FMI State Issues Retreat Nashville, Tennessee

Transcription

1 FMI State Issues Retreat Nashville, Tennessee Leslie G. Sarasin Food Marketing Institute President and Chief Executive Officer

2 Life in a Consumer Centric Universe

3 FOOD RETAILING 2013: TOMORROW S TRENDS DELIVERED TODAY

4 THE TEAM:

5 5 propositions Midst of a revolution in food retail thinking Race for space exemplified store-centric thinking Smartphone as appendage: the icon of a consumercentric universe Demographic awareness is crucial Road ahead: personal, digital and virtual

6 MIDST OF A REVOLUTION

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8 NICOLAUS COPERNICUS ( ) On the Revolutions of the Celestial Spheres

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10 THE SPACE RACE

11 Source: FMI, Company 10K, Booz & Company analysis HUGE GROWTH IN CAPACITY FROM square feet in millions added Supermarkets Drug Super Center Club Dollar Conv

12 % growth in capacity 38% growth in sales

13 Source: Nielsen Retail 2016, Annual Reports, MVI, AC Nielsen, US Retail Census, NACS, Booz & Company analysis OTHER FORMATS CAPTURE GROWTH sales by channel Supermarkets Drug Super Center Club Dollar Convenience 1995 Supermarkets $339b

14 Source: Nielsen Retail 2016, Annual Reports, MVI, AC Nielsen, US Retail Census, NACS, Booz & Company analysis OTHER FORMATS CAPTURE GROWTH sales by channel Supermarkets Drug Super Center Club Dollar Convenience 1995 Supermarkets $339b 2012 Supermarkets $336b

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16 THE SMARTPHONE AS APPENDAGE

17 THE SMARTPHONE AS APPENDAGE 49% U.S. population uses a smartphone

18 THE SMARTPHONE AS APPENDAGE 49% U.S. population uses a smartphone 68% by 2017

19 Source: IDC Research Report Always Connected SMARTPHONE USE DURING WAKING HOURS 79% keep with them all but 2 hours 63% keep with them all but 1 hour

20 library map wallet mailbox watch media source notebook weather

21 Isn t there an app for that?

22 Source: Booz & Company 2013 Consumer Trends Survey; Booz & Company analysis; Nielsen analysis 68% say smartphones likely to become integral part of shopping experience

23 Source: Booz & Company 2013 Consumer Trends Survey; Booz & Company analysis; Nielsen analysis HOW DO YOU USE SMARTPHONES? 38% 32% 24% 22% 22% TO COMPARE PRICES IN STORE TO REVIEW PRODUCTS FOR COUPON SEARCH TO PURCHASE PRODUCTS TO SCAN BARCODE FOR PRICE/INFO

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26 MOBILE PHONE AS SCANNING DEVICE

27 provide nutritional information build grocery list calculate costs organize the list by shopping aisle

28 Source: emarketer August 2012 Report; Nielsen; Booz & Company analysis 41 today s average 94 average number of APPs by 2016

29 THE OMNIPRESENCE OF ONLINE

30 3/4 OF CUSTOMERS SHOP 5 OR MORE CHANNELS

31 other items easy meal solutions fresh fruit, vegetables, meat pantry items household goods and cleaning products

32 Source: Nielsen 2017 Retail Update, Booz & Company analysis over 10 years, online orders will encroach on supermarket in-store sales by 11%

33 Source: Booz & Company analysis 65% non-perishable 35% perishable 11% SALES MOVE ONLINE

34 FOUR OPTIONS FOR ONLINE STRATEGY roll over

35 FOUR OPTIONS FOR ONLINE STRATEGY take the misery loves company out

36 FOUR OPTIONS FOR ONLINE STRATEGY go head-tohead

37 FOUR OPTIONS FOR ONLINE STRATEGY get a piece of the action

38 Source: Booz & Company CEO and CTO Executive Interviews bricks and mortar bricks and clicks SEAMLESS SHOPPING EXPERIENCE clicks

39 IT S NOT JUST THE ECONOMY, STUPID. IT S THE DEMOGRAPHICS. BILLY HALLOWELL, ASSOCIATED PRESS, NOVEMBER 12, 2012

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41 Source: US Census data; Booz & Company analysis PROJECTED U.S. POPULATION GROWTH 1% 2010 vs % 15% 37% 14% 31% Caucasian Hispanic African American Asian American Indian Native Hawaiian

42 Source: US Census data; Booz & Company analysis GROWTH OFFERS OPPORTUNITY 2025 households in millions Caucasian Hispanic African American Asian

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44 likes and dislikes tastes and distastes wants and wishes

45 Source: Booz & Company 2013 Trends Consumer Survey CONSUMER PREFERENCES AS UNIVERSAL TRUTHS in order of preference 1 LOW PRICES 2 HIGH QUALITY FRESH PRODUCE 3 ITEMS ON SALE / COUPONS 4 VARIED SELECTION 5 CONVENIENT LOCATION 6 FRIENDLY PERSONNEL

46 Source: Booz & Company 2013 Trends Consumer Survey; Booz & Company analysis organic CAUCASIAN ASIAN HISPANIC AFRICAN AMERICAN

47 Source: Booz & Company 2013 Trends Consumer Survey; Booz & Company analysis VALUE SEEKING BEHAVIORS AFRICAN AMERICANS SEEK LOWEST OVERALL COST CAUCASIANS ACCEPT LIVING WITH LESS HISPANICS COMPARE PRICES ACROSS STORES

48 46% locally sourced 35% sustainable packaging Source: Booz & Company 2013 Trends Consumer Survey; Booz & Company analysis 37% strong online presence 71% read nutrition labels 55% interest in organic CAUCASIAN 25-39

49 Source: US Census data; Booz & Company analysis DON T WRITE OFF BABY BOOMERS YET! projected 2025, % of population 23% 9% 27% 23% 19% under 18 yrs

50 MARKETING AND MERCHANDISING

51 Source: 2013 CROSSMARK In-Store Marketing and Merchandising Assessment; Booz & Company analysis 27,035 total displays across all channels 109 Ethnic

52 Source: 2013 CROSSMARK In-Store Marketing and Merchandising Assessment; Booz & Company analysis SUPERMARKET DISPLAY ACTIVITY BY THEME % display theme 57% 14% 14% 14% 1% Convenience and Meal Occasions Health and wellness Core value Value seeking Ethnic

53 personal digital virtual

54 PERSONAL

55 PERSONAL honor what they value, respect what they think

56 DIGITAL

57 maximize our ability to help them DIGITAL

58 VIRTUAL

59 no boundaries to how and where our customers shop VIRTUAL

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62 Process followed to create the Strategic Plan The Strategic Plan was developed through a structured process designed to allow all Stakeholders to engage and provide direction The Board of Directors defined the overall direction and shaped the content of the five key priorities for enhancement The Strategic Thinking Committee (STC) prioritized each enhancement FMI Staff leads in respective areas developed more detailed plans for each Dedicated Reviewing Committees provided input and validated these plans The STC reviewed the whole strategic plan and ensured consistency Jun Jul Aug Sep Oct Nov Dec Jan Conduct interviews and analysis Identify strategic priorities Develop strategic plan STC Kick-off Input from STC Input from STC and Board Validation from Board 62

63 Objective and Content of FMI s Strategic Plan FMI s Strategic Plan was informed by our long-term vision to be the Industry Association Gold Standard, ensuring exceptional value is consistently delivered across the full business scope of FMI s food retailing membership Objective Focus Clarify FMI s path forward for the next five years What are the areas of highest opportunity for the industry? What do we want to achieve in these areas? And how? What resources will be put against this work plan? What does success look like? How can we measure it? Two primary areas Five key enhancements needed to significantly enhance FMI s value to its members Ongoing activities that constitute the core of FMI s value to its members 63

64 FMI s new strategy is based on 5 key priorities for enhancement 4 Grow the breadth and depth of the membership 1 Strengthen the core proposition Government relations Food safety Voice of Food Retail Emerging issues 2 Re-institute The Show as the industry focal event 3 Lead retailer & supplier total store collaboration 5 Upgrade the operating model 64

65 Emerging Issues Constantly keep members informed/prepared Members want FMI to be at the forefront in identifying emerging industry threats Issue priorities identified by the FMI Board of Directors January 19, Food safety 87% 2. Health care and associated regulations 79% 3. Regulations playing a role in our businesses and lives 4. Consumer confidence in the food supply 62% 51% 5. Crisis management 41% 65

66 Ongoing initiatives Primarily contribute to three major areas to develop leadership Education Research FMI Foundation 1 Value Enablers 2 Topic Ownership Fresh Foods Health & Wellness Sustainability Asset Protection & Supply Chain 3 Industry Integration Private Brands Consumer & Community Affairs Technology 66

67 Ongoing Activities Value Enablers will be leveraged by continuing to emphasize Research & Education as well as build a robust FMI Foundation Education Focusing on expanding and upgrading the educational offerings, including online training Research Focusing on providing insightful forward-looking research to support members FMI Foundation Focusing on research and education in in the areas of food safety, nutrition and health 67

68 Ongoing Activities Topic Ownership-will be achieved by providing thought leadership and knowledge creation above & beyond what is expected by the industry Fresh Foods Command industry leadership in Fresh Foods and lead collaboration throughout industry Health & Wellness Focusing on helping members establish, expand and evaluate Health & Wellness initiatives Sustainability Building on the Sustainability initiative, creating new resources and engaging further the industry stakeholders Asset Protection & Supply Chain Strengthening the FMI Core Proposition and adding unmatched membership value 68

69 Ongoing Activities Industry Integration-will be further supported by improving the existing Consumer & Community Affairs platform and by becoming a leader in Private Brands and Technology Private Brands Providing continual presence within the industry and owning industry knowledge Consumer & Community Affairs Focusing on being well-grounded in shopper trends, concerns and priorities Technology Providing thought leadership on retail relevant technology solutions and best practices 69

70 FMI s Ambition: Be the Gold Standard Association by 2015 What this means for members is FMI will strive to Represent the interests of Food Retail to government, consumers and other stakeholders Provide exceptional value by broadening industry collaboration to encompass members total store Leverage relationships with outside partners to deliver total store value Do all of the above while building an increasingly robust financial model 70

71 Thank You! Leslie G. Sarasin President and Chief Executive Officer 71