EUROPEAN DAIRY CONSUMERS FUTURE TREND EUROPEAN DAIY ASSOCIATION WORLD FORUM Enrico Krien Senior Business Consultant Stresa / Italy, 10th of October 2014 Agenda Consumer Confidence Index - worldwide and focus on Europe Development of value / volume sales in fast moving consumer goods in European countries, esp. Italy Overview about dairy / cheese categories in European focus countries, esp. cheese in Italy Copyright ©2013 The Nielsen Company. Confidential and proprietary. Outlook 2 Consumer confidence grows slightly in 2nd quarter 2014 (Index 97) and there are some positive exceptions… Copyright ©2013 The Nielsen Company. Confidential and proprietary. European countries with more pessimistic confidence but partly strongly increasing, e.g. Italy (Index 51 > +6 ) • latest confidence boost due to new government (Feb) and its instituted policies to face the crisis • Retail sales data in the first half of the year in some categories with signs of endurance #1 India (top cc score ranking of 60 countries) 3 Copyright ©2013 The Nielsen Company. Confidential and proprietary. GLOBAL JOB PROSPECTS REACH 50% FOR THE FIRST TIME IN SEVEN YEARS Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q2-2014 6 THE WEST EUROPEAN CONSUMER WHO IS IT? Copyright ©2012 The Nielsen Company. Confidential and proprietary. The WE Consumer - Concerns WE Job security (1st France/Spain/Italy) Increasing Utility bills (1st Germany/UK) Economy CONCERNS (TOP 3) Source: Nielsen Global Consumer Confidence Survey Q4-2013 8 Utilization of Spare Cash in WE Once you have covered your essential living expenses, which of the following statements best describes what you do with your spare cash? Putting into savings 35% New clothes 30% Holidays / vacations 28% Out-of-home entertainment 23% Paying off debts/credit cards/loans 21% Home improvements/decorating 19% Copyright ©2013 The Nielsen Company. Confidential and proprietary. WE New technology products Retirement fund Investing in shares of stock/mutual funds 14% 6% 5% I have no spare cash Source: Nielsen Global Consumer Confidence Survey Q4-2013 23% % 9 Copyright ©2012 The Nielsen Company. Confidential and proprietary. The WE Consumer - Spendings WE Savings (IT, UK, FR, ES) New clothes (Germany) Holidays SPENDING (TOP 3) Source: Nielsen Global Consumer Confidence Survey Q4-2013 10 Copyright ©2012 The Nielsen Company. Confidential and proprietary. The WE Consumer – BEL TIGHTENING WE Spend less on new clothes (Italy) Switch to cheaper brands (Germany) Cut down on OOH entertainment (France/Spain) BELT TIGHTENING ACTIVITIES (TOP 3) Source: Nielsen Global Consumer Confidence Survey Q4-2013 11 EUROPE OVERVIEW FMCG WITH STABLE INCREASING VALUE AND STAGNATING VOLUME SALES Fast Moving Consumer Goods market dynamics (Weighted average) 2011 2012 2013 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 4,7% 0,2% 4,3% 0,9% 3,8% 0,0% 3,6% 3,4% 3,3% 0,2% 3,1% 3,0% 0,2% 2,8% 2,5% 3,4% 4,5% 4,2% 3,6% 3,5% 3,0% 2,6% Copyright ©2012 The Nielsen Company. Confidential and proprietary. 1,6% -0,1% -0,8% -0,4% 3,1% 2,7% 1,2% -0,2% 1,7% 1,7% 2,3% 2,3% -0,6% -0,6% 2,8% 2,2% -1,5% Unit value change Volume change Nominal Value Growth • positive calendar effect: Q2 2014 includes Easter while last year Easter was in Q1 2013 most visible in Italy, Belgium, Germany, Hungary, Norway, Poland, Slovakia and Sweden 13 PICTURE OF EUROPE IS SPLITTET – SOUTH EUROPE WITH DIFFICULTIES > EAST EUROPEAN & SMALLER COUNTRIES WITH GROWTH RATES Fast Moving Consumer Goods market dynamics Q2 2014 growth rates per country (versus Q2 2013) 12,7% 4% 4,5% Copyright ©2012 The Nielsen Company. Confidential and proprietary. 2% 0% -1% -1,1% 0% -1% -1,1% 1% 0,3% -1% 0,4% 1% 0% 2% 0,6% -1% 1,2% 2% -1% 2,2% 1,8% 1,8% 2% 2% 2% 0% 0% 0% 2,5% 2,8% 1% 2,9% 1% 1% 2% 3% 0% 3,3% 3,5% 2% 5,7% 6,0% 4% 4% 2% 2% 4,5% 1% 6,4% 4% 9% 2% 3% 2% 2% 3% 2% 0% -1,7% -4% Unit value Volume growth Nominal Value Growth 14 ITALY Fast Moving Consumer Goods market dynamics 2011 2012 2013 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 2,4% 0,2% 1,8% 2,2% 1,9% 1,4% 0,1% 1,8% 1,2% 0,3% -1,1% -0,8% -0,6% 0,2% -0,5% -0,3% -1,3% 0,7% 0,2% 0,2% 0,1% -0,4% -0,3% 0,1% -0,4% -0,3% 0,2% -0,1% -1,1% -1,5% -0,9% -2,5% -2,5% Copyright ©2012 The Nielsen Company. Confidential and proprietary. -2,9% -2,3% -2,7% Unit value change Volume change Nominal growth 15 FOCUS ITALY *milk & yoghurt Dairy total* – Key Facts 2014 (MAT CW 32) val sales 5.525 Mio€ (-0.7%) vol sales: 4,794 k Tonnen (+1,3%) val sales: 5,451 Mio. € (+9,2%) vol sales: 2,304 k tons (+1,2%) val sales: 4,300 Mio € (-0,6%) vol sales: 985 k tons (+0,5%) val sales: 4.132 Mio € (+0,2%) vol sales: 629 k tons (-3,3%) val sales: 3.843 Mio€ (-0,6%) vol sales: 1.013 k tons (-3,9%) 17 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mopro in Europa und USA *fresh & processed cheese Self service* cheese – Key Facts 2014 (MAT CW 32) value sales 2,8 Mrd. € (+1,3%) volume sales 331 k tons (-0,5%) value sales 7,5 Mrd. € (+9,9%) volume sales 1,236 k tons (+2,5%) value sales 5,8 Mrd. € (+4,0%) volume sales 675 k tons (+3,4%) value sales 1,4 Mrd. € (+2,7%) volume sales 191 k tons (+3,2%) value sales 3,3 Mrd. € (+0,8%) volume sales 394 k tons (+0,6%) 18 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mopro in Europa und USA FOCUS ITALIAN CHEESE DIFFICULT YEAR FOR THE CHEESE INDUSTRY IN ITALY – VOL/VAL DECLINES Total Italy – MAT August 2014 Total Italy Copyright ©2013 The Nielsen Company. Confidential and proprietary. Normal Trade Modern Trade Source: Nielsen MarketTrack – MAT August 2014 Hyper Big Super Small Super + Lis 24,5% *GDA 674 Mio kg - 5,2% 6,9 Bil € - 4,6% 144 Mio kg -7,6% 1,7 Bil -6,8% 5,2 Bil - 3,8% 75,5% *GDA 530 Mio KG -4,5% 22% -3,6% -2,2% 20% -1,1% -1,8% 34% -7,1% -6% 20 ESPECIALLY THE SMALL SUPERMARKETS WITH BIG LOSSES. TRAD. STORES WITH SIMILAR DEVELOPMENT (SAME PICTURE AT VAL SALS) Total Italy – MAT August 2014 Sales Location Volume MAT AUG 14 Total Italy 23,1 Big Super 21,4 Small Super + LIS Copyright ©2013 The Nielsen Company. Confidential and proprietary. -3,6 -7,1 21,4 16,6 DM Area 3 18,3 DM Area 4 18,2 Source: Nielsen MarketTrack – MAT August 2014 -1,7 -4,5 25,5 -0,2 -2,5 -7,6 78,6 DM Area 2 -0,8 -1,1 34,1 Modern Trade DM Area 1 Contribution volume -5,2 Hyper Normal Trade % Change vs. YA -3,5 -3,1 -0,8 -3,3 -0,5 -7,2 -1,3 -4,6 -0,8 21 Trends 22 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Copyright ©2014 The Nielsen Company. Confidential and proprietary. SNACKING PRODUCTS – TO GO? 23 Fresh Fruit Chocolate Cheese Yogurt Vegetables Cookies/ Biscuits Bread/ Sandwich (outside a meal) Potato Chips/ Tortilla Chips/ Crisps Nuts/ Seeds Gum Pie Snack Cakes/ Cup Cakes Crackers/ Crispbreads Cereal (outside a meal) Ice Cream/ Gelato in a tub Non-Chocolate Candy Flapjacks Popcorn Dried Fruit/ Fruit Snacks Granola Bars/ Cereal Bars Dumplings Mints Trail Mix Frozen appetizers/ snacks Instant Noodles for snacking Jelly Pretzels Dips (other than salsa or hummus) Marshmallows Wasabi green pea/ Green pea Nutrition/ Energy Bars Popsicles/ Frozen Novelties Snack Mix Rice Cakes Peanut Butter Smoothies Jerky/ Dried Meat Snacks Prawn/ Fish Crackers Egg Roll Salsa Frozen Yogurt Hummus Rice Crackers Fish Sausage Fried Bananas Seaweed snack Fried Tofu Other No Snacks Copyright ©2014 The Nielsen Company. Confidential and proprietary. THINKING ABOUT THE SNACKS YOU EAT, WHICH ONES DID YOU CONSUME IN THE LAST 30 DAYS? EU 62 61 58 54 49 45 42 38 Top snacking categories (> 50% chosen by the consumers) in the European Union are > fresh fruit, > chocolate as well as HEALTH > cheese and genetically modified > yoghurt organism free / natural 34 31 26 Where Consumer Confidence Survey – Q1 – 2014 REASON For enjoyment / to provide nutrition *Top 2 Answers TASTE / TEXTURES Super / Mass 23 22 fresh/flavourful 20 20 19 18 17 15 15 15 14 14 14 13 13 12 Merchandiser/ 11 10 10 Hypermarkets 8 8 8 8 7 7 6 5 5 5 5 4 4 4 4 3 3 2 4 Base : All respondents n=16149 Nielsen Global Survey SNACK OCCASIONS AND TREND SPOTTING Field Dates: Feb 17 to Mar 7, 2014 24 Copyright ©2012 The Nielsen Company. Confidential and proprietary. Outlook Consumer will get more demanding > expectations will rise => Transparency rises in terms of trust & good value for money Don’t ask what the category can do for you – ask what you can do for the category! => e.g. new brand building, innovations, etc. 25 26
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