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LOOKING FOR WHITE SPACE Kantar Worldpanel Usage

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WHAT PROPORTION OF NEW PRODUCTS SURVIVE TWO YEARS?

>50% survive 2 years

Average product’s lifespan is

4-5 years

SURVIVAL AND LIFESPAN OF PRODUCTS

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2013 2012 2011 2010 2009

Core

Discontinued

Renovation

Innovation Branded

Grocery

Sales £bn

0

10

20

30

40

50

60

WHY IS INNOVATION IMPORTANT?

£7bn

INNOVATION DRIVES INCREMENTAL GROWTH

© Kantar Worldpanel

Too much choice, too

little choice?

© Kantar Worldpanel

CATEGORY ENHANCING INNOVATIONS SEEK INSPIRATION FROM

WITHOUT NOT WITHIN THE CATEGORY

6

© Kantar Worldpanel

Rational or irrational from 5 to 7,000 lines?

THE RATIONALE FOR ADDITIONAL SKU’S

Frozen 23%

• Frozen ready meals 28%

Fresh/chill 21%

• Chilled processed poultry 38%

• Fresh pasta 28%

• Yoghurt 26%

• Chilled bakery 26%

Ambient grocery 17%

• Confectionery 23%

Alcohol 13%

• Cider 21%

INNOVATION % OF CATEGORY THAT ARE NEW SKU’S OVER PAST YEAR

BEFORE YOU ARE ONE YOU WILL HAVE WORKED YOUR WAY

THROUGH EVERY TOOTHPASTE SKU (EVEN IF YOU DON’T HAVE

TEETH!)

8

9

FIVE YEARS FOR HAIRCARE

7 YEARS TO MUNCH YOUR WAY THROUGH EVERY BREAKFAST

CEREAL SKU

10

12 YEARS FOR CRISPS

11

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

E

n

j

o

y

m

e

n

t

%

Snack % Latest Year Date

NEED

OCCASION

12

30 YEARS FOR BISCUITS

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

E

n

j

o

y

m

e

n

t

%

Snack % Latest Year Date

NEED

OCCASION

© Kantar Worldpanel

MUCH ‘INNOVATION’ THINKS IN STRAIGHT LINES; IS CONFINED BY

WHAT ALREADY EXISTS

CONFECTIONERY

14

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

E

n

j

o

y

m

e

n

t

%

Snack % Latest Year Date

NEED

OCCASION

© Kantar Worldpanel

MUCH INNOVATION…….ISN’T

IT’S MORE OF THE SAME

© Kantar Worldpanel

Too much choice, too

little choice?

Re framing value

© Kantar Worldpanel

CHANGE CONSUMERS PERSPECTIVE

Supermarkets are

all the same

2012

2011

2010

2009

% of consumers

2012 data

No opportunity for true self expression

Supermarkets migrate to the middle ground - UK politics repeating itself?

THE RETAILER NEED TO CHANGE TO CREATE A POINT OF DIFFERENCE

28 29 30 31 32 33 34 35

© Kantar Worldpanel

RE FRAMING VALUE

OBM (MEAL DEALS) – BIG & GETTING BIGGER

£360 million +40% year on year

19

Ranked

73/289

categories by

size

OBM fastest

growing

significant

retailer category

Tea/Evening Meal

£1.76

© Kantar Worldpanel

20

© Kantar Worldpanel

RE-FRAMING VALUE

© Kantar Worldpanel

RE-FRAMING VALUE

22

© Kantar Worldpanel

© Kantar Worldpanel

Too much choice, too

little choice?

Inspiration from the

kitchen

Re framing value

© Kantar Worldpanel

© Kantar Worldpanel

© Kantar Worldpanel

© Kantar Worldpanel

29

© Kantar Worldpanel

MARKETING TO THE INDIVIDUAL –

CATERING FOR ME

1 person 44%

2 people 35%

3 people 11%

4+ people 10%

© Kantar Worldpanel

WorldpanelUsage 30

Price

matters

especially

when it

comes to

kids – kids

over index

for Value

PL by a

quarter

+24%

© Kantar Worldpanel

WorldpanelUsage 31

56%

More than

half of kids

branded

foods are not

eaten by kids

© Kantar Worldpanel

WorldpanelUsage 32

+20%

Men are 20%

more valuable

than women

(on average 20%

bigger portion sizes)

© Kantar Worldpanel

A LONG TERM MOVE AWAY FROM HANDS ON TO HAND OFF –

FROM MADE TO CHOSEN

High Involvement

Low involvement

33

© Kantar Worldpanel

WorldpanelUsage

HELP CREATE THE MEAL FOR CONSUMERS

© Kantar Worldpanel

A LONG TERM MOVE AWAY FROM PROTEIN CENTRED TO DISH

CENTRED EATING

Meat and two vegetables

Dish based cuisine

35

© Kantar Worldpanel

MOVE FROM SELLING INGREDIENTS TO SELLING DISHES – OR

MEAL SOLUTIONS

36

Dish maker

=

high value

Ingredient

=

lower value

© Kantar Worldpanel

LESS AND LESS TIME IN THE KITCHEN

TIME TAKEN TO PREPARE & COOK THE MAIN MEAL

1980 60 minutes

1990 45 minutes

2013 32 minutes

37

© Kantar Worldpanel

A global brand MY way

© Kantar Worldpanel

Too much choice, too

little choice?

Inspiration from the

kitchen

Inspiration from the

population

Re framing value

© Kantar Worldpanel

13%

Born abroad

25%

Obese

25%

Obese

13%

Born abroad

7%

Aged 20-25

4%

Vegetarian

6%

Diabetic

43% regularly eat

their evening

meal in front of

the TV

More over

65’s than

under 16’s

for the first

time EVER

25%

Aged 20-

34 (3m)

live with

parents

5m single

person

household

s with

child(ren)

11m with

false teeth

8% kids

have a

serious food

allergy (2%

all adults)

4m work

from home

+24% in a

decade

50% of our awake

time on computers/

mobiles/watching

TV

Average

age of

having first

child now

30

© Kantar Worldpanel

INSPIRATION FOR INNOVATION

© Kantar Worldpanel

Too much choice, too

little choice?

Inspiration from the

kitchen

Meeting needs

Inspiration from the

population

Re framing value

© Kantar Worldpanel

CONSUMER BASED NEEDS

44

© Kantar Worldpanel

15 year trend

CONSUMERS INTEREST IN HEALTH SOARS….

Source: Kantar Worldpanel Usage, 12 m/e May 2010, Total Consumption

© Kantar Worldpanel

OCCASION BASED NEEDS

© Kantar Worldpanel

WorldpanelUsage

114

1,461

208

1,859

6,289

197

1,891

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

RomanticMeal in

Treat Couple eveml - HH with

kids

Family nightin

TogetherTime

Special Social

occs

Kantar Worldpanel Usage

In Home & Carried Out Consumption

52 w/e Oct 2013

‘EVERYDAY EVENTS’ – TREATS, SOCIAL EVENTS AND BIG NIGHTS IN

OFFER YEAR ROUND OPPORTUNITIES

© Kantar Worldpanel

Too much choice, too

little choice?

Inspiration from the

kitchen

Meeting needs

Inspiration from the

population

Re framing value

Driving whole store

value

© Kantar Worldpanel

49

Categories are expandable

but ……………

© Kantar Worldpanel

WorldpanelUsage

DRIVING INCREMENTALITY OF CONSUMPTION

50

© Kantar Worldpanel

WorldpanelUsage

DRIVING BASKET VALUE

23% sweet pies feature custard or cream

5% tea with biscuits (but 33% of biscuits with tea)

1% wine with olives

38% chilled burgers with table sauce/relish

26% frozen pizza with frozen potato products

3% curry with poppadums' 16% with naan

51

© Kantar Worldpanel

SAINSBURYS MISSED OPPORTUNITY WITH SOFT FRUIT – ONLY

72% OF SAINSBURYS SOURCED SOFT FRUIT FEATURES

SAINSBURYS SOURCED CREAM

77

89

72

53

0

10

20

30

40

50

60

70

80

90

100

Tesco Soft Fruit Asda Soft Fruit Sainsburys SoftFruit

Morrisons SoftFruit

52

% OF SOFT FRUIT CONSUMED WITH SAME RETAILER SOURCED CREAM

© Kantar Worldpanel

© Kantar Worldpanel

WorldpanelUsage

© Kantar Worldpanel

Too much choice, too

little choice?

Inspiration from the

kitchen

Meeting needs

Inspiration from the

population

Re framing value

Driving whole store

value

© Kantar Worldpanel

WorldpanelUsage © Kantar Worldpanel

Giles Quick

Telephone: +44 (0) 1372 825764

Giles.Quick@kantarworldpanel.com

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