Welcome to the Pulse Q1 2013 edition for Food. We hope you find it useful. Please do not hesitate to contact us if you have any questions or comments at EU.Marketing@symphonyiri.com www.iriworldwide.eu
Food IRI Pulse Q1 2013 About the Report ThisFoodreportisoneof10super category reports designed to show high-level comparison and analysis for retail markets across major countries in Europe. This report contains data gathered from around Europe. This market was split into the following categories: Vegetables, Potato Products, Ice Cream, Desserts, Meat, Fish, Ready and Dough & Bread Products. The report highlights key metrics such as total sales figures, market trends, category shares, winners and losers for Europe and for individual countries. The data has been sourced from IRI retail databases and Eurostat the statistical branch of administration for the European Commission. The countries included in the report are: France, Germany, Italy, Netherlands, Spain and the UK. The market channels used for each country in this report are as follows: Country UK ES DE NL IT FR Channels used Hypermarkets, Supermarkets, Drugstores and Impulse Outlets Hypermarkets, Supermarkets, Hard Discounters, Drugstores and includes the Canary Islands Hypermarkets, Supermarkets, Hard Discounters and Drugstores Hypermarkets, Supermarkets, Hard Discounters and Drugstores Hypermarkets, Supermarkets, Small Self Service, Hard Discounters and Drugstores Hypermarkets and Supermarkets For analytical purposes the data sourced from available retail databases has been consolidated to provide consistent results. However, for some countries it has not been possible to source data pertaining to certain categories. When this has occurred it has been documented in the Notes section found at the end of the report. 2
Food IRI Pulse Q1 2013 In the Radar Food across Europe continues to grow in value terms, inflation remaining the main factor masking the general decline in Food volumes. The Horse Meat Scandal that hit at the start of 2013 has not helped sales in the short term, notably within ready meals. The impact of this appears to have been short lived with category sales returning to normal. Séverine Malmejean Unit Director France, IRI Economic figures influencing consumer behavior Population in Unemployment (%) Average 12 Months Inflation Rate GDP in ( ) January 2011 January 2012 Feb. 2013 Average 2012 Mar. 2013 Average 2012 2012 (Estimate) 2013 (Estimate) France 65.0 65.3 10.8 10.2 +1.9 +2.5 2,032,297 2,059,358 Germany 81.7 81.8 5.4 5.5 +2.0 +2.4 2,644,200 2,694,499 Italy 60.6 59.3 11.9 10.7 +2.9 +3.5 1,565,916 1,568,388 Netherlands 16.6 16.7 6.2 5.3 +2.9 +2.8 600,638 604,459 Spain 46.1 46.1 26.6 25.0 +2.7 +2.3 1,049,525 1,051,076 United Kingdom 62.4 63.2 7.7 7.9 +2.7 +3.7 1901001.4 1,854,920 Source: Eurostats, March 2013 3
Food IRI Pulse Q1 2013 Global Trends Value sales and growth and decline in the last year +1.2% +1.7% +0.9% +3.3% Value Sales in ( ) Total EU 23,024 DE 8,114 UK 4,501* FR 3,703 IT 3,509 ES 2,284 NL 913 *based on an exchange rate of 1.150 to the pound -0.6% +0.4% Positive Trend Static Trend Negative Trend TOTAL EUROPE +1.7% Value sales for the last six quarters 7,000 6,000 954 964 France 5,000 963 818 951 833 Germany 4,000 1,949 1,923 2,065 1,988 2,044 2,016 Italy 3,000 2,000 1,000 0 949 1,020 763 789 767 773 245 232 221 214 220 215 602 680 555 483 535 467 1,065 1,088 1,185 1,153 1,071 1,091 01-Jan-12 02-Apr-12 01-Jul-12 01-Oct-12 30-Dec-12 31-Mar-13 Netherlands Spain UK Period Ending 4
Food IRI Pulse Q1 2013 Europe Category Value Sales and Share of Value in the Last Year 21.6% 7,000 6,633 16.7% 6,000 5,000 4,963 28.8% 10.1% Euros 4,000 3,000 2,000 3,840 2,335 2,161 1,745 0.0% 1.7% 0.0% 4.1% 7.6% Ready Fish Meat Desserts All other Meats 9.4% 1,000 0 952 385 6 5 Vegetables Potato Products Dough & Bread Products Poultry Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago 6,633 4,963 Key Trends Overall at a European level, Food sales continue to grow consistently in value terms, with a 1,7% rise in the latest year vs. 1,7% in Q4. 1.5 1.2 3,840-0.5 2,335 2.7 2,161 5.7 This topline trend is hiding disparities between countries : Germany and France driving value growth with respectively +3,3% (vs. 2.1% in Q4) and +1,7% (vs. +1,7%), when other countries show a slowing trend vs. 2012 : UK from +1,9% to +1,2%; Netherlands +1,6% vs. +0,9% and Italy +1,2% vs. +0,4%. Italy even switch from +0,5% to -0,6% in Q1. Ready Fish Vegetables Meat Value growth continues to be driven by inflation whilst consumption (volume sales) decline. Total Sales % vs. YA Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom As a consequence, Hard Discounters and Private Labels benefit from the situation, except in France. 5
Food IRI Pulse Q1 2013 Europe Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 50 100 150-25 -20-15 -10-5 0 Meat 116.6 Ready 97.5-0.5 All other Meats Potato Products 68.4-1.3 Poultry Vegetables 61.9-11.0 Dough & Bread Products 58.7-21.1 Fish Category Insights The top 5 performing categories had a combined growth of 403 millions vs. last year. This slow down in absolute sales growth (vs. 412 millions combined growth in Q4 2012) mainly coming from whilst on the other hand the likes of Potatoes and Vegetables have shown an accelerated absolute sales growth. Meat growth still driven by German Discounters due to the development of their Private Label product offering. Ready are surprisingly on a good trend in all countries despite the Horse Meat Scandal. This growth is mainly due to pizzas and snacks fuelled by high levels of promotions. The Horse Meat Scandal did have a negative impact on sales in Germany, France and the UK, although this was short lived. Potato is still driven by price inflation in UK and innovation and promotion in France. Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom 6
Food IRI Pulse Q1 2013 France Category Value Sales and Share of Value in the Last Year 21.9% 1,200 18.4% 1,000 993 26.8% 11.6% Euros 800 600 400 811 680 429 372 335 0.3% 1.9% 9.0% Ready Fish Vegetables Desserts 10.0% 200 72 0 Meat Potato Products Dough & Bread Products 10 993 Ready Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago 0.4 811 0.7 680-0.5 Fish Total Sales % vs. YA 429 Meat 8.2 372 0.5 Vegetables Key Trends The Market is relatively static in volume terms in the first quarter of 2013 but is showing a marginal (-0,3%) annual decline in volume sales. No significant shifts regarding value growth: with +1,7% in Q1 compared with Q4 +1,8% whilst total FMCG shows +2,1% on the same period. Inflation remains the main driver of value growth although price inflation is slowing quarter on quarter: +1,9% vs. +2,5% in Q4 and +3,0% in Q3 As a consequence French consumers have started upgrading their repertoire from the beginning of the year: +2,6 in Q1 vs +1,2 in MAT on the frozen market and at FMGC level as well (+1,1% in Q1 vs.+0,3% MAT) Private Label are main losers in this fight as they continue to lose market share. 7
Food IRI Pulse Q1 2013 France Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 10 20 30 40 0 0 0 0 0 0 0 Meat 32.6 Potato Products 16.1 5.8 Ready 3.8 Desserts 3.1 Category Insights Meat is once again the biggest contributor to Food value growth in France (+8,2% vs. +8,5% in Q4) but volume sales are no longer in the same trend (- 0,4% vs. +0,2% in Q4). 47% of the growth coming from Charal. Potatoes continue to grow in value terms (+8,7%) and at slower rate in volume (+3,2%). McCain is the key winner, driven by innovation and promotion, while Findus negative trend is slowing the overall category. underwent strong annual volume decline in Q1 with -3,5% in volume, (one with the worst evolution) - very bad weather conditions in France at the end of the year and in March 13 (March 2012 was unexpectedly warm). Value growth driven by mini cups, with Haagen-Dazs, leader in this segment, and Unilever launching Magnum cups. Ready : driven by Pizzas (+4%) and Pies (+5%) innovation. Horse Meat Scandal: Announced mid February, the crisis first affected the whole frozen market. Since March, only Ready seems to been negatively impacted, as affected products were removed from the sale. By the end of Q1 13, value sales of the category were declining at -16,9% vs. YA. desert are driven by the expansion of private labels product offering. 8
Food IRI Pulse Q1 2013 Germany Category Value Sales and Share of Value in the Last Year 17,7% 3 500 15,2% 3 000 2 500 2 934 36,2% 9,2% Euros 2 000 1 500 1 438 1 231 7,4% 1 000 500 750 598 545 405 214 2,6% 6,7% 5,0% Ready Desserts Potato Products 0 Meat Fish Vegetables Dough & Bread Products 2 934 Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago Key Trends Food sales increased mainly due to inflation (>3,7% vs. YA) whilst volume is stable; Hypermarkets and Hard Discounters are the main winners with growth reported in almost all categories. 1 438 1 231 Significant increase in promotional sales and price/kg has been observed across all channels; Hard Discounters has shown significant growth in both value and volume. 7,2 1,7 3,0 750 7,2 598 3,4 Meat s growth was mainly driven by development of Private Label in Hard Discounters where volume increases was coupled with increased average prices. Ready Total Sales Meat Fish % vs. YA Desserts Ready which declined in the last Quarter has returned to growth this quarter mainly due lower priced Lasagne products by the manufacturers ahead of the Horse Meat Scandal. 9
Food IRI Pulse Q1 2013 Germany Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 20 40 60 80 100 120-16 -14-12 -10-8 -6-4 -2 0 Meat 96,9 Ready 50,4 Fish 50,3 36,1 Desserts 19,5-14,2 Dough & Bread Products Category Insights Ready grew in the past 12 months due to Complete Ready. However, in Q1, this was affected by the Horse Meat Scandal which was first reported on 15 th January by Ireland s Food Safety Authority; and later spread to Germany in February. As a direct effect, sales of frozen ready meals declined and more notably that of Lasagne products which featured in the scandal. Lasagne sales declined by more than 50% having an overall negative impact on the total frozen ready meals category of around 15% (ex Hard Discount). Private Label was more affected by this crisis than brands. German consumers eat very little horse meat even though it is known to be healthy option. According to the IRI consumer study on food scandals 81% of the German consumers consider the real scandal in this specific case in the lacking declaration of food contents rather than being concerned about health issues or due to disgust for horse meat. Meat is in positive growth in both meat & poultry; primarily it is being attributed to the significant development of Private Label poultry within the Hard Discounters. Dough & Bread Products continues to decline due to the continued losses in Discounters (due to Bun/Croissants & Baguette/Ciabatta); however it is growing in supermarkets (800-1499sqm) due to Bun/Croissants. Fish growth is fueled by the double digit growth of Private Label for both Fish & Sea Food; notably driven by the introduction of Private Label Molluscs /Crusts within Lidl. 10
Food IRI Pulse Q1 2013 Italy Category Value Sales and Share of Value in the Last Year 21,8% 1 200 1 057 19,6% 1 000 29,9% Euros 800 600 400 772 694 678 0,9% 1,0% 0,9% 3,2% 3,6% 19,2% Vegetables Potato Products Desserts Dough & Bread Products 200 0 127 113 35 33 32 Fish Ready Meat Dough & Bread Products Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago 1 057 772 694 678 Key Trends Year on year most of frozen categories still showing a positive trend; situation worsened over the last 6 months: shopper is reducing stock at home and conveying purchases on necessary products only not favourable condition for non essential categories Q1 13 confirming that vegetables are still in growth whilst larger markets such as and Fish record remarkable declines. 0,4-2,3 1,9 1,8 127-0,2 Formergoodperformingsegmentslike Pizza and Meat have stalled in Q1 13. Fish Vegetables Ready Potato Products Promotions continue to grow across all markets off setting price inflation mitigating volume sales declines. Total Sales % vs. YA Horse Meat Scandal had little impact in Italy with no tangible impact on market performances. 11
Food IRI Pulse Q1 2013 Italy Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 5 10 15-20 -15-10 -5 0 Vegetables 13,2 Ready 11,7 4,1-0,3 Potato Products Meat 3,9-2,3 Dough & Bread Products Desserts 3,3-18,1 Fish Category Insights : Q1 13 value sales -1,8% ; First Dishes (pasta) continue to show significant decline, their value for money proposition is weakened by a shopper s reduced capability to spend ; nevertheless innovation is allowing some contrast to this trend (Findus A regola D arte) ; a long phase of growth for Pizza has slowed in the short term. Fish : Q1 2013 value sales -3,8% ; in the Italian hard economic picture, Fish in general is becoming a luxury item that many shoppers are forced to renounce; when looking for proteins, shoppers are possibly looking to switch to cheaper alternatives (cheese, white meat). Vegetables: Q12013 valuesales+1,9% ;betterperformanceforcheaper natural veg such as Spinach & Peas along with greater promotional support and increased consumption of added value types boosting category sales ; Recipe d Soups bucking this positive trend - strong price inflation led by branded products. Meat : Q1 2013 value sales -3,1% (vs +7,4 on Y2012) ; innovation in coated poultry which drove the growth over the last 2 years, now starting top back. Q1 2013 value sales -10% ; current shopper behaviour cutting impulse categories/purchases; along with poor weather influences; winter was hard and spring started in late reducing the opportunity to recover sales in the short term; will a new wave of NPD, mainly coming from leader Unilever revitalise category sales? Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom 12
Food IRI Pulse Q1 2013 Netherlands Category Value Sales and Share of Value in the Last Year 21,4% 450 400 350 393 43,1% 12,9% Euros 300 250 200 150 195 118 0,6% 1,4% 0,5% 2,2% 7,8% 10,0% Ready Fish Vegetables Dough & Bread Products Poultry 100 50 0 Potato Products Desserts All other Meats 92 71 20 12 6 5 393 Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago Key Trends In the Netherlands, Food is in growth by 2,1% in value terms. Yet, the growth is behind that of the rest of the food and non food market. 2,7 195 2.2 118 92-3,0-3,8 71 4,8 In volume terms, the largest relative growth is from Dough & Bread Products. Ice cream grows on a yearly basis, but is declining on quarterly basis. Discounters are gaining share from service supermarkets. Besides Dough & Bread Products, Potato products and are showing a faster rate of growth within the Discounters than that seen in the service supermarkets. Ready Fish Potato Products Vegetables Total Sales % vs. YA 13
Food IRI Pulse Q1 2013 Netherlands Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 2 4 6 8 10 12-4 -4-3 -3-2 -2-1 -1 0 Ready 10,2-0,5 All other Meats 4,2-1,3 Poultry Vegetables 3,3-1,3 Desserts Dough & Bread Products 1,0-3,6 Fish -3,6 Potato Products Category Insights The top 5 winning categories had a combined growth of 18,7 million vs. last year. The growth comes for most part from Ready. The sales decline for the Top 5 losers is 10,3 million and can mainly be attributed to Fish and Potato Products. The growth in is mainly driven by Ready including Meat Snacks andpizza.meatsnacksgrowthtoalargeextentisdrivenbyinflation.therehavebeen several pack size adjustments in the frozen meat snacks market, which has led to increased volume but lower unit sales. Volume growth is visible for mini snacks as well as some typical Dutch meat snack products, which is probably related to the trend of spending more quality time at home with family and friends. Pizza growth mainly down to price inflation. Dr. Oetker is the only brand achieving volume growth. In the last quarter, 1/3 rd of the pizzas was sold in promotion. continues to grow in value and Volume across all segments. Yet, the largest growth can be contributed to the introduction of a single serve spoonable ice cream by Unilever. The biggest declines are seen in Fish and Potato Products. Fish declining in value, not in Volume. Potato products declining in Service Supermarkets, but still showing growth within discounters. For total supermarkets, the decline is visible for Potato dishes and potato balls and slices. A reason for the fall back in these segments could be the fresher and healthier alternatives that are available within chilled? 14
Food IRI Pulse Q1 2013 Spain Category Value Sales and Share of Value in the Last Year 26,8% 800 743 700 600 613 552 32,5% 24,2% Euros 500 400 300 0,4% 0,2% 3,0% 5,1% 7,8% Fish Ready Dough & Bread Products Desserts 200 100 0 179 116 Vegetables Potato Products Meat 68 9 5 743 Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago Key Trends Quarter on quarter Foods in value decline -0,6% in MAT. Whilst volume shows marginal growth 0,8%. 613 552 The increased level of tax from September 12 putting pressure on sales. The main drivers being; Fish & Seafood (-2,7%), Pizzas (1,2%) or (- 0,1%). -2,7-0,1 Fish Total Sales Ready % vs. YA 179 0,7-0,2 Vegetables 116 Dough & Bread Products 3,2 Private Label benefitting from the increased market prices, increasing their dominance +0,2% whilst manufacturers sales decline by -1.5%. Private Labels share now standing at 57,5pt. Over the last few months Pescanova has been receiving the wrong kind of publicity with corporate issues and financial audits. 15
Food IRI Pulse Q1 2013 Spain Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 1 2 3 4-25 -20-15 -10-5 0 Ready 3,7 Dough & Bread Products 3,6-0,4 Vegetables Potato Products 1,0-0,8 Meat 0,7-1,1 Desserts -20,8 Fish Category Insights Nestle is the leading frozen manufacturer, with 7,1 pts of market share, but in decline by -6,1% in -6,8% in volume. In second position Pescanova despite its recent problems is in value growth +3,5% and thirdly, Unilever which is in value decline (-7,2%). The new Findus Group (Findus+Bonduelle) will have changed the assortment and the mix of Vegetables and Ready to Eat categories; turning it in to the brand leader in many sectors however sales continue to struggle (-6,8% in value & -10,5% in volume). The Pizza category trend is reducing the last emphasis; due to Nestle and Oetker. Both manufacturers combined hold more than 59,6 pts of the category (-3,7vs YA). Nestle with 29,5 of share and -10,8% in value. Oetker with 30,1 of share and +2,1% in value. (-0,1%), with Unilever is the market leader, with 17,1 points of value share but with sales -7,2% unable to compete with Private Label s dominance in the category. (69pts value share, +1,2% and a volume share of 84,8pts). 16
Food IRI Pulse Q1 2013 United Kingdom Category Value Sales and Share of Value in the Last Year 23.4% 17.3% 1,200 1,083 1,055 1,000 24.1% 16.0% Euros 800 600 400 777 719 474 200 10.5% 3.9% 4.8% 0 Ready Fish Potato Products Vegetables Desserts Meat 217 176 1,083 Ready Top 5 Categories Evolution Value Sales ( ) and % Change vs. Yr Ago 1.7 1,055 0.9 777-3.2 Fish 719 7.2 Potato Products 474 6.6 Vegetables Key Trends The market in the UK is maintaining value growth whilst volumes decline. The growth in value driven by inflation as the volume decline shows a general decline in consumption which is not exclusive to with many ambient categories struggling in the same way. Shoppers are managing their budgets by reducing the amount they buy in terms of the number of units so categories which perhaps are seen as more of a luxury and not a necessity such as would be hit the hardest. It was predicted that Foods would benefit from the recession but this has yet to be seen. Total Sales % vs. YA Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom 17
Food IRI Pulse Q1 2013 United Kingdom Top 5 Winners: Value Sales Top 5 Losers: Value Sales 0 10 20 30 40 50 60-30 -25-20 -15-10 -5 0 Potato Products 48.1 Vegetables 29.4 Ready 17.8-8.4 Desserts 9.4-17.5 Meat -25.7 Fish Category Insights Value growth driven by inflation and NPD masking the overall decline in demand as shoppers see this as an unnecessary purchase as they manage their food budgets. Potato remains a key growth category within Foods fuelled by price inflation which is set to have an impact throughout 2013 due to the poor harvest in 2012. Potato s promotional volume notably off shelf has declined significantly in the latest quarter so one to watch. Ready Sales of frozen Pizza s are driving growth driven by the likes of Chicago Town s Deep Dish & Takeaway fuelled by their high levels of promotions. Standard ready meals struggling with retailers concentrating on their Own Label chilled offering with welladvertised dine in meal deals. The Horse meat scandal which broke on January 2013, has had a negative impact on sales of Ready and Red Meat - notably Own Label and specific products which highlighted in the press and withdrawn from sale. NPD from Bisto & Linda McCartney unable to have any major impact on overall category sales. Vegetables Value growth driven by inflation & NPD, with volume relatively static. NPD focussing on convenience and added value such as single serving steam/microwavable pouches. Key NPD from Birds Eye Field Fresh, Fullers Spinach, Birds Eye Rice Fusion. Fish Birds Eye & Bird Eye Fish Fusions are the winners with Own Label which was in growth is now one of the biggest losers in Q1 13. Birds Eye fuelled by increased off-shelf deals and deeper price cuts. Young's and Own Label are unable to compete with the increased pressure from Birds Eye. Europe includes: France, Germany, Italy, Netherlands, Spain and United Kingdom 18
Food IRI Pulse Q1 2013 Final Notes Notes on Category Definitions for Countries Due to the diverse products found in individual countries across this market it was necessary to consolidate the available data into the categories in this report. In some cases it wasn t always possible to align products across all 6 countries hence the need to highlight any anomalies in the report. Those exceptions are listed below: Dough & Bread Products The UK data in this report does not include this category 19
Food IRI Pulse Q1 2013 Resources To gain insight into opportunities across specific categories, segments, channels or retailers, contact your IRI client service representative regarding custom analyses leveraging the following resources: InfoScan Census is a syndicated retail tracking service that enables manufacturers and retailers to acquire industry insights used to make better business decisions. InfoScan Census utilizes the data that IRI collects from grocery, drug, and mass merchandise retailers to provide the most comprehensive and accurate syndicated data offering in the Fast Moving Consumer Goods (FMCG) sector. With access to accurate, granular detail by category, geography, measure, and time period, clients have the tools needed to develop marketing and sales strategies based on product performance, distribution, and promotion responsiveness. All data about frozen foods are coming from InfoScan Census. IRI Consulting provide strategic insights and advice leveraging a variety of data sources, predictive analytics, enabling technologies, and business analyses to help CPG manufacturers and retailers address significant sales and marketing issues effectively About IRI IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and over-the-counter healthcare industries by pinpointing what matters and illuminating how it can impact their businesses across sales and marketing. Move your business forward at IRIworldwide.eu Contact: IRI, EU.Marketing@IRIworldwide.com, Tel: +33 1 30 06 23 62 Copyright 2013 Information Resources Inc, All rights reserved. 20