U.S. Consumer Trends
APA
2011 ANNUAL MEETING
Version 19
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Copyright © 2011 The Nielsen Company. Confidential and proprietary.
U.S. Consumer Trends U.S. Consumer Trends
• Consumer trends
• Health & Wellness
• Sustainability
• Summary & closing thoughts
Today’s agenda
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Declining
% of HHs with
Children
Immigration
& Growth in
Ethnic Families
Older
Consumers with
New Needs
Key 21st Century Macro Trends
Income Declines
& Concentration
Slowing
Population
Growth
Rising Rate of
Obesity & Cost of
Healthcare
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Very diverse consumer segments… - Multicultural
- Aging
- Economically distressed
…and a shrinking pie
A challenging future between…
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U.S. Consumer Trends
$30
$35
$40
$45
$50
$55
Greatest Gen Boomers Gen X Millennials
100
125
150
175
Greatest Gen Boomers Gen X Millennials
$5,500
$6,000
$6,500
$7,000
$7,500
Greatest Gen Boomers Gen X Millennials20%
22%
24%
26%
28%
Greatest Gen Boomers Gen X Millennials
Shopping Trips Per Household Basket Ring Dollars Per Trip
Basket Ring Dollars Per Household % Dollars on Deal
Total Retail Channels
Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994
Older segments are more frequent shoppers & more deal prone
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 12/25/2010;
excludes gas on or Rx only trips
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Big differences in category spend – some driven by diverse households, other by diverse preferences
Annual $ Per Hhld* Greatest Gen Boomers Gen X Millennials
Baby Food 44 48 124 168
Carbonated Beverages 90 133 131 111
Cereal 62 69 89 82
Detergents 44 53 57 46
Hair Care 28 40 46 36
Ice Cream 37 37 33 28
Pet Food 203 216 157 119
Vitamins 111 90 66 57
Wine 121 124 81 62
Where is your category or brand driving sales?
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 12/25/2010;
UPC-coded items only
Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994
*Among category buyers
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Retailers are focused on Seniors
Kroger: Seniors receive a 10%
discount OFF of your total purchases
on the first Wednesday of every month.
All Seniors, 60 years and older are
eligible! (southern Illinois, southern
Indiana, select KY & Nashville, TN
area stores Only!)
If you're 55+, you can save an additional 10% on your food bill (less V.I.P savings, taxes, and coupons) the first Wednesday of every month.
Rite-Aid offers 20% off your purchases the first Tuesday of the month, plus all your favorite benefits, including:
10% off your purchase all other Tuesdays 10% off Rite Aid Brand products every day 10% off cash prescriptions every day
Enrollment in Living More is free and easy
Source: Company websites
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AARP redefining its audience
• “Today AARP sends AARP The
Magazine to all members, but
sends slightly different versions to
those 50 to 59, 60 to 69, and over
70.”
• The covers are the same, but…
“The illustration for older readers
features a man who is bald rather
than graying, a woman wearing a
long skirt rather than jeans and,
resting between them, a cane.”
Source: The New York Times & AARP
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Portion sizes for one or two, but what else?
Source: MultiAd Kwikee
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How is your organization preparing for change?
Total White
Non-Hispanic Black Asian* Hispanic
+42% +1%
+56%
Projected Population Growth From 2010 to 2050
+142% +167%
*Excludes American Indian, Alaska Native, Hawaiian & Other Pacific Islander Source: U.S. Census Bureau Population Projections
Source: U.S. Census Bureau Population Projections
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Marketers must recognize diversity of ethnic communities
Puerto
Rican
9.0%
Cuban
3.4%
Dominican
2.8%
Central
American
8.3%
South
American
5.8%
Other
5.1%
Mexican
66%
Asian
Indian
18.6%
Filipino
18.1%
Vietnamese
10.7%
Korean
10.0%
Japanese
5.3%
Other
14.4% Chinese
23%
What Percent of Hispanic
Americans Have Mexican Ancestry? What Percent of Asian Americans
Have Chinese Ancestry?
Source: U.S. Census 2008 American Community Survey
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And local view essential to identify multicultural opportunities
Jackson, MS 48% Black
Laredo 94% Hispanic
San Francisco 22% Asian
Alpena, MI 97% White,
Non-Hispanic
Miami 46% Hispanic
Los Angeles 44% Hispanic
19% Black
12% Asian
El Paso 89% Hispanic
New York 21% Hispanic
Source: Nielsen Spectra & Nielsen Media
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U.S. Consumer Trends
Volumetric opportunities from ethnic; margin opportunities from white
66%56% 60% 60%
68%79%
15%22% 18% 19%
13%
7%13% 16% 17% 14% 12% 9%5% 5% 5% 6% 5% 4%
Total Under 12 12-17 18-34 35-54 55+
White Non-Hispanic Hispanic
Black/African American Asian
Population Age By Ethnicity
Younger/Future Consumers
Are More Diverse
Source: U.S. Census
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Universal appeal for Facebook, while other sites provide opportunities for targeting
Source: Nielsen NetView, February 2011
Hispanic 154 67 112 100 106
White 93 106 98 101 94
African American 116 69 104 96 130
Asian 83 147 118 99 126
Other 154 63 110 100 103Composition Index by Unique Audience Under-index
Standard
Over-index
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Big differences in edible category spend – driven by diverse households or by diverse preferences?
Annual $ Per Buying
Household
White Non-
Hispanic
Hispanic
(any race)
Asian African
American
Pet Food 199 154 144 104
Beer 136 129 74 138
Wine 117 79 71 58
Fresh Produce 101 98 124 69
Baby Food 91 131 140 132
Candy 84 62 65 57
Juices/Drinks – Shelf Stable 59 81 68 79
Yogurt 47 49 45 33
Where is your category or brand driving sales?
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 12/25/2010;
UPC-coded items only
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Hispanic households spend more on basic food ingredients Hispanic Nielsen Edible Category Dollar Index
Dried Vegetables & Grains 235
Baby Food 195
Shortening Oil 161
Eggs 139
Prepared Foods – Dry Mix 136
Canned Milk & Creamers 135
Shelf-Stable Juices & Drinks 134
Flour 133
Non-Carbonated Soft Drinks 129
Seasonings & Spices 127
Purchase index:
share of Hispanic $
sales divided by U.S.
household $ share
X 100
Source: Nielsen Homescan,
52 Weeks Ending 12/25/2010
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Ethnic diversity impacting general population
Source: MultiAd Kwikee
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•Convenient
consumer
solutions
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Winning & experimenting with technology
Source: Company websites; Progressive Grocer,
Pittsburgh Post-Gazette & CincySavers.com
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“The technology in the app puts you in control of the shopping experience"
Source: Stop & Shop; Brittany Sauser (in-store photo); Quote by John Caron, Modiv Media's senior vice president of marketing
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E-Commerce sales have been steadily gaining share for a decade
Source: U.S. Census Bureau
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Competition from companies who know how to sell online
Source: Company websites
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Grocery delivery services gaining momentum
Source: Company websites
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iPhone applications to simplify lives & make smarter shoppers
Source: Apple
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Peapod launches smartphone app
Source: PRNewsire & appstorehq.com
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Shoppers now can locate more than 100,000 items in Meijer Supercenters
Source: Meijer
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Convenient solutions for breakfast
Source: MultiAd Kwikee
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Lunchtime convenient solutions
Source: MultiAd Kwikee
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Convenient solutions for dinner
Source: MultiAd Kwikee
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Convenience foods steam up!
Source: MultiAd Kwikee
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Pre-measured
Source: MultiAd Kwikee
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More than one brand or product in a box
Source: MultiAd Kwikee
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“On-the-go” & “travel packs”
Source: MultiAd Kwikee
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•Health &
wellness
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Healthy label claims: Sales range from $50 million for
plant sterol claims to $47 billion for fat claims
Source: Nielsen Scantrack & Nielsen LabelTrends Total U.S - Food/Drug/Mass Stores (excl. Walmart)
Label Claims Dollar Sales
$0
$3
$6
$9
$12
$15
$18
$21
$24
$27
$30
$33
$36
$39
$42
$45
$48
52 Weeks Ending 04/16/2011
Bil
lio
ns
Fat Presence Natural Calorie Presence
Vitamin/Mineral Presence Preservative Presence Salt or Sodium Presence
Sweetener Presence Grain Type Cholesterol Presence
Calcium Presence Caffeine Presence Gluten Free
Organic Fiber Presence Fruit and Veg Presence
Protein Presence Omega Presence Lactose Free/Reduced
Hormone Antibiotic Free Antioxidants High Fructose Corn Syrup Free
Multigrain CARB Conscious No MSG
Soy Probiotic Iron Presence
GMO Free Calorie 100 Fortified
Oil Presence Stevia Flax or Hemp
Low Glycemic Plant Sterol
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-5
0
5
10
15
20
25
30
35
05/19/07
08/11/07
11/03/07
01/26/08
04/19/08
07/12/08
10/04/08
12/27/08
03/21/09
06/13/09
09/05/09
11/28/09
02/20/10
05/15/10
08/07/10
10/30/10
01/22/11
04/16/11
Organic Labels All Nielsen Measured Categories FDMxWM
Organics’ growth returned in ’09 & ’10, but rising
gas & produce prices slowing growth in ’11
% Change in Dollar Sales
Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 4-Week Increments vs Year Ago
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2.11.91.7
1.41.11.01.00.90.8
0.0-0.6
-1.3-2.5-2.5-2.6-2.7
-4.6-4.9
-6.0-14.1
Sterol
Probiotic
Flax Or Hemp
Cholesterol Presence
Calorie Presence
Fat Presence
Multigrain
Soy
Preservative Presence
Caffeine Presence
Fiber Presence
Fortified
Sweetener Presence
Grain Type
CARB Conscious
Calorie 100
Vitamin Mineral Presence
Salt Or Sodium Presence
Iron Presence
Calcium Presence
List of struggling label claims shrinking
Unit Percent Change vs Year Ago
Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 13-Wks Ending 04/16/2011 vs Year Ago
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4.0
4.4
7.6
8.4
8.5
8.7
9.5
11.5
12.4
12.9
13.9
14.4
22.7
38.1
47.8Stevia
Low Glycemic
GMO Free
Omega Presence
High Fructose Corn Syrup Free
Hormone Antibiotic Free
Gluten Free
No MSG
Natural
Protein Presence
Fruit and Veg Presence
Organic
Lactose Presence
Oil Presence
Antioxidants
Expanding list of winning label claims
Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 13-Wks Ending 04/16/2011 vs Year Ago
Unit Percent Change vs Year Ago
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1
NMI Health & Wellness Segmentation Model
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Healthier segments more frequent shoppers & bigger annual spenders; slightly more deal prone
0
10
20
30
Well Beings Food
Actives
Magic
Bullets
Fence
Sitters
Eat, Drink &
Be Merrys
0
40
80
120
160
200
Well Beings Food
Actives
Magic
Bullets
Fence
Sitters
Eat, Drink &
Be Merrys
0
10
20
30
40
50
Well Beings Food
Actives
Magic
Bullets
Fence
Sitters
Eat, Drink &
Be Merrys
Shopping Trips Per Household Basket Ring Dollars Per Trip
Basket Ring Dollars Per Household % Dollars on Deal
Total Retail Channels
0
2,000
4,000
6,000
8,000
Well
Beings
Food
Actives
Magic
Bullets
Fence
Sitters
Eat, Drink
& Be
Merrys
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 8/07/2010; excludes gas on or Rx only trips
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Big differences in annual category spend across health & wellness segments
Annual $ Per Household
Among Category Buyers
Well
Beings
Food
Actives
Magic
Bullets
Fence
Sitters
E, D & B
Merrys
Nuts 43 40 34 31 28
Wine 152 119 103 88 93
Yogurt 55 48 41 45 36
Fresh Produce 132 104 92 89 82
Pain Remedies 22 23 26 21 22
Carbonated Beverages 100 121 133 125 155
Beer 117 116 143 124 153
Frozen Pizza & Snacks 49 54 55 61 60
Tobacco & Accessories 243 217 356 276 350
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 8/07/2010 – upc-coded products
Where is your category or brand driving sales?
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And spending similarities in other categories – indulgence matters too or need for further drill downs?
Annual $ Per Household
Among Category Buyers
Well
Beings
Food
Actives
Magic
Bullets
Fence
Sitters
E, D & B
Merrys
Cereal 79 82 72 80 75
Cookies 38 38 39 40 40
Crackers 35 33 31 32 31
Candy 35 33 31 32 31
Ice Cream 75 85 86 82 80
Source: Homescan®, a service of The Nielsen Company;
Total U.S. 52 weeks ending 8/07/2010 – upc-coded products
Where is your category or brand driving sales?
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USDA proposing healthier standards for federally subsidized school lunches
Source: Associated Press & USDA
The new USDA guidelines would:
• Establish the first calorie limits in school meals
• Gradually reduce the amount of sodium in the meals over 10
years, with the eventual goal of reducing sodium by more than half
• Ban most trans fats
• Require more servings of fruits and vegetables
• Require all milk served to be low fat or nonfat, and require all
flavored milks to be nonfat
• Incrementally increase the amount of whole grains required,
eventually requiring all grains to be whole grains
• Improve school breakfasts by requiring schools to serve a grain
and a protein, instead of one or the other
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“National family-centered campaign to Curb obesity”
• Energy Balance: Calories in,
calories out. It’s that simple.”
• First-of-its kind coalition that
brings together more than 160
retailers, food & beverage
manufacturers, restaurants,
sporting goods & insurance
companies, trade associations &
non-governmental organizations
(NGOs), & professional sports
organizations.
Source: TogetherCounts.com
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Grocers stressing health & wellness solutions in store layout, assortment, labels & advertising
Source: Company websites
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Bloomberg’s national salt reduction initiative
Source: LogoBase Library; MultiAd Kwikee; manufacturer websites
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Healthy weight commitment foundation to
reduce 1.5 trillion calories by end of 2015
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“Better for you” items
Source: MultiAd Kwikee
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“Better for you” items
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Indulgent products can still be winners
Source: MultiAd Kwikee
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Live happy & healthy: scrumptious fruity desserts under 200 calories
Source: Kraft Foods
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•Sustainability
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Sustainability in corporate messaging
Source: Company websites
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Strong sustainability messaging
Source: The Coca-Cola Company
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“Green products to be focus of P&G push”
Source: P&G
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Kroger cutting store energy consumption & letting shoppers know
Source: Kroger
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Safeway takes their store brand natural household cleaning line on the road
Source: Safeway
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Processed Apple Products Snapshot
• Includes juice and shelf stable packaged in Food/Drug
and Mass retailers
Over a billion dollars in sales annually
–Trending data indicates a slowing decline of dollars for the latest
52 weeks ( -4%), 24 weeks ( -1%),12 weeks ( -0.5%) ending June
11, 2011
–However unit volume 52 weeks ( -5%), 24 weeks (-7.5%), 12
weeks ( -9.5%)
–This indicating that rising prices are making up the dollars but
consumers are buying less
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Summary
& closing
thoughts
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Consumers share enduring themes
• Health & wellness
• Value
• Convenience
• Comfort & enjoyment
• Green
• Demographics
• Connected
• Global
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What are you doing to take advantage of these enduring themes?
• How do you innovate &
execute against
opportunities that are
evident to others &
come out ahead?
• How do you identify
opportunities where you
can provide unique
solutions?