onsumers’ shopping and eating patterns? · 2017. 7. 3. · 2 premiums have soared average annual...
TRANSCRIPT
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Presented by
What’s Driving Consumers’ Shopping and
Eating Patterns?
An IRI Perspective
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PREMIUMS HAVE SOARED
Average annual health insurance
premiums for family coverage
$2,937 $5,277 $8,508 $12,865
20062016
20062016
WORKER SHARE EMPLOYER SHARE
Source: Kaiser/HRET Employer sponsored health benefits survey - 2016
In the midst of healthcare premiums rising…
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and chronic diseases increasing…
230M by 2023
42% increase in
chronic diseases
Source: Milken Institute: “An Unhealthy America: The Economic Burden of Chronic Disease”
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TREAT PREVENT
Over the Counter Products
Prescription Medication
Alt. Medicine & Services
Dietary Supplements Devices
Natural Products Food & Beverages
Home Remedies
…Consumers are adopting Holistic Health/Self Care which involves a 360° approach
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37% of Consumers Say FOOD is Just As Powerful as MEDICATION
Food and Beverage Products are the Scaffolding for Building a Healthy Lifestyle
Better for You
Removal of Less Desirable Ingredients
Simpler Ingredients
Healthful Ingredients
ProteinOmega-3s
FiberFruits & Vegetables
Superfoods
Natural & Organic
Antibiotic-Free
Non-GMO
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Dollar trends are positive across the fresh categories correlating to the diet trends…
36
20
19
12
84 2 100
Pharmacist
consultations
Alternative
therapies such
as home
remedies
Total Self-
Care
Vitamins/
Supplements
Over-the-
counter
products
Prescription
medicines
Doctor/
Lab visits
Lifestyle (diet,
exercise, etc.)
Source: IRI Self Care Survey
Meat
DeflationSeafood
StrengthProduce
Churn
Bakery
Softening
Deli Cheese
StrengthDeli Meat
Stable
Deli Prep
Growth
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…and increase in vitamin/supplement trend…
36
20
19
12
84 2 100
Pharmacist
consultations
Alternative
therapies such
as home
remedies
Total Self-
Care
Vitamins/
Supplements
Over-the-
counter
products
Prescription
medicines
Doctor/
Lab visits
Lifestyle (diet,
exercise, etc.)
Source: IRI Self Care SurveySource: IRI POS data, MULO, 52 weeks ending 12/26/16
+1.1%UNIT SALES
8
…and even home devices too
36
20
19
12
84 2 100
Pharmacist
consultations
Alternative
therapies such
as home
remedies
Total Self-
Care
Vitamins/
Supplements
Over-the-
counter
products
Prescription
medicines
Doctor/
Lab visits
Lifestyle (diet,
exercise, etc.)
Source: IRI Self Care surveySource: IRI POS data, MULO, 52 weeks ending 12/26/16
+6.8%UNIT SALES
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We have seen retailer Health & Wellnessprograms accelerate as a result of consumer demands
Nutritionists – classes,
1:1 consultation, etc.
Chef specialties
Online resources
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Retailer online and in-store initiatives have continued to evolve
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FRESH PERIMETER
Click and CollectPurchase of
Whole Foods
solves for:
SCALABILITY
Whole foods has 431
locations nationally
DEMOGRAPHICS
Whole Foods customers
likely to purchase online
and less price sensitive
Perishables
long thought to
be the hardest
part of online
Grocery
Amazon’s Whole Foods acquisition could radically change the game
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0.4%
0.9%
1.7%
2.1%
1.1%1.2%
2.8%
Frozen General Food Refrigerated Beverages Total Food Total F&B FreshPerimeter
Fresh Perimeter outpacing Total Food & Beverage growth by more than 2X over the long term. Growth has slowed in the latest 18 months.
5-YEAR CAGR DOLLAR GROWTH
2.3X
Source: IRI FreshLook POS data, MULO, 52 weeks ending 05/14/17
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Consumers go to the perimeter for fresh and healthy foods
$6.5B
+0.3% vs YAG
$2.8B
+3.1%vs YAG
$6.4B
+2.6%vs YAG
$11.5B
+4.1%vs YAG
$48.7B
-1.2%vs YAG
$63.4B
+3.3%vs YAG
$4.8B
+2.5%vs YAG
Source: IRI FreshLook POS data, MULO, 52 weeks ending 5/14/17
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Total 2016 ABF Sales ($3.1B, 6.9% share, 22% 3-yr CAGR)
ABF’s share of Chicken is reaching critical mass
Source: IRI FreshLook POS data, MULO Full Year 2016
BEEF
28%3 yr CAGR
$1.83B
15.2%ABF share of
protein
CHICKENBEEF
16%3 yr CAGR
$909M
3.7%ABF share of
protein
$170M
6.1%ABF share of
protein
TURKEY
10%3 yr CAGR
PORK
22%3 yr CAGR
$239M
3.5%ABF share of
protein
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Accelerated growth for Organic with less headroomTotal 2016 Organic Sales ($0.7B, 1.6% share, 32% 3-yr CAGR)
BEEF
29%3 yr CAGR
$489M
4.1%Organic share
of protein
CHICKENBEEF
38%3 yr CAGR
$203M
0.8%Organic share
of protein
$31M
1.1%Organic share
of protein
TURKEY
64%3 yr CAGR
PORK
18%3 yr CAGR
$7M
0.1%Organic share
of protein
Source: IRI FreshLook POS data, MULO Full Year 2016
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Significant ABF distribution depth opportunity remains2016 ACV Distribution and Share Top ABF Cuts Ranked by Dollar Sales
56%
26%
22%
26%
32%
Ground
Wings
Drumsticks
Whole Bird
Boneless Breast 15.9%
15.9%
8.4%
6.8%
22.5%
ACV Distribution ABF Share
Source: IRI FreshLook POS data, MULO Full Year 2016
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Retailers that support ABF/Organic meat grow faster
Top 20% of ABF/Organic Retailer RMAs grew
pounds 32% faster across Total Fresh Meat
3.6% pound growth
vs 2.8% Total 2016
US growth
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Top 20% ABF/Organic retailers also grow perimeter categories significantly faster
2.8%
5.3%
9.0%
3.8%
6.7%
13.0%
Fresh Meat Fresh Prepared Deli Meat (ABF/Org)
Total US Growth LBS Top Tier Growth LBS
+32%
+26%
+44%
2016 Growth Total US vs. Top Tier Retailers
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Social Strategy
& Sentiment
Drivers
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Each day, every minute on average…
722,389FACEBOOK LOGINS
150 MILLIONEMAILS SENT
2.98 MILLIONVIDEO VIEWS
20.8 MILLION+MESSAGES
972,222SWIPES
$233,596IN SALES
527,760SNAPCHAT
STORIES
76,194INSTAGRAM
PHOTOS
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Top Social Sentiment Drivers
FOOD
WASTE
+50%
FAIR FOOD/
FAIR WAGE
+104%
MEAT
CERTIFICATION/
CLAIMS
+223%
ANIMAL
WELFARE
+120%
SEAFOOD
SUSTAINABILITY
+97%
Source: IRI Social Advantage, 52 weeks ending 12/30/2016
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Why The Concern?
FOOD
WASTE
+50%
FAIR FOOD/
FAIR WAGE
+104%
MEAT
CERTIFICATION/
CLAIMS
+223%
ANIMAL
WELFARE
+120%
SEAFOOD
SUSTAINABILITY
+97%
Source: IRI Social Advantage, 52 weeks ending 12/30/2016
NOAA reports - Depletion of fishing stocks
Erosion of historical habitats
Controversial catch methods
Activist concerns evolving into consumer concerns
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Sustainable Seafood Key Influencers
Top conversation influencers go beyond
niche advocacy organizations
2.2MM+downloads
24
Top Social Sentiment Drivers in 2016
FOOD
WASTE
+50%
FAIR FOOD/
FAIR WAGE
+104%
MEAT
CERTIFICATION/
CLAIMS
+223%
ANIMAL
WELFARE
+120%
SEAFOOD
SUSTAINABILITY
+97%
Source: IRI Social Advantage, 52 weeks ending 12/30/2016
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Animal Welfare Issues Cause Industry Earthquakes
Cage-Free Eggs Gestation Crate-Free Pork Antibiotic-Free Meat
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Cage-Free Eggs
• Industry-wide retailer and
manufacturer pledges by 2025
12.5% 170
OF US FLOCKS
IN JAN 2017
PLEDGES FROM
RESTAURANTS
• Massive cost increases and
industry consolidation
• Demand may not be met
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Gestation Crates
Major pledges from contract
and company farms
planned/implemented
15% 50%
CRATE FREE PLEDGE
Major retail and foodservice
commitments
SALES IN 2015 SALES IN 2022
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Antibiotic-Free Meat
15% of 2016 chicken sales
40% by 2022
7%Exploding
Food Service
Commitment
OF TOTAL MEAT
RETAIL SALES
3.6% of 2016 beef and pork sales
• New USDA rules in 2017
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Meat industry leveraging multitude of claims
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Animal Certifications – Big opportunity
KEY ISSUES: • Differing standards and practices
• Consumer confusion
• Valued by consumers
30%EXTREMELY
IMPORTANT/
IMPORTANT FOR
PURCHASE
50%WILLING TO
PAY A PREMIUM
12%OF ANIMALS
COVERED BY
THE PROGRAMS
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What’s on the Horizon?
Slow Growth Chickens
KEY ISSUES:
• Activist-led from Europe
• Early acceptance by foodservice
• Similar pattern to cage-free eggs
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Top Social Sentiment Drivers in 2016
FOOD
WASTE
+50%
FAIR FOOD/
FAIR WAGE
+104%
MEAT
CERTIFICATION/
CLAIMS
+223%
ANIMAL
WELFARE
+120%
SEAFOOD
SUSTAINABILITY
+97%
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Food Waste is a Worldwide Issue
2.8 trillionlbs of waste globally
40%of food is
wasted
totaling
$165B
21%of municipal
landfill use
Food waste
is
16%of methane
emissions
A 15% reduction in US food waste
could feed 25 million people
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Europe is leading
France outlawed food waste from
supermarkets
New 2016 laws in place
Supermarkets cannot deliberately
destroy dated product
Must sign donation contracts with
food banks and charities
New simplified process for donation
15% increase
=
10 million more meals
35,000 tonsalready donated
annually
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35%of U.S. consumers
want sustainable
packaging
51.9%
47.6%
35.5%
26.9%
Reduced Packaging Biodegradable
25-44 Total USSource: 2017 IRI Snacking Survey
What’s on the Horizon?
36
Top Social Sentiment Drivers in 2016
FOOD
WASTE
+50%
FAIR FOOD/
FAIR WAGE
+104%
MEAT
CERTIFICATION/
CLAIMS
+223%
ANIMAL
WELFARE
+120%
SEAFOOD
SUSTAINABILITY
+97%
Source: IRI Social Advantage, 52 weeks ending 12/30/2016
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Worker Issues are Holistic
Workforce
Development
ImmigrationWage Levels
Worker Conditions
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Fair Wage / FoodRetailer/grower partnerships:
Worker conditions
Pay/Wage agreements
Formal governance
Structure
Education commitments
Certification Programs
39
Consumer
Attitudes & Behavior
40
Full Spectrum of Natural/Organic Buyers
Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel
Fears They
Won’t Like
Natural/Organic
Products
Proud of Buying
Natural/Organic
Products
True Believers
Enlightened Environmentalists
Strapped Seekers Indifferent Traditionalists
Healthy Realists
Resistant Non-Believers
Struggling Switchers
10% 10% 26% 15%
16%13%10%
41
True Believers
$70K
College /
Post Grad
West
42 avg. age
75% Caucasian
My Top 3 Priorities for…
Willing to Pay More For…
What Holds Me Back
My Sources of Info.
Food & Beverage Personal Care Home Care
Made w/all natural
ingredients
Free of chemicals Most effective
Made w/organic
ingredients
Made w/all natural
ingredients
Eco-Friendly
Best taste Most effective
ingredients
Made w/all natural
ingredients
Food & Beverage Personal Care Home Care
Organic
Non-GMO
All Natural
Eco-Friendly
Fair Trade
Organic
All Natural
Eco-Friendly
Eco-Friendly
All Natural
Organic
• Expense of natural/organic products
• Availability of natural/organic options at
local store
• No all-natural/organic options available
for products I like
Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel
42
Enlightened Environmentalists
$59K
Post Grad
NE/West
61 avg. age
77% CaucasianSkew African American
My Top 3 Priorities for…
Willing to Pay More For…
What Holds Me Back
My Sources of Info.
Food & Beverage Personal Care Home Care
Made w/all natural
ingredientsFree of chemicals Most effective
Best TasteMost effective
ingredientsEco-Friendly
Made w/organic
ingredients
Made w/all natural
ingredientsMulti-purpose
Food & Beverage Personal Care Home Care
Organic
All Natural
Non-GMO
Eco-Friendly
Fair Trade
Organic
All Natural
Eco-Friendly
Eco-Friendly
All Natural
Organic
• Expense of natural/organic products
• Availability of natural/organic options at
local store
Celebrity Chefs
Product Labels
Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel
43
Healthy Realists
$70KSkews $100K+
College+
Throughout
U.S.
39 avg. age
75% Caucasian
My Top 3 Priorities for…
Willing to Pay More For…
What Holds Me Back
My Sources of Info.
Food & Beverage Personal Care Home Care
Best tasteMost effective
ingredientsMost effective
Made w/all natural
ingredientsIs on sale/coupon Is on sale/coupon
Is on sale/couponNot tested on
animalsMulti-purpose
Food & Beverage Personal Care Home Care
All Natural
• Availability of natural/organic options at
local store
Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel
44 44
More Natural/Organic inclined
Less Natural/Organic inclined
6562
47
41
21
9 4
62
35
13
20
2 1 1
All Natural Organic
OVERALL IMPORTANCE
All Natural: 31%
Organic: 15%
Consumer sentiment regarding All-Natural and Organic is highly polarizing
True Believers Enlightened
EnvironmentalistsHealthy Realists Strapped Seekers Indifferent
Traditionalists
Struggling Switchers Resistant
Non-Believers
45 45
More Natural/Organic inclined
Less Natural/Organic inclined
57 5651
48 46
3833
55
46
3642
31 292426
19
43
28 27
42 42
No Antibiotics No GMO Minimally Processed
Similar sentiment is seen with ABF, Non-GMO and Minimally Processed
Enlightened
Environmentalists
OVERALL IMPORTANCENo Antibiotics: 46%
Non GMO: 36%
Minimally Processed 33%
True Believers Enlightened
EnvironmentalistsHealthy Realists Strapped Seekers Indifferent
Traditionalists
Struggling Switchers Resistant
Non-Believers
46 46
More Natural/Organic inclined
Less Natural/Organic inclined
61
46
27
49
2316 10
Segments who are more environmentally concerned are pre-disposed to buying from companies that practice humane treatment of animals
OVERALL IMPORTANCE
Humane Treatment: 30%
Less Natural/Organic inclined
Enlightened
EnvironmentalistsTrue Believers Enlightened
EnvironmentalistsHealthy Realists Strapped Seekers Indifferent
Traditionalists
Struggling Switchers Resistant
Non-Believers
47
11
15
14
17
9
9
10
8
23
21
18
17
15
13
The True Believers and Healthy Realists represent 25% of the population and a third of purchasing of random and fixed weight chicken.
NaturaLink Segments
Rfg Chicken* Dollar Distribution
*Fixed and Random Weight52 Wks Ending 12/25/16; Total US All Outlet
+2.1% +0.6%
More Natural/Organic inclined
Less Natural/Organic inclined
Enlightened
EnvironmentalistsTrue Believers Enlightened
EnvironmentalistsHealthy Realists Strapped Seekers Indifferent
Traditionalists
Struggling Switchers Resistant
Non-Believers
48
Executive Agenda for the Next 3-5 Years• ABF Chicken sales are reaching critical mass
• How will you take advantage of the opportunity
to increase distribution?
• Transparency and social issues directly impacts:
• Sales
• Brand health
Brand equity
• Develop your own 3-5 year view on how drivers and
category trends will evolve:
• Product requirements
• Sales impact
• Retail strategy