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Snacking beyond the snacking aisle

Snacking beyond the snacking aisle. how to take a bite out of Canada’s snacking demand. Carman Allison - VP Consumer Insights, Nielsen. @CarmAllison. Meet your presenter. Carman Allison VP Consumer Insights Nielsen. JOIN TODAY’S CONVERSATION. @Nielsen @CarmAllison.

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Snacking beyond the snacking aisle

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  1. Snacking beyond the snacking aisle how to take a bite out of Canada’s snacking demand Carman Allison - VP Consumer Insights, Nielsen @CarmAllison

  2. Meet your presenter Carman Allison VP Consumer Insights Nielsen

  3. JOIN TODAY’S CONVERSATION @Nielsen @CarmAllison

  4. The Challenge for growth

  5. Let’s set the stage Canadian CPG Dollar Sales Unit Sales Trips per Shopper Source: Nielsen MarketTrack, National All Channels – YTD 40 weeks to September 20, 2014 - Total Tracked Sales excluding Fresh Random Weight Homescan Grocery Composite 52 weeks ending September 27, 2014

  6. How do we define Snacks today? $4.9 Billion +4%Dollar growth SNACKS +2% KG growth Source: Nielsen MarketTrack, National All Channels + G&G – 52 weeks Ending October 18 2014

  7. lifestyles are redefining HOW WE EAT ON THE GO PORTABILITY HEALTH CONVENIENCE EASE OF USE VARIETY

  8. “ The average consumer enjoys 12different types of snacks in a 30-day period ” …out of the 47 snacks surveyed Source: Nielsen Global Survey – Canada Q1 2014

  9. RETHINKING WHAT “snackING” MEANS SNACKING… …REDEFINED Source: Nielsen Global Survey – Q1 2014

  10. If we expand snack to reflect ‘snacking’ the market potential increases 2.5 times Traditional Snack Definition Potential Opportunity $12.6 Billion +3% $4.9 2.5 x Billion +4% Source: Nielsen MarketTrack, National All Channels + C&G - 52 week periods ending September 20, 2014

  11. Audience Poll Which is your favourite type of snack? Sweet Tooth Salty Please Either works for me!

  12. While the majority have a preference, 1 in 5 consumers prefers either 60% SWEET 19% 59% SALTY Source: Nielsen Global Survey – Q1 2014

  13. Opportunities across the snacking spectrum Source: Nielsen MarketTrack, National All Channels + C&G - 52 week periods ending September 20, 2014

  14. What’s trending in snacking? TOP - GROWTH % CHG Candied Snacks +31% TOP 5 SNACKING CATEGORIES ($M) Meat Sticks +16% +7% Fruit & Nuts Potato Chips, Corn Snacks $1,836.1 +5% Dry Fruit +6% Chips, Corn Snacks Prepack Cheese $1,782.8 +3% +5% Chocolate $1,580.1 +5% BOTTOM - GROWTH % CHG -9% Frz Water Confect Yogurt $1,492.7 +0% -7% Puffed Cakes RTE Gelatin -6% Baked Desserts $822.5 +1% Puddings -4% Marsh. Treats -4% Source: Nielsen MarketTrack, National All Channels +C&G – 52 weeks Ending September 20, 2014

  15. What do consumers have to say about snacking? Global: 60 Countries (30,535 individuals) Canada: 503 individuals

  16. North Americans are chip-o-holics! Top 5 snacks consumed #1 64% Chips 63% Chips 64%Chocolate 63% Fruit 59% Chocolate 62%Fruit 63% Cheese 58% Cheese 52%Vegetables 63% Chocolate 56% Cookies 51%Cookies 58% Cookies 54% Fruit 50%Yogurt Source: Nielsen Global Survey – Q1 2014

  17. chips, chocolate and fruit top the list for Canada's favourite snack Top 5 favourite snacks #1 13% Chips 11% Chocolate 11%Fruit 13% Chocolate 11% Fruit 11%Chocolate 13% Fruit 9% Chips 9%Bread (Sandwich) 8% Cheese 7% Sandwich 7% Yogurt 7% Bread (Sandwich) 7% Cheese 7%Cheese Source: Nielsen Global Survey – Q1 2014

  18. Grocery stores remain the top destination for snack purchases % who source their snacks sometimes or often 93% 56% 45% 44% 43% $1 MASS MERCH GROCERY STORES MASS MERCH DOLLAR STORES CONVENIENCE DRUG STORES Source: Nielsen Global Survey – Q1 2014 – Canada

  19. But despite the top destination for snack sales – grocery is losing share Source: Nielsen Homescan Channel Facts - 52 Weeks Ending September 27, 2014 – Snack + Confections

  20. Consumers who are fighting temptation may be giving in to promotions 41% of SNACKS are sold with a price cut 48% Only buy snacks when on sale +4 +3 36% of CPG sales sold with a price cut 5% higher than average Source: Nielsen Global Survey – Q1 2014 Nielsen MarketTrack, National GB+MM+DG - 52 week periods ending October 18, 2014

  21. Why do Canadians snack? 62% 86% 79% 81% 78% HUNGER BETWEEN MEALS ENJOYMENT CRAVING TREAT NUTRITION Source: Nielsen Global Survey – Q1 2014

  22. 4 out of 10 Canadians snack as a meal REPLACEMENT Breakfast Alternative 42% Lunch Alternative 43% Dinner Alternative 34% Source: Nielsen Global Survey – Q1 2014

  23. Snacking as a meal alternative <35 Breakfast Alternative 44% 48% 48% 42% Lunch Alternative 44% 47% 54% 43% Dinner Alternative 38% 46% 50% 34% <$30K Source: Nielsen Global Survey – Q1 2014

  24. “ Even though we love our chips, we also snack with sensible, balanced indulgence,and healthier alternatives ”

  25. Snacking with a conscience 63% 54% Fruit 50% 43% Nuts & Seeds 50% 43% Vegetables 51% 38% Yogurt 42% 35% Granola Bars Source: Nielsen Global Survey – Q1 2014

  26. Back-to-basics attributes % who think it is important or very important NATURAL FLAVOURS (65%) NO ARTIFICIAL COLOURS (60%) NO ARTIFICIAL FLAVOURS (60%) ALL NATURAL (60%) GMO FREE (56%) CAFFEINE FREE (36%) GLUTEN FREE (28%) Source: Nielsen Global Survey – Q1 2014 - Canada

  27. Health attributes are important to consumers % who think it is important or very important LOW SALT/SODIUM (63%) LESS IS MORE HIGH IN FIBRE (65%) + LOW SUGAR/SUGAR FREE (61%) MORE IS MORE WHOLE GRAIN (61%) NO HIGH FRUCTOSE CORN SYRUP (59%) HIGH IN PROTEIN (61%) PORTION CONTROL (58%) LOW CALORIES (53%) LOW FAT (52%) LOW/NO CARBS (50%) Source: Nielsen Global Survey – Q1 2014 - Canada

  28. MORE THAN 1/3 want their snack ingredients to be local, organic and sourced sustainably 38% 44% 41% SUSTAINABLY SOURCED LOCAL ORGANIC Source: Nielsen Global Survey – Q1 2014 – Canada

  29. Different snacks for different folks

  30. Are generations divided by snacking?

  31. The CPG growth engine will switch gears By 2020… MILLENNIALS BOOMERS +$12.5 B +107% -$4.3 B -9% Source: Nielsen Homescan 52 weeks to March 29, 2014 – HH <35 years – Based on older generation spend

  32. Which CPG departments are most commonly found in a millennial’s shopping basket? Nielsen Homescan – Dollar Consumption Index – 52 wks to December 28, 2013 – Consumer Facts CPG Departments Relative Index (82 for total)

  33. TOP 5 SNACKS consumed YOUNGER Vs. OLDER 65% Chocolate 70% Fruit 61% Chips 67% Cheese 59% Cookies 58% Chips 56% Bread 55% Nuts & Seeds 54% Cheese 55% Cookies Source: Nielsen Global Survey – Q1 2014 – Canada – Younger = 35 years, Older >55 years

  34. Top 5 favourite snacks YOUNGER Vs. OLDER 14% Chips 13% Yogurt 13% Fruit 11% Fruit 13% Chocolate 10% Cheese 7% Bread (Sandwich) 9% Chips 7% Cheese 9% Nuts & Seeds Source: Nielsen Global Survey – Q1 2014 – Canada – Younger = 35 years, Older >55 years

  35. Differences across generations YOUNGER OLDER Snack as a Reward/ Mood Booster (vs. 28% Older) Snack as a Meal Replacement (vs. 29% Older) Prefer Back-to-Basics snacking (vs. 47% Younger) Tend to snack for nutrition (vs. 62% Younger) 58% 47% 52% 66% Source: Nielsen Global Survey – Q1 2014 – Canada – Younger = 35 years, Older >55 years

  36. Chick-flick versus action movie? What’s your snack of choice?

  37. Male shoppers are often overlooked but account for 24% of primary shoppers % of Households (>50% of Shopping) 24% 16% 60% 22% are female-only households 17% are male-only households Source: Nielsen Panelviews June 2014

  38. Ensure it’s easy for males to find what they need Avg Trips / Year Avg Basket Size Shopping Opinions % Agree I tend to buy only what I need when I go to the grocery store $32.41 161 43% 54% $37.72 Given the opportunity, I like spending time browsing in the grocery or food store 152 50% 60% Source: Nielsen Homescan, National All Channels, Total Expenditures, 52 Weeks ending July 26, 2014; Nielsen Panelviews June 2014

  39. Audience Poll – for females Which do you think malessnack on the most? Chips Cookies Fruit Chocolate Cheese

  40. Audience Poll – for Males Which do you think femalessnack on the most? Chips Cookies Fruit Chocolate Cheese

  41. Females snack more than males Top 5 snacks consumed 65% Chips 72% Fruit 61% Chocolate 69% Cheese 57% Cookies 65% Chocolate 57% Sandwich 64% Chips 56% Cheese 59% Cookies Source: Nielsen Global Survey – Q1 2014 - Canada

  42. males prefer salty and females sweet Top 5 favourite snacks 15% Chips 15% Fruit 11% Fruit 15% Chocolate 10% Chocolate 11% Chips 9% Cheese 7% Cheese 8% Sandwich 7% Yogurt Source: Nielsen Global Survey – Q1 2014 - Canada

  43. Different snacking motivators Prefer hot/spicy flavours (vs. 33% Female) Only buy snacks when on sale (vs. 52% Female) Snack as a stress reliever (vs. 32% Male) “Less is more” when it comes to Snacking (vs. 51% Male) 43% 43% 61% 43% Source: Nielsen Global Survey – Q1 2014 - Canada

  44. LONG TERM OUTLOOK POSITIVE GENERATIONAL SHIFTS Millennials - Indulgence Boomers - Health CONSUMER DEMANDS Variety Innovation Accessibility Portability Less is More Meal Replacement Growth from perimeter and centre of store

  45. Canadians are changing the way we eat “ Busy, on-the-go lifestyles often dictate a need for quick meals, and many opt for fast food options that can be high in calories and low in health benefits. There is a massive untapped opportunity to gain market share in the nutritious, portable and easy-to-eatmeal alternative market that snack manufacturers could fill. ” Susan Dunn, EVP, Global Professional Services, Nielsen

  46. Questions? Stay Connected to Consumer and Media Trends For the latest insights, visit us at nielsen.com or contact us: Phone: 800.553.3727 Email: CPGSolutions@nielsen.com LinkedIn Questions regarding the content of this presentation, contact: Carman Allison, email carman.allison@nielsen.com @CarmAllison You will receive a link to download this webinar within 48 hours

  47. Snacking segment definitions Frozen Ice Cream Frozen Confections Pizza Snacks Frozen Yogurt Water Based Confect. Refrigerated Natural Cheese Yogurt Desserts Baked Desserts Jelly Powders Puddings Dessert Powders Snack Puddings RTE Gelatin Cookies & Crackers Cookies Crackers Cookie Mixes Confectionery Chocolate Candy Confections NPF Nutritious Portable Foods Remaining Popping Corn Puffed Cakes Candied Snacks Marshmallow Treats Fruit & Nuts Snacking Nuts/Seeds Fruit & Apple Sauce Dry Fruit Salty Snack Meat Sticks Jerky Snack Foods Dips Salsa Mexican Dips Prepared Dips Source: Nielsen Strategic Planner

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