FRESH PERSPECTIVES ON BAKERY CONSUMERS. Prepared for the 2016 International Baking Industry Exposition

Transcription

1 FRESH PERSPECTIVES ON BAKERY CONSUMERS 2016 Prepared for the 2016 International Baking Industry Exposition

2 THE CURRENT LANDSCAPE FOR BAKERY: BUSY LIFESTYLES DEMAND CONVENIENCE HEALTH & WELLNESS DRIVES SHOPPING BEHAVIOR CHANNEL COMPETITION HEATS UP DELIVERY, ONLINE PURCHASES, OTHER DISRUPTORS MAKE WAVES

3 THE FRESH PERIMETER CONTINUES TO GROW DOLLAR % SHARE CENTER 63.2% PERIMETER 36.8% (+0.3) % 36.5% (+0.9) % 35.6% 2013 $8.7B Growth $12.4B Growth SHR. PT. CHG. VS YA Source: Nielsen Perishables Group Advanced Fresh Perspective; Total U.S.,

4 Total food $ sales per store Copyright 2014 The Nielsen Company. Confidential and proprietary. HAND-IN-HAND: TOTAL STORE AND FRESH SUCCESS Top-performing fresh retailers have top-performing sales across the whole store 50% Half of total food sales are fresh at top-performing fresh retailers +10% 9% Total food sales at top-performing fresh retailers are growing 9% of total fresh sales are from bakery at top-performing fresh retailers 30% -6% 7% HIGH FRESH VELOCITY RETAILERS LOW FRESH VELOCITY RETAILERS Source: Nielsen Advanced Fresh Perspective, 52 Weeks Ending 12/26/15 4

5 BAKERY DOLLARS GREW CONSISTENTLY Bakery volume was relatively flat over the last 7 years BAKERY DEPARTMENT SALES $13.0B $13.6B $14.3B $14.8B $15.7B BAKERY PERFORMANCE DOLLAR CONTRIBUTION TO IN-STORE BAKERY , CAGR DOLLARS +3.8% Breakfast Bakery 21% Breads and Rolls 28% VOLUME +2.5 AVERAGE RETAIL PRICE +1.6% Desserts 49% Other Miscellaneous Bakery 2% Source: Nielsen Perishables Group FreshFacts - History Projected Stores

6 IN STORE BAKERY IS COMPENSATING FOR ITS STRUGGLING COUNTERPARTS IN CENTER-STORE DOLLARS CATEGORY DOLLARS Source: Nielsen Perishables Group FreshFacts, 2015 vs YAGO; Nielsen Advanced Fresh Perspective, 52 weeks ending 12/26/2015 vs YAGO 6

7 HEALTH CLAIMS ARE DRIVING POCKETS OF GROWTH IN CENTER STORE BAKERY NO CLAIM $ % Change GLUTEN FREE $ % Change GMO FREE $ % Change ORGANIC $ % Change GROCERY COOKIES +1% +9% +13% +8% CAKE MIX -9% +2% -2% +31% MUFFIN MIX -4% +45% +11% +57% Health-focused center store bakery brands are driving growth in stagnant categories Nielsen Advanced Fresh Perspective, 52 weeks ending 12/26/2015 vs YAGO 7

8 FRESH HAS ROOM TO GROW Breads, cookies and muffins have the largest penetration gap of in-store bakery categories CATEGORY HOUSEHOLD PENETRATION 69% 95% 93% 63% Fresh Center Store 49% 28% BREADS COOKIES MUFFINS Source: Nielsen Homescan Total Shopper View Specialty Panel, 52 weeks ending 07/02/16 8

9 HOW CAN BAKERIES IMPROVE TO BE MORE RELEVANT, AND ATTRACT NEW SHOPPERS?

10 BAKERY SHOPPERS ARE FAMILIES, OLDER COUPLES 99% of households purchase bakery items OLDER BUSTLING FAMILIES 13% of Bakery Sales KIDS AGE % of Bakery Sales INCOME >$100K 26% of Bakery Sales 5+ MEMBER HOUSEHOLDS 15% of Bakery Sales SENIOR AND EMPTY NEST COUPLES 28% of Bakery Sales Source: Nielsen Homescan Total Shopper View Specialty Panel, 52 weeks ending 07/02/16

11 MUST WIN BY TAILORING TO DIFFERENT CONSUMER GROUPS OLDER BUSTLING FAMILIES Healthy options for families looking for healthier alternatives that meet the needs of all family members INCOME >$100K The right assortment of premium options, such as artisan breads, to pair with other premium categories EMPTY NEST AND SENIOR COUPLES Quick trip convenient options that fit the needs of smaller households 11

12 WINNING WITH DIFFERENT CONSUMER GROUPS OLDER BUSTLING FAMILIES Healthy options for families looking for healthier alternatives that meet the needs of all family members INCOME >$100K The right assortment of premium options, such as artisan breads, to pair with other premium categories EMPTY NEST AND SENIOR COUPLES Quick trip convenient options that fit the needs of smaller households 12

13 TODAY S BAKERY ISN T RELEVANT TO THE HEALTH- CONSCIOUS CONSUMER Of all in-store bakery sales, 95% of items have no declared health benefit HEALTH DECLARATION % CHG IN-STORE BAKERY DOLLAR SALES VS. YAGO % CHG CENTER OF STORE DOLLAR SALES VS. YAGO NO TRANS FAT 1% 1% GLUTEN FREE 5% 9% NO ARTIFICIAL INGREDIENTS 0% 4% CONTAINS FRUITS/VEGETABLES 0% 2% ORGANIC 220% 14% PROTEIN 0% 13% NO SUGAR ADDED 1% 3% WHOLE GRAIN 1% -2% MARKET HEALTH/WELLNESS IN THE IN-STORE BAKERY: Signage, Stickers Product Merchandising Employee expertise Source: Nielsen Perishables Group FreshFacts FY2015, Nielsen Syndicated, Total US, YE2015 vs YE2014; Center Store Bakery (CSB) Includes Baked Bread, Baking Mixes, Cookies, Fresh Desserts, Frozen Baked Goods, Refrigerated Baked Goods, Pancake Mix 13

14 OPPORTUNITY FOR BRANDS TO THRIVE IN THE HEALTH & WELLNESS WHITESPACE IN ISB Brands can provide consumers with trusted names, reliable to meet diet needs SHARE OF ISB SALES WITH HEALTH CLAIMS OF THE 5% WITH HEALTH CLAIMS, SHARE FROM BRANDS No Health Claims 95% Brands 80% Bakery sales only Source: Nielsen Answers on Demand, Nielsen Fresh Facts 14

15 CONSUMERS WANT THEIR CAKE AND KALE TOO No veggie is off-limits for creative bakers Source: Pinterest.com, tastingtable.com

16 WINNING WITH DIFFERENT CONSUMER GROUPS OLDER BUSTLING FAMILIES Healthy options for families looking for healthier alternatives that meet the needs of all family members INCOME >$100K The right assortment of premium options, such as artisan breads, to pair with other premium categories EMPTY NEST AND SENIOR COUPLES Quick trip convenient options that fit the needs of smaller households 16

17 GOURMET BAKED GOODS AND SPECIALTIES MAKING AN IMPACT AT ALL TYPES OF RETAILERS THE TREND: THE RESPONSE: THE AIM: THE GOURMET-IZATION OF PRODUCTS AVAILABILITY OF MORE PREMIUM FOODS IN FRESH AT RETAIL LIKE HIGH-QUALITY BAKED PRODUCTS (BREADS) RICH-DECADENT ITEMS (FILLED DOUGHNUTS) TO CREATE A DESTINATION OR EXPERIENCE FOR CONSUMERS IN ISB Source: Nielsen Perishables Group 17

18 CREATING HYPE FOR THE BAKERY ONLINE Viral marketing on Pinterest, Instagram, Facebook, Buzzfeed, and YouTube pique interest in baked goods + In only 4 months, James Wright s sweet potato pie review became an internet sensation boasting millions of views and tens of thousands of positive ratings Ever since the Cronut s success in 2013, bakers have been trying to use social media to drive interest in new bakery Hybrids. Patti LaBelle s Sweet Potato Pie Walmart dollar sales 8/15-1/16 Cronut Google Search Trends Index 1/13-6/15 While not expecting it to be a long-term bakery staple, carry the hot item at the peak of its fame to get people into the store and drive interest Source: Nielsen Perishables Group FreshFacts August 2015 January 2016, Google Trends, Cronut January 2013 June 2016

19 WINNING WITH DIFFERENT CONSUMER GROUPS OLDER BUSTLING FAMILIES Healthy options for families looking for healthier alternatives that meet the needs of all family members INCOME >$100K The right assortment of premium options, such as artisan breads, to pair with other premium categories EMPTY NEST AND SENIOR COUPLES Quick trip convenient options that fit the needs of smaller households 19

20 GRAB THE COAT TAILS OF THE DELI DEPARTMENT Deli dollar sales are growing faster than any other department in the store, driven by deli prepared foods DELI PERFORMANCE IN-STORE BAKERY AND DELI SHARE DOLLAR SALES: +7% VOLUME SALES: +5% PROXIMITY Utilize these departments adjacent locations to cross-promote and crossmerchandise CONVENIENCE Drive connections between the bakery and deli prepared foods to meet the growing consumer need for convenience 17% 21% Other Cheese Meat Activate cross-department connections for these occasions: 58% Prepared Foods Deli $ Sales DINNER TO-GO DINE-IN PARTY TIME Source: Nielsen Perishables Group FreshFacts Total U.S. (FCA does not include convenience, drug or dollar), 52 Weeks Ending 12/26/15 20

21 LEVERAGE THE STRONG CONNECTION BETWEEN DELI AND BAKERY FOR DINNER TONIGHT IN THE BASKET: BAKERY BREAD & DELI SOUPS AND SANDWICHES BAKERY BREAD Stock-Up trips 70% 34% Fill-in trips Quick trips 24% 7% 17% 49% Drive more quick trips across deli & bakery Source: Nielsen Total Store Connectivity Study, 2015

22 CREATE A NO-WORK-ENTERTAINING DESTINATION Convenient, prepared products from the bakery and deli are connected to other prepared offerings in the fresh departments BAKERY COOKIES/ BROWNIES/ DESSERT BARS DELI PLATTERS BAKERY CAKES DELI APPS/ SIDES/ DESSERTS Make no-work entertaining even easier with displays of deli, bakery and produce platters together, and offer build your own options No-Work Entertaining categories common connections: DELI DIPS/ SPREADS/ TOPPINGS DELI PREPARED CHICKEN DELI ENTREES VALUE-ADDED VEGETABLES Package bakery products in attractive trays and dishes so consumers can just pop-off the top and focus on their guests instead of working in the kitchen Source: Nielsen Total Store Connectivity Study,

23 WHAT IS THE FUTURE OF BAKERY?

24 FUTURE: DISRUPTIONS TO WATCH FOR Embrace new consumer and retail trends to stay relevant EXOTIC PROTEIN ON-DEMAND EXPERIENCE Source: Company Websites 24

25 WHAT IS THE HEALTH AND WELLNESS FUTURE FOR ISB? People's approach to life-long health will become anticipatory and aspirational. INSECT PROTEINS! Food and beverages will be expected to go beyond general health claims and make commitments to helping people achieve their near and long term goals. Source: Company websites

26 E-COMMERCE DELIVERING BAKED GOODS AmazonFresh delivering local bakery and farmers market products CAPITALIZE WITH E-COMM Create consistency in marketing visuals through product branding Partner with complementary products (i.e. jam, meat, party supplies) for add-on purchases Use geo-tagging to promote local bakeries and Farmers Markets Ensure product packaging maintains highest quality of freshness Generate buzz and WOM with exciting shipping packaging Source: Company websites

27 FRESH, MADE-TO-ORDER ITEMS CREATE BAKERY THEATER Retailers showcase how fresh their bakery items are with live, customizable offerings MADE-TO-ORDER DONUTS WINN DIXIE CUSTOMIZABLE DIPPED FRUIT MARIANO S FRESH FUDGE, MADE DAILY STANDARD MARKET Source: Company websites

28 HOW DO YOU MEET THE DEMOGRPHIC NEED? Health & Freshness Matters to Families PROVIDE THE RIGHT HEALTHY OPTIONS Top claims in Center Store, such as Gluten Free, No Artificial Colors of Flavors and Organic have the opportunity to grown in ISB Brands have opportunity differentiate in Health and drive growth Premium Shoppers Want Premium Bakery CONNECT ACROSS STORE WITH PREMIUM BAKERY Shoppers are intrigued with gourmet, unique and ethnic options to try and explore in ISB Trends offer opportunities for sales growth, even though they might not be long standing Convenient Solutions Help Older Couples CAPITALIZE ON CONVENIENCE Deli and ISB have many strong sales correlations to each other, and together can cater to this quick, convenient shoppers needs for a variety of occasions E-commerce and alternative means of getting ISB products, such as vending machines are emerging

29 QUESTIONS? Sarah Schmansky Nielsen Fresh NIELSEN FRESH SARAH SCHMANKSY DIRECTOR