The UK Prawn Market Jonathan Hodgson Commercial Director Lyons Seafoods& Farne Salmon. Nielsen 12th Oct 13 Dunnhumby -13th Oct 13 Nectar 26th Oct 13

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1 The UK Prawn Market Jonathan Hodgson Commercial Director Lyons Seafoods& Farne Salmon Nielsen 12th Oct 13 Dunnhumby -13th Oct 13 Nectar 26th Oct 13

2 The UK Seafood Market

3 Total UK Seafood market continues to be driven by growth within chilled Total Fish Chilled Frozen 12th Oct 13 YoY % Chg 12th Oct 13 YoY % Chg 12th Oct 13 YoY % Chg 52 w/e 12 w/e Spend 2.4bn 4.0% 1.7bn 6.9% 688m -2.4% Units 872m 2.1% 569m 4.2% 302m -1.8% Spend 541m 4.9% 391m 7.3% 150m -0.9% Units 194m -0.9% 128m 0.9% 65m -4.2% Chilled is predominately being driven by Ready To Cook (+9.4% or + 91m). Key Growth Species -RTC Salmon, Cod and Sea Bass. Chilled Ready To Eat is also in growth (+3% and + 18m) driven by Key Growth Species - Salmon, Surimi, Crab and Prawns. The decline in Frozen is being driven by RTC (-3.1% or - 19m) Key Declining Species -Haddock, Cod, WWP (raw) and Scampi. Frozen RTE remains in growth (+2.2% or + 2m) Key Growth Species WWP (cooked) and Seafood Selection. Nielsen Scantrack Total Market: we 12th Oct 13

4 Total UK Shellfish is worth 500m annually UK Shellfish Market Value Share of Shellfish Total Shellfish Value = 500m +0.5% Units 204m -1.9% 35% Chilled Shellfish Value = 327m +3.4% Units = 135m -0.9% Frozen Shellfish Value = 173m -4.5% Units = 68m -3.8% 65% Chilled Frozen Chilled Shellfish accounts for over 65% of sales and is the key performing category. Nielsen Scantrack Total Market: 12th Oct 13

5 The total Market is stable with growth in chilled offsetting the declines in Frozen 3 Year Value Sales Trend of UK Shellfish Total 179m 181m 173m Frozen Shellfish Chilled Shellfish 323m 316m 327m MAT WE MAT WE MAT WE Nielsen Scantrack Total Market: 12th Oct 13

6 The ChilledShellfish market is dominated by Prawns but predominantly Warm Water Share of Chilled Shellfish Species Warm Water Prawns 49% Worth 161m and 56m Units Prawns accounts for 72% of Chilled Shellfish Sales CWP has gained 1% market share over the last MAT Cold Water Prawns 16% Prawn Cocktails 8% Surimi 7% Seafood Selection 6% Worth 48m and 20m Units Mussels 5% Crab 3% Scallops 2% Other 1% Nielsen Scantrack Total Market: 12th Oct 13

7 In Frozen, CWP has been in long term decline YoY Actual % Change Warm Water Prawns 52% Share of Frozen Shellfish Species Seafood Selection 29,2% Scampi 25% Cold Water Prawns 15% Seafood Selection 3% Scallops 2% Other WWP Scampi Scallops -2,6% -8,3% -9,2% 24,1% CWP has lost 1% market share over the last MAT Mussels 1% Other 2% CWP Mussels -10,3% -15,0% Nielsen Scantrack Total Market: 12th Oct 13

8 CWP and WWP appeal to different consumers WWP Aged Single Adults Young Couples Middle Aged Couples Confident Cooks Health Conscious High Affluence CWP Aged Retired Single Retirees Retired Parents Confident Cooks Traditional Less Affluence CWP needs to appeal to a younger generation in order to secure a long term market Retailer Loyalty Card Data

9 The usage occasion for prawns is also very different WWP Stir Fries Asian Cuisine Mediterranean Cuisine BBQ s CWP Prawn Cocktails Sandwiches Salads Jacket Potatoes Snacking Young, healthy, contemporary flavours & recipes Traditional, classic everyday value family favourites CWP need to embrace more modern main meal occasions Retailer Loyalty Card Data

10 Key challenges for CWP is to entice lost and new consumers as well as driving more usage occasions Key Performance Indicators for Chilled CWP Key Performance Indicators for Chilled WWP Customer penetration 5.8% (-13.5%) Spend Per Customer 7.14 (+11.5%) The CWP is losing consumers as well as existing shoppers purchase less often Customer penetration 13.7% (-0.9%) Spend Per Customer (+7.5%) Frequency of purchase 2.12 (-2.9%) Spend per visit 3.37 (+14.8%) Frequency of purchase 2.66 (+0.4%) Spend per visit 3.93 (+7.1%) Units per visit 1.25 (+7.3%) Average Price per unit 2.68 (+6.9%) Units per visit 1.43 (+1.5%) Average Price per unit 2.75 (+5.5%) Retailer X Consumer key measures

11 CWP volumes are very price sensitive and can respond well to promotional activity Cold Water Prawns Rolling 52 Week Trend 34m 33m Price Inflation lead to significant decline in volume Price and volume stability Increased CWP Promotions due to poor availability of WWP 2,65 2,60 32m 2,55 Unit Sales 31m 30m 29m Price increase of 24p (8%) correspondedto a 5m unit decline (15%) 2,50 2,45 2,40 Average Unit price 28m 2,35 27m , Unit Sales Average Unit Price Nielsen Scantrack Total Market: 160 we 12th Oct 13

12 WWP volumes are more resilient to price inflation, although recent availability issues have impacted growth Warm Water Prawns Rolling 52 Week Trend 97m Price Inflation but volume remains in growth Price and volume stability Availability and Price driven 2,75 96m 2,70 95m 2,65 Unit Sales 94m 93m 2,60 2,55 Average Unit price 92m 2,50 91m , Unit Sales Average Unit Price Nielsen Scantrack Total Market: 160 we 12th Oct 13

13 UK Shellfish Market Summary Shellfish is worth 500m and is being driven predominantly by Chilled. Prawns are the largest species accounting for over 70% of sales. WWP s are worth 252m and have a 51% share of Shellfish. CWP s are worth 74m and account for a 15% share of shellfish. CWP s appeal to an older, more traditional but less affluent consumer who use CWP s in more classic recipes. WWP s appeal to a younger, more contemporary & affluent consumer and they are used much in more in cooking with modern & ethnic flavoured cuisines. Reduced penetration and Frequency of Purchase are the key challenges for Prawns, but especially for CWP s

14 The Future of Cold Water Prawns in the UK Short Term Chilled is the key growth area and should be the main area for focus. Chilled CWP is worth 48m and is growing +9.9% Frozen CWP is worth 26m and is declining 10.3% Opportunity to capitalise on lack of availability of WWP by promoting CWP. Consumers are buying into CWP on price. Need to resist inflation pressure to retain current levels of penetration Medium to Long Term The category needs to attract new, younger consumers to continue to grow CWP s must be viewed as a viable alternative to WWP at both consumer and retail levels. Need to move consumers away from classic recipes and inspire more modern flavour profiles. We will only achieve this by developing an industry approach to marketing CWP s

15 Thank You Jonathan Hodgson