SHOPPERS . . . What are THEY thinking and are YOU ready?

1. SHOPPERS . . . What are THEY thinking and are YOU ready? DeCA/ALA WW Partnership Summit June 8-9, 2010

2. Shopper Insights - Focus • Macro Culinary Trends • Fresh/Less Processed • Home and Comfort • Globalized Food Preferences • Reimagined Food Experiences • Green Consumption • Healthy Eating • The Path to Purchase • Planning • Trip Decision • Purchases • Product Usage

3. Shopper Insights Breakout- Your Role • Open mind . . . expand your thoughts • Sharing of ideas of what you are doing. • Sharing of ideas of what could be done to capitalize on these insights. DeCA HQs DeCA WEST DeCA EAST Brainstorm Ideas! Industry, Distributors, Media DeCA EUROPE Brainstorm ideas will be published and shared as a meeting follow up.

4. MACRO CULINARY TRENDS

5. Fresh/Less Processed: Cultural • The FARM principles still apply with both health and quality being the drivers % Associating Attribute with High Quality or Healthy Items Used to Judge Healthfulness of Food Source: THG Healthy Eating Trends 2009 survey; N=1501

6. Fresh/Less Processed: Culinary Continued success of certain away-from-home brands like Panera that position themselves as fresh/less processed. Menu descriptors at innovators have begun building more romantic descriptors that tell a narrative. New casual concepts like Paul Kahan’s and Chris Pandel’s keep menus and cooking simple, local and communicate the freshness of their ingredients.

7. Home and Comfort: Cultural • Driven by recession • Consumers rediscover the joys of home cooking • Comfort foods continue to shine • Comfort food NOW… • Idealized heritage, Americana • Grandma’s recipes updated with a twist • Element of personalization • Sense of time and place • Indulgent yet nutritious • Real foods with high satiety value • NOT artificial/fake ingredients • NOT highly processed imagery • NOT a guilty pleasure

8. Home and Comfort: 4-Year Trends on the Classics

9. Globalized Food Preferences: Cultural • Consumers are seeking new food experiences and global / ethnic flavor profiles • Both Boomers (via travel) and Millennials (via their rapidly evolving taste preferences) are moving this trend forward  • Regional flavors from America’s past play a role as well • Food TV

10. Globalized Food Preferences: Culinary Holistic Trends study clearly indicates opportunity in many ethnic-based spices and flavorings Five Spice Jerk Chutney Chipotle Common global street food offerings Korean tacos Thai noodles Cuban coffee Carolina BBQ Pho Armenian food (kebabs)

11. Globalized Food Preferences: Culinary • Italian, Mediterranean and Mexican are very popular on mainstream menus…but also note the significant influence of Japanese, Spanish, Thai, Indian, and other world flavors 

12. Reimagined: Culinary • Reimagined Home Delivery • Use of community supported agriculture • Reimagined Fruits, Vegetables and Meats • Heirloom fruits & vegetables are no longer exotic but now mainstream in most grocers • Examples include: purple carrots, cara cara navel oranges, heirloom tomatoes, Christmas lima beans • Heritage breed • Examples include: Mangelitsa pork, Jidori chicken, Copper River salmon

13. Reimagined: Culinary • Reimagined Quick Serve Restaurants • Burger Joint: Danny Meyer’s Shake Shack (NY), Red Mill Burgers (Seattle) • Fried Chicken: Dirty Bird (NY), Stroud’s (KC) • Fish & Chips: Assault & Battered (NY) • Donut Plant: Crème Brule • Reimagined Fine Dining • Create food limited only by their own imaginations – food often characterized by whim, irony and playfulness • Examples include Alinea, WD-50, El Bulli, Moto

14. Green Consumerism: Cultural How Was It Grown? When Was It Grown? Where Was It Grown? By Whom? What’s In It?

15. Health and Wellness • “Good health” goes beyond physical condition, as H&W trends show that the mind-body-spirit connection is what most consumers associate with the concept of well-being. • Today’s health & wellness involves: • Wellness aspirations, including weight control, cognitive health and energy, digestive health, defense and immunity, stress and relations, skin health and beauty. • Health enhancers and risk prevention. • Ethical beliefs and preference, including natural, organic and Fair Trade. Sources: Iconoculture Point of View; The Futures Company Global Monitor, Consumer Targeting in Food & Drinks

16. Healthy Eating Health eating is important to the majority of households Importance of Healthy Eating Source: Healthy Eating Trends 2009 survey; N=1501 Question: Thinking about the amount of effort your household devotes to eating healthy, how important would you say healthy eating is in your household?

17. Healthy Eating Items Used to Judge Healthfulness of Food Consumers judge the healthfulness of products through more than just labels Source: Healthy Eating Trends 2009 survey; N=1501 Question: There are many ways to evaluate food and beverages. Which of the following statements describes what you use to judge the healthfulness of products when shopping for food and beverages?

18. Health and Wellness • Most consumers are looking to avoid fats, salt and processed sugars. • Over half of all consumers are avoiding: • Cholesterol, trans fat, animal fat/butter, salt, HFCS • There is still a push for presence of positive. • Consumers are seeking “added values” in their food and drink. • Well over half of consumers say they are trying to get more of many ingredients (e.g., fiber, Vitamin D, calcium, whole grain) regardless of the importance they place on healthy eating. Source: Healthy Eating Trends 2009 Survey

19. When Eating Outside the Home, Focus on Health is Less Important • Consumers have more control over healthy options when they are at home • When dining out focus on social time, enjoyment and indulgence • Consumers say they don’t want to overdo it, but that they allow themselves to order items they will enjoy, even if they are richer or heavier than things they would typically have at home • Like with other indulgences, the goal is to avoid doing it too often or having too much

20. Macro Culinary Food TrendsThought-Starters • Health & wellness • Fresh/less processed offerings • Healthy eating initiatives • Greater at-home opportunities • Make it easy for patrons to get everything they need to prepare meals at home • Help patrons create restaurant-inspired meals at home • Meal Solution Centers / Recipe of the Week Stations • Help patrons make favorite comfort foods at home • ‘Brown bagging’ initiatives • Global food preferences • Help patrons experience new foods and flavors • Increase sampling opportunities

22. The Path to Purchase Food & Beverage

23. Patrons Attitudes are Generally Favorable Towards Grocery Shopping Compared to Total US, Patrons are more likely to indicate they enjoy shopping Source: ACNielsen November 2009 What’s Cooking Survey

24. Understanding the Entire Path-to-Purchase Leads to Successful Shopper Marketing The Path-to-Purchase represents all aspects of how the consumer experiences a product or solution, from initial need state, to the shopping experience, and finally through product usage Source: Cannondale Associates

25. Planning Changes in Shopping Behavior Happen at Various Points in Purchase Process Consumers are reevaluating how they buy, what they buy and where they buy Trip Decision Purchases Usage • Creating a shopping list • Planning weekly meals • Searching for and using more coupons • Shopping closer to home • Consolidating trips • Shopping multiple formats for specific trip missions • Cooking more • Eating more leftovers • Brown bagging • Sticking to list • Use of store flyer and coupons for best deals • Purchasing lower cost alternatives or eliminating

26. Creating a Shopping List is the Most Common Pre-trip Activity Source: TNS Shopper 360; 2009 Survey; Total US

27. Patrons Shopping Strategies Include Lists, Coupons and Store Circulars • Three-fourths of patrons use a shopping list • Two-thirds use coupons • Over half use a store circular Source: ACNielsen November 2009 What’s Cooking Survey

28. The Needs of the Trip Influence Channel Selection Source: TNS Shopper 360; 2009 Survey; Total US

29. Convenience is a Key Driver in Store Selection Source: TNS Shopper 360; 2009 Survey; Total US

30. Patrons Shop Different Stores Based on Their Needs Compared to the Total US, patrons are more likely to indicate they go to the same store all the time Source: ACNielsen November 2009 What’s Cooking Survey

31. Patrons are Making Multiple Trips During the Week to Pick Up Groceries Source: ACNielsen November 2009 What’s Cooking Survey

32. Patrons are More Likely to Browse and Go Up and Down the Aisles Source: ACNielsen November 2009 What’s Cooking Survey

33. Patrons are Likely to Know the Prices of Most of the Items and Notice Price Changes Source: ACNielsen November 2009 What’s Cooking Survey

34. Patrons Have a Broad Definition of What it Means to “Cook” Most patrons associate cooking with taking care of their family Source: ACNielsen November 2009 What’s Cooking Survey

35. Dinner Decisions are Influenced by What is on Hand Compared to the Total US, patrons are more likely to indicate to seek input from others in the household Source: ACNielsen November 2009 What’s Cooking Survey

36. Of the Patrons Who Eat at Home, Two-thirds Indicate Eating Dinner Together Compared to the Total US, patrons are somewhat more likely to eat dinner together Source: ACNielsen November 2009 What’s Cooking Survey

37. Path to Purchase Summary • Patrons attitudes are generally favorable towards grocery shopping. • Compared to US average, patrons are more likely to browse and go up and down the aisles • They are making multiple trips to the grocery store during the week and shop different stores based on their needs. • Patrons are aware of prices for most items and are likely to notice price changes. • Patrons shopping strategies include shopping lists, coupons and store circulars • Dinner is often decided by what’s on hand and will frequently include the entire family. • Most patrons associate cooking with taking care of their family

38. Path to PurchaseThought-Starters • Continue to communicate savings as many patrons are shopping other value channels and are aware of price and price changes. • Improve signage to show savings and improve price awareness. • Build club section outside of regular aisle to stimulate club sales. • Encourage stock-up to ensure patrons have the items they need on hand for every meal occasion. • Leverage existing in-store behavior (browsing and going up and down the aisles) to build the basket. • Help patrons continue to take care of their families and connect over food by offering meal ideas/solutions based on current trends (e.g., fresh/less processed, classic comfort foods, ethnic-inspired dishes, etc.)

39. Path to PurchaseThought-Starters • What patrons consider “cooking”: Set up stations around the store to provide ideas for breakfast areas, salads, meal solutions, trying different types of produce, etc. • Help patrons plan their path to purchase in the commissary • Leverage the online shopping list • Provide links to coupons / circulars • Build database of patrons to send information • Since patrons really enjoy shopping, create a social club sampling event with coffee and cookies, etc. • How can we make shopping more fun in store?

41. The Evolving Shopper / Patron . . . Are YOU Ready? DeCA HQs Share YOUR brainstorm ideas! DeCA WEST DeCA EAST Industry, Distributors, Media DeCA EUROPE Brainstorm ideas will be published and shared as a meeting follow up.