold Cereal Cottage Cheese Rfg Tortlla/Eggrll/Wontn Wrap SS Bottled Juice And Drink Smoothies Breakfast Drink Mixes
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