Nordic food survey 2014

Transcription

1 Nordic food survey 2014

2 Foreword At EY we are proud to present our first Nordic food survey. An overview of the sector like this has never been done in the Nordics before. The survey is based on a number of defined trends where the respondents have given their future vision for each trend. In this report we give you our professional reflections, based on our experiences from working with companies both on the retailer and the consumer products side for a long time. You will not find conclusions in black and white on how to handle the changes in the future. We welcome the opportunity to discuss in greater detail the implications of these findings and look forward to hearing from you. 3 Nordic food survey 2014

3 Arne Matre Nordic Retail and Consumer Products Leader, EY Thanks to all EY would like to thank all respondents in this study for their participation and also our collaborator, Ipsos, who made the research for us. A special thank you goes to the four participants who put aside valuable time from their busy agendas and approved of being both interviewed and filmed for this survey. They are Karolina Hagberg, Business Area Director, Purchasing & Category, Coop Sweden; Anders Svensson, CEO, ICA Sweden, and deputy CEO, ICA Group; Arne Kristian Kolberg, CEO, Nortura; and Johan Karlström, Senior Vice President, Lantmännen Food Sector. We are very grateful for your willingness to share your views on the future food industry with us. Karolina Hagberg Business Area Director Purchasing & Category Coop Sweden Anders Svensson CEO ICA Sweden and deputy CEO ICA Group Arne Kristian Kolberg CEO Nortura Johan Karlström Senior Vice President Lantmännen Food Sector Ipsos is an innovative, entrepreneurial, client-focused organization, providing research services to clients on a global basis. Nordic food survey

4 Method On behalf of EY, Ipsos Sweden has conducted a study in order to identify the key trends in the food industry. The purpose of this study is to create an understanding of how the Nordic food industry will evolve in the future. What are the driving forces, and which are the barriers? To provide insight into how the future industry may be developed, leaders within the food industry have been asked about what trends they can see by the year What impact will these trends have on their organizations? What opportunities and challenges do they create? How will these trends develop on the Nordic market? In which ways will their organizations respond to these trends? The time frame for this study is 5-10 years until the year This time frame was selected as it allows us to get away from the operative planning; however, it is close enough for us to make a realistic assessment of the future based on the trends we can see today. A total of 110 quantitative responses were received from people in a managerial role within consumer products companies as well as from retailers in the Nordic region: Sweden, Norway, Denmark and Finland. These have been supplemented by four qualitative interviews with senior management people in the industry, both on the consumer products side and the retailer side. 4 Nordic food survey 2014

5 Executive summary The food industry is undergoing change. Increasing consumer power, demographic shifts and technological innovations are some of the factors that contribute to new trends and challenges within the industry. Both consumer products companies and the retailers agree that food quality, in terms of ingredients, materials and production methods, as well as convenience, in terms of simplicity and ease of use, will be the key trends as we move toward Consumer products companies emphasize the growth of private labels and efficiency as their main priorities, while retailers have a strong focus on channel management and price pressure. Notably, e-commerce is mentioned as the biggest trend for the future, yet it is deemed to be the least impactful of the discussed trends. The key challenge for e-commerce seems to be distribution; however, in order to succeed, it is equally important to consider what additional value the channel offers the consumers. We expect to see a ketchup effect in the Nordics regarding e-commerce, or omni-channel as it is more often called. Content 4 Method 5 Executive summary 6 Introduction 7 Overall outlook on future trends in the Nordic food industry 8 Spontaneous key trends 9 Overall picture of the six focus areas emphasized by EY 1. Health 2. Shopping outlets 3. Private label 4. CSR 5. E-commerce 6. Capital investments Nordic food survey

6 Introduction Looking back in history, there has been a gradual power shift over time. Starting with the consumer products companies being in power, however, as competition on price, shelf space and visibility increased, power shifted into the hands of the retailers. Today, it is the consumer who is in the driver s seat. It is no longer possible to just create a product, put it in the store, tell people that it is good and sell it now consumers need to know and decide for themselves. When it comes to food, consumers are more interested, conscious and demanding than ever before. The passion for food can be seen in the large number of cooking shows on TV, and cookbooks sold, but most important on the effect the changing consumer preferences have in the food industry. Consumers are demanding more organic, healthy and fairly produced food, which puts more pressure on the consumer products companies and, with the increase of private labels, even in the middle and upper price levels. We are not just part of a big gray mass. We want to be unique in our own way. Food can contribute to providing us with a sort of uniqueness. Arne Kristian Kolberg, CEO, Nortura At the same time demographic changes are taking place, there is increased urbanization, more single households and fewer households with access to cars, which affects the playing field for the retailers. In these times of change, we asked the leaders of the Nordic food industry, What will be the most important trends for the food industry looking into the future? This study will explore the selected challenges that lie ahead of the industry in the Nordics. I think that we are in an extraordinary, exciting period of time right now. There are many factors that drive growth in our industry. Anders Svensson, CEO, ICA Sweden and deputy CEO, ICA Group 6 Nordic food survey 2014

7 Overall outlook on future trends of the Nordic food industry When looking into the future, the food industry claims to focus mainly on consumer-driven trends and changes. It is about being sensitive to the consumers needs, listening to what they want, and being able to deliver the best and most convenient solution. Both the retailers and the consumer products companies point out that in order to be successful, they need to cooperate more with each other. Cooperation will enable them to meet consumer needs and jointly deliver the best solution to the consumer. It is essential to be responsive to consumer demands. Karolina Hagberg, Business Area Director, Purchasing & Category, Coop Sweden We need to understand the consumer better than anyone else within the categories in which we operate. Johan Karlström, Senior Vice President, Lantmännen Food Sector When speaking about future trends in the food industry, two main themes can be seen that incorporate several of the trends identified by EY. One of the main categories that is frequently mentioned as a key trend for the future is food quality. Food quality is identified as an umbrella theme for several factors and incorporates transparency, environmental impact, durability and origin of the ingredients. The term food quality thus covers areas that are traditionally seen as corporate social responsibility (CSR) issues. The second category that is frequently mentioned is consumer convenience. The umbrella theme convenience includes both the development of more convenient and time-saving meal solutions for consumers, but also more convenient distribution channels for consumers, such as online grocery shopping. The common perception seems to be that in order to be successful in the industry you need to find the most convenient solution for the consumer. In general, the trends impact consumer products companies and retailers in equal measures. However, CSR is expected to have a higher impact on retailers compared to consumer products companies. This might be related to growth in private labels, which consequently means that retailers take responsibility for the whole value chain. Nordic food survey

8 Spontaneous key trends Both consumer products companies and retailers agree that food quality and convenience will be the key trends up until On the consumer products side, a lot of emphasis is put on food quality. Food quality is a broad term that includes several factors such as origin of the ingredients, the health effects of the food, food safety, transparency and traceability. An increased focus on improving the quality of food is predicted to be the most important trend for the future. Another important trend that is emphasized on the consumer products side is the changes in the value chain. Until the year 2020 it is expected that the actors in the food industry will be integrating more steps of the value chain, thus having better control over food safety and increasing traceability, among other factors, in order to secure food quality. Consequently, this suggests that the private label segment will grow in importance in the future. Online grocery shopping is another trend that is believed to be here to stay and to prosper in the future. Finally, convenience is highlighted as an important trend. This is linked to the predicted increase in online grocery shopping, but convenience also includes offering more convenient food solutions for the consumer, such as ready meals, healthy options and other solutions that facilitate the everyday life of consumers. It is thus a broad term that includes new product offerings and involves e-commerce and food-delivery solutions. On the retailer side, the emphasis is placed on the distribution channels. Just like with the consumer products companies, the retailers believe online grocery shopping will increase. The retailers, however, mainly discuss online shopping from a logistics perspective, meaning that the delivery is the key to making it a success. Another important aspect of distribution channels is changes in the outlet structure. Some store formats are believed to increase the number of outlets, while others are likely to be reduced until Another important aspect that is highlighted by the retailers is convenience for the consumers. From the retailers perspective this will manifest itself in an increased overlap of sectors, i.e., food courts in stores, such as the salad bars that are popular today. The stores will increasingly cater to all needs of the consumers. In addition, the retailers also highlight food quality as an important trend for the future. Just like the consumer products companies, the retailers take a broad perspective on food quality and include factors such as traceability, health, local produce and ecological products. This is in line with the global trends we see. 8 Nordic food survey 2014

9 Overall picture of the six focus areas emphasized by EY For this study EY has selected the following six areas to focus on: e-commerce, the health trend, private labels, CSR, shopping outlets and capital investment. While the first five areas are identified by the respondents, the last one, capital investments, is added by EY as we see that it is an equally important area for the food industry in the future. These focus areas will be presented in the order of impact that they are believed to have on the food industry in the Nordic marketplace in the future. Impact level of the first five focus areas on the Nordic food industry % 70% 69% Nearly 80% believe that the share of groceries sold online will double by % While online sales only accounts for a small share of total sales, it represents a rather large total sum in financial terms for the Nordics about: US$5 billion 60 55% 54% % Health Outlet structure Private labels CSR E-commerce Impact High impact Highest impact The main difference between the spontaneous key trends and the selected focus areas chosen by EY for this study is that e-commerce is spontaneously identified as the biggest trend for the future of the food industry; however, the impact of this trend is not believed to be as significant when compared to the other trends. This is notable as nearly 80% believe that the share of groceries sold online will double by While online sales only accounts for a small share of total sales, it represents a rather large total sum in financial terms about US$5 billion for the Nordics. Nordic food survey

10 10 Nordic food survey 2014

11 1. Health 2. Shopping outlets 3. Private label 4. CSR 5. E-commerce 6. Capital investments Nordic food survey

12 1. Health The health trend is predicted to have the biggest impact on the food industry up until Predicted change Both the consumer products side and the retailer side agree that the health trend will grow and that the impact of this trend will be high. Local consumer products companies rank health as a more important trend than multinational corporations do. Impact on the industry % 74% 73% Concerning healthy food, the consumer products companies focus primarily on content of the products in general and the issue of additives in particular. The majority believes in a reduction of additives in food and predicts an increase of natural food free from additives in the future. The retailer side emphasizes traceability, and especially increased labeling, as a future trend. Increased labeling can make it easier for the consumer to make a healthy and informed choice of products. It will also make it easier to identify the origin of the product. In addition, the retailers believe in a strong increase in ecological and organically grown products. This is an answer to the pursuit for honest food; you want to know what you are actually eating. Arne Kristian Kolberg, CEO, Nortura % Total CP Retailer Impact High impact Highest impact Triggers for growth The health trend is mainly consumer-driven; the growing interest among consumers for healthy meal alternatives and their increased demand for information about the products are the main driving factors. It is believed to be unlikely that there will be law-enforced restrictions on, for instance, salt or fat content in food on the Nordic market. The exception to this is Finland, where restrictions on salt content already have been enforced. Compared with the other Nordic countries, it is considered more likely that Finland will introduce other restrictions too. 12 Nordic food survey 2014

13 Manifestation of trend Drivers Demand for fresh ingredients/organic Labeling/ traceability Awareness/ health focus Natural/no additives 19% 25% 30% 30% The health trend is already strong on today s market, but it is believed that it has not yet evolved to its full potential. The demand for healthy products is predicted to increase in the future. This trend is about food quality from a holistic perspective. It will manifest itself both in consumers striving to eat better food and choosing not to eat food that is bad for them. It is about making healthier choices and eating healthy food, cooked from scratch. Sales of fresh foods are therefore believed to increase along with stores specializing in fresh products, such as super- and hypermarket formats. The offering/ product innovation Legislation Other 11% 12% 15% Do not know/ 18% no answer % Total CP Retailer Nordic food survey

14 2. Shopping outlets The focus area that is believed to have the second-largest impact on the food industry is changes in the structure of shopping outlets. Predicted change Drivers The offering E-commerce Number of outlets Location Price Convenience Experience Overlap of sectors Other Do not know/ 21% no answer % Total CP Retailer 5% 5% 6% 10% 15% 15% 17% 20% 29% The general opinion is that the changed structure of shopping outlets will have a big impact on the food industry as a whole. Outlet structure is perceived as a nuanced term by the food industry and includes the store format, the number of stores, locations of stores and in-store offers. The in-store offers are believed to have a greater impact on the industry than the actual number of shopping outlets or the location. Furthermore, it is expected that there will be a greater differentiation between the store formats both concerning price, quality and type of products. The prediction for 2020 is that we will see more fresh products in soft discount stores as well as more niche stores and specialist shops. The need to find solutions to everyday situations is also one of these overarching megatrends that will come, I believe. Karolina Hagberg, Business Area director, Purchasing & Category, Coop Sweden 14 Nordic food survey 2014

15 Many people within the Nordic food industry believe that hard factors, such as outlet locations, online shopping and the number of stores, will be the most important factors, but equally many consider the soft factors, such as offer in-store, the shopping experience and overlapping of sectors, will have the biggest impact. The retailers believe in the hard factors and highlight the number of stores and online shopping as focus areas concerning the changing structure of shopping outlets. The consumer products companies, on the other hand, believe in the softer factors and highlight differentiation in pricing, both toward premium priced outlets and discount stores, as the most influential factors. Some differences in focus areas can be seen between the countries. Denmark highlights price differentiation in particular and predicts more discount stores, Norway focuses on central locations, Finland highlights e-commerce and Sweden views in-store offers as the most important factor that will have impact on the food industry. Triggers for growth The retailers highlight the demographic changes as the driving force behind the change in structure of shopping outlets. A clear trend is urbanization more and more people move to large cities, which will affect the shopping outlet structures in the future. It is likely that smaller shops will be more common, as it is difficult to find space for large supermarkets in central locations. Furthermore, fewer households in urban areas have access to a car, which means that they cannot shop for all their groceries at once, something that will also have an impact on the expansion of supermarkets as well as packet sizes. In addition, single households are becoming more common, something that will also affect the demand for other packet sizes compared to those on sale today. This trend could have a significant impact on both parties in the food industry. Manifestation of the trend The retailers have a more pessimistic view on the continued viability of the hypermarket than people on the consumer products side, as the majority of retailers believe in a smaller decrease in this store format. The reduction is however not predicted to be very dramatic. The consumer products companies on the other hand predict a more dramatic change in store format structure. Some predict a big increase in hypermarkets, while others foresee a large reduction. Fewer hypermarkets, and consequently an increased number of smaller stores in the future, suggest an increased demand for smaller packages, as the display area will be smaller. The gap in predictions between the retailer and the consumer products companies concerning the number of hypermarket outlets in the future could therefore indicate a risk for miscommunication between the two parties, particularly concerning the demands for different packet sizes. While a change in structure of outlets is predicted, it is still believed that all formats have their place in the future. It is also likely that we will see more niche stores. One example is specialist stores, but it will also be possible for a store that caters to a mass market to have a more defined offer and a more individual profile. Such a profile could, for instance, be a strong focus on fresh products, to be better at providing inspiration to consumers or to focus on simple transactional offers. Individual stores will thus have more freedom in selecting profiles that caters to the needs of their local market, regardless of the chain as a whole. There are a number of factors within the demographic area: one is the large migration of people into cities, especially to the Stockholm region, which is very strong. It should not be underestimated concerning what it means for retailers, both in the areas that are becoming depopulated, but also in the areas that people are moving to. Anders Svensson, CEO, ICA Sweden Nordic food survey

16 3. Private label Private label is predicted to have a continued strong impact on the food industry in the future. Today, private label has approximately 20% 25% of the market share in the Scandinavian markets. This is lower than in many other European countries and is predicted to grow until Arne Matre, Partner at EY Norway, estimates it to be in the range of 10% 20%. Predicted change The majority believes in an increase of the private label segment. The consumer products companies predict a larger growth in the private label segment. The retailers, on the other hand, believe in a more modest growth rate until Growth of private label 29% 5% Stay the same Increase Strong increase Don t know 24% 42% Consumer products companies believe to a higher degree that private label will have a strong impact on the food industry, in comparison with the retailer side. The reason for this may be that the consumer products companies sense an increasing competition from the retailer side and see the private labels as a threat to their own branded products. Consumer products companies are increasingly losing the marketing and branding functions to the retailers, who are taking more control over the value chain. This issue also affects the category management processes in the retailers. Triggers for growth The main trigger for this trend is the opportunity for differentiation between grocery stores. The private labels are viewed as a means to close gaps between consumer demands and what they see as available, as well as affordable, on the market today. Manifestation of the trend Both multinational corporations and local producers are potential producers of private labels in the future. The general opinion is that multinational corporations will be the main producers in the private label segment. They will offer private labels along with their regular brands. However, the retailers and local consumer products companies believe to a higher extent that local producers will produce the private label products. Seen from a Swedish perspective, the retailer side can see that the consumers have a high demand for Swedish products, which is why they try to expand their range of locally produced products and consequently want to find local consumer products companies for their private label production. Producers of private labels Mainly small local producers Both Mainly large international producers Only large international producers % Total CP 5% 4% Retailer 42% 46% 16 Nordic food survey 2014

17 Private labels segments 1% Only discount brands Mainly discount brands 26% The overall prediction is that we will see a larger differentiation within the private label segment. Today, the segment is largely dominated by discount products, but until 2020 it is predicted that we will see more private labels among the premium segment as well, and they will be competing directly with the branded products. It is believed that the private label segment will continue to grow both in the discount segment and the premium segment; however, the emphasis will still be on discount products. Both 53% The private labels will not only provide a low-cost option to consumers but will also have a brand building purpose, which allows the producer to differentiate themselves with more niche products such as organic product ranges. 12% Mainly premium brands % Total CP Retailer The growth in the private label segment suggests that retailers are increasingly becoming producers, which in turn makes division of responsibility over the control of the value chain more diffuse between consumer products companies and retailers. Retailers are taking more control over the whole value chain and are thus increasingly taking responsibility for production, marketing and sales, while consumer products companies are becoming mainly producers. Nordic food survey

18 4. CSR CSR is believed to have an increased impact on the food industry up until Trend for CSR 6% 1% 20% Impact on the industry % 68% 50 45% 40 73% 30 Decrease Stay the same Increase Don t know % Total CP Retailer Predicted change The majority believes in an increase of the importance of corporate social responsibility on the industry. The retailers believe that CSR will be a significant factor to a slightly higher degree than the consumer products companies. Impact High impact Highest impact Considering the impact on the industry, the retailers once again predict that CSR will have a greater impact on the industry compared to the consumer products companies. The impact is believed to be the greatest in Sweden and the least significant in Denmark. Triggers for growth This trend is mainly consumer-driven. In line with the health trend, consumers are increasingly choosing ecological products and making more sustainable choices. From a Nordic perspective legislation is not necessary; the industry is pursuing this issue regardless of regulations. The only exception is once again Finland, a country that has a more tolerant view on regulations. I think of it as more of an industry responsibility, which we can resolve within the business model rather than with additional legislation. Karolina Hagberg, Business Area Director, Purchasing & Category, Coop Sweden 18 Nordic food survey 2014

19 73% believe the trend for CRS will increase up until % Manifestation of the trend CSR is believed to manifest itself in an increased focus on sustainability and transparency in the whole value chain. Drivers Legislation Competitiveness Consumer demand 15% 14% 58% In terms of transparency, consumer products companies put more emphasis on the value chain, while the retailers put more emphasis on the environmental aspects. The study shows that factors that have are traditionally characterized CSR, such as transparency and traceability of the ingredients, are increasingly becoming routine in the food industry and are included in the umbrella term food quality. Social responsibility is thus very important in the food industry, not from a legislation point of view but in terms of food quality. It is believed that a more holistic perspective on CSR will give companies a chance to differentiate themselves in the future. Cost reduction 12% Profitability 4% Other 11% Do not know/ 23% no answer % Total CP Retailer Nordic food survey

20 5. E-commerce A clear trend that will become more important in the future is online shopping. This trend is mentioned as the trend for the future, but the level of impact on the industry is predicted to be relatively low compared to the other trends. Impact on the industry % 52% 56% Predicted change Today, grocery shopping online accounts for 1% of the total. It is predicted that online shopping will experience an extremely high growth rate until Retailers especially predict extremely high growth for e-commerce, or omni-channel as the phenomenon more often is called. The impact of this trend is predicted to be high by the majority. Retailers in particular believe that this will have a big impact on the food industry. In relation to the other trends, however, e-commerce is rated as one of the trends that will have the least significant level of impact on the industry. E-commerce expected growth rate 30 41% 21% % 0 % Total CP Retailer Moderate growth: -2% Strong growth: 2-5% Extreme development: 6%+ E-commerce is predicted as the biggest trend for the future. #1 20 Nordic food survey 2014

21 Triggers for growth This trend is partly driven by changes in demographics. An increasing number of households are living in urban areas and do not have access to a car, which means that they are looking for convenient solutions. The trend is also partly driven by technological advances. Today there are better technical solutions to support online shopping. You can make advanced purchases through your mobile phone and there are applications that help consumers to make online purchases. Because of this it is predicted that online shopping will increase significantly by Seen from a long-term perspective, it is also plausible that online shopping will influence how the physical stores look and what is sold there. However, significant changes in store formats is considered to be beyond the 2020 time frame. Manifestation of the trend Retailers have previously tried the online channel, but very few have managed to achieve profitability. In order to succeed with online grocery shopping it is considered to be necessary to adapt the offering to the online channel. The retailers do not believe that it is possible to apply the same concept in both the physical channel and the online channel. It is necessary to add additional value for it to hit big. You have to either have a better offer, a cheaper offer or a more convenient offer. Karolina Hagberg, Business Area director, Purchasing & Category, Coop Sweden Another area that I believe will affect us greatly by 2020 is the development of new technology. Anders Svensson, CEO, ICA Sweden The key factor in succeeding with online grocery shopping is the issue of delivering the products to the consumer. The distribution must be simple and convenient for the consumer, and it must therefore be designed with consideration to the consumers preferences on how they want to receive the goods they ordered online, whether it is at train stations or directly to the office. The discussion of distribution should therefore be expanded from a simple single point delivery system to include individualized pickup points that are more convenient for the consumer. Drivers Distribution Convenience The offering/quality Price Technology Marketing 20% 15% 11% 9% 32% 30% Profitability 6% Other 13% Do not know/ 15% no answer % Total CP Retailer Nordic food survey

22 6. Capital investments Predicted change Capital investments are predicted to increase in the future. Retailers especially believe in increased investments. Only Finland believes in reduced capital investments in the future. Level of investments 56% Decrease Stay the same Increase 11% Triggers for growth 25% The financial trends are primarily driven by consumer demands for traceability in the value chain. Manifestation of the trend Consumer products companies primarily believe that increased capital investments will be made in production efficiency, product innovation and expansion. The retailers predict that the capital investments will be made primarily in shopping outlets and in distribution channels, including online shopping. Drivers Efficiency/ streamlining production Shopping outlets 21% 24% Compared to how the retailers rank the impact of future trends on their industry, the retailers are investing their money in the right place. The majority of retailers believe that distribution channels and a changed structure of store formats will have the biggest impact on their markets, and these are also the two focus areas for future investments. The combination of new channels and the consistent need for renovating outlets will create a continuous need for investments for retailers. The market has also recognized that newly renovated shiny outlets show increased sales revenue. There is however some discrepancy in how the consumer products companies rank the impact of future trends and their perception on future investments. Consumer products companies rank food quality, more control over the value chain and convenient meal solutions as the main trends for the food industry, which would suggest more investments in product innovation. However, the focus areas for investment that are mentioned primarily concern increased production efficiency. Arne Matre from EY believes that the food industry parties underestimate the need for capital investment. There will constantly be a demand for high quality and structural changes. The food industry will also need inspiration from the consumers continuously. In combination with high competition in this sector, this suggests that cost cutting is more important than to follow each and every trend on the market. To a higher extent, KPIs are believed to include how well the company creates additional value to the consumer. During the last couple of years we have seen trends that Nordic consumer products companies increase their investment levels outside the Nordic countries. This is partly due to their interest in operating in low-cost countries, but it s also a way of easing the market entry. Distribution/IT 20% Expansion (geographic growth, 15% acquisition, internalization) Product innovation 13% (including packaging) Marketing/branding/ 9% advertising Consumer insights/demands 4% Do not know/ 29% no answer % Total CP Retailer 22 Nordic food survey 2014

23 Moore insights on ey.com/consumerproducts: Consumers on Board How to copilot the multichannel journey Cash on the table Working capital management in the consumer products industry 2014 Main contacts in the Nordics Consumers on Board: How to copilot the multichannel journey Arne Matre Nordic Retail & Consumer Products Leader Office Mobile Cash on the table 2014: Consumer products working capital management Martin Brenner Assurance Office Mobile Consumer Products Deals Qarterly: CPDQ focuses on the global transaction landscape. It includes an analysis of the deals over the last quarter, insights on the drivers behind them and views on what the future may hold. Erik Haagensen Transaction Advisory Services erik.haagensen@no.ey.com Office Mobile Talking Food: Regular news digest of current developments in the food sector. Sofie Mannerstråle Advisory sofie.mannerstrale@se.ey.com Office Mobile Margin unlocked: Integrated margin management to deliver breakthrough performance in consumer products Søren Næsborg Jensen Tax soeren.n.jensen@dk.ey.com Office/Mobile Cash on the table: working capital management in the consumer products industry 2014 Issue 19 Q Consumer Products Deals Quarterly Total deal value continues to climb Analysis of transactions in Q in the global consumer products sector Brand new order Margin unlocked Integrated margin management to deliver breakthrough performance in consumer products 1 Nordic food survey

24 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com EYGM Limited. All Rights Reserved. SCORE No. EN0622 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com