U.S. Consumer Trends - Apple Processors | Welcome to the APA | US

U.S. Consumer Trends

APA

2011 ANNUAL MEETING

Version 19

2

Copyright © 2011 The Nielsen Company. Confidential and proprietary.

U.S. Consumer Trends U.S. Consumer Trends

• Consumer trends

• Health & Wellness

• Sustainability

• Summary & closing thoughts

Today’s agenda

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Declining

% of HHs with

Children

Immigration

& Growth in

Ethnic Families

Older

Consumers with

New Needs

Key 21st Century Macro Trends

Income Declines

& Concentration

Slowing

Population

Growth

Rising Rate of

Obesity & Cost of

Healthcare

4



Very diverse consumer segments… - Multicultural

- Aging

- Economically distressed

…and a shrinking pie

A challenging future between…

5



$30

$35

$40

$45

$50

$55

Greatest Gen Boomers Gen X Millennials

100

125

150

175


$5,500

$6,000

$6,500

$7,000

$7,500

Greatest Gen Boomers Gen X Millennials20%

22%

24%

26%

28%


Shopping Trips Per Household Basket Ring Dollars Per Trip

Basket Ring Dollars Per Household % Dollars on Deal

Total Retail Channels

Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994

Older segments are more frequent shoppers & more deal prone

Source: Homescan®, a service of The Nielsen Company;

Total U.S. 52 weeks ending 12/25/2010;

excludes gas on or Rx only trips

6



Big differences in category spend – some driven by diverse households, other by diverse preferences

Annual $ Per Hhld* Greatest Gen Boomers Gen X Millennials

Baby Food 44 48 124 168

Carbonated Beverages 90 133 131 111

Cereal 62 69 89 82

Detergents 44 53 57 46

Hair Care 28 40 46 36

Ice Cream 37 37 33 28

Pet Food 203 216 157 119

Vitamins 111 90 66 57

Wine 121 124 81 62

Where is your category or brand driving sales?



UPC-coded items only

Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994

*Among category buyers

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Retailers are focused on Seniors

Kroger: Seniors receive a 10%

discount OFF of your total purchases

on the first Wednesday of every month.

All Seniors, 60 years and older are

eligible! (southern Illinois, southern

Indiana, select KY & Nashville, TN

area stores Only!)

If you're 55+, you can save an additional 10% on your food bill (less V.I.P savings, taxes, and coupons) the first Wednesday of every month.

Rite-Aid offers 20% off your purchases the first Tuesday of the month, plus all your favorite benefits, including:

10% off your purchase all other Tuesdays 10% off Rite Aid Brand products every day 10% off cash prescriptions every day

Enrollment in Living More is free and easy

Source: Company websites

http://www.shopko.com/Index.aspx

8



AARP redefining its audience

• “Today AARP sends AARP The

Magazine to all members, but

sends slightly different versions to

those 50 to 59, 60 to 69, and over

70.”

• The covers are the same, but…

“The illustration for older readers

features a man who is bald rather

than graying, a woman wearing a

long skirt rather than jeans and,

resting between them, a cane.”

Source: The New York Times & AARP

http://www.magazine-covers.net/t2384/valerie-bertinelli-magazine-covers.html

9



Portion sizes for one or two, but what else?

Source: MultiAd Kwikee

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How is your organization preparing for change?

Total White

Non-Hispanic Black Asian* Hispanic

+42% +1%

+56%

Projected Population Growth From 2010 to 2050

+142% +167%

*Excludes American Indian, Alaska Native, Hawaiian & Other Pacific Islander Source: U.S. Census Bureau Population Projections

Source: U.S. Census Bureau Population Projections

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Marketers must recognize diversity of ethnic communities

Puerto

Rican

9.0%

Cuban

3.4%

Dominican

2.8%

Central

American

8.3%

South

American

5.8%

Other

5.1%

Mexican

66%

Asian

Indian

18.6%

Filipino

18.1%

Vietnamese

10.7%

Korean

10.0%

Japanese

5.3%

Other

14.4% Chinese

23%

What Percent of Hispanic

Americans Have Mexican Ancestry? What Percent of Asian Americans

Have Chinese Ancestry?

Source: U.S. Census 2008 American Community Survey

12



And local view essential to identify multicultural opportunities

Jackson, MS 48% Black

Laredo 94% Hispanic

San Francisco 22% Asian

Alpena, MI 97% White,

Non-Hispanic

Miami 46% Hispanic

Los Angeles 44% Hispanic

19% Black

12% Asian

El Paso 89% Hispanic

New York 21% Hispanic

Source: Nielsen Spectra & Nielsen Media

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Volumetric opportunities from ethnic; margin opportunities from white

66%56% 60% 60%

68%79%

15%22% 18% 19%

13%

7%13% 16% 17% 14% 12% 9%5% 5% 5% 6% 5% 4%

Total Under 12 12-17 18-34 35-54 55+

White Non-Hispanic Hispanic

Black/African American Asian

Population Age By Ethnicity

Younger/Future Consumers

Are More Diverse

Source: U.S. Census

14



Universal appeal for Facebook, while other sites provide opportunities for targeting

Source: Nielsen NetView, February 2011

Hispanic 154 67 112 100 106

White 93 106 98 101 94

African American 116 69 104 96 130

Asian 83 147 118 99 126

Other 154 63 110 100 103Composition Index by Unique Audience Under-index

Standard

Over-index

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Big differences in edible category spend – driven by diverse households or by diverse preferences?

Annual $ Per Buying

Household

White Non-

Hispanic

Hispanic

(any race)

Asian African

American

Pet Food 199 154 144 104

Beer 136 129 74 138

Wine 117 79 71 58

Fresh Produce 101 98 124 69

Baby Food 91 131 140 132

Candy 84 62 65 57

Juices/Drinks – Shelf Stable 59 81 68 79

Yogurt 47 49 45 33




UPC-coded items only

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Hispanic households spend more on basic food ingredients Hispanic Nielsen Edible Category Dollar Index

Dried Vegetables & Grains 235

Baby Food 195

Shortening Oil 161

Eggs 139

Prepared Foods – Dry Mix 136

Canned Milk & Creamers 135

Shelf-Stable Juices & Drinks 134

Flour 133

Non-Carbonated Soft Drinks 129

Seasonings & Spices 127

Purchase index:

share of Hispanic $

sales divided by U.S.

household $ share

X 100

Source: Nielsen Homescan,

52 Weeks Ending 12/25/2010

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Ethnic diversity impacting general population


18



•Convenient

consumer

solutions

19



Winning & experimenting with technology

Source: Company websites; Progressive Grocer,

Pittsburgh Post-Gazette & CincySavers.com

20



“The technology in the app puts you in control of the shopping experience"

Source: Stop & Shop; Brittany Sauser (in-store photo); Quote by John Caron, Modiv Media's senior vice president of marketing

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E-Commerce sales have been steadily gaining share for a decade

Source: U.S. Census Bureau

22



Competition from companies who know how to sell online


23



Grocery delivery services gaining momentum


24



iPhone applications to simplify lives & make smarter shoppers

Source: Apple

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Peapod launches smartphone app

Source: PRNewsire & appstorehq.com

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Shoppers now can locate more than 100,000 items in Meijer Supercenters

Source: Meijer

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Convenient solutions for breakfast


28



Lunchtime convenient solutions


29



Convenient solutions for dinner


30



Convenience foods steam up!


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Pre-measured


32



More than one brand or product in a box


33



“On-the-go” & “travel packs”


34



•Health &

wellness

35


U.S. Consumer Trends U.S. Consumer Trends U.S. Consumer Trends

Healthy label claims: Sales range from $50 million for

plant sterol claims to $47 billion for fat claims

Source: Nielsen Scantrack & Nielsen LabelTrends Total U.S - Food/Drug/Mass Stores (excl. Walmart)

Label Claims Dollar Sales

$0

$3

$6

$9

$12

$15

$18

$21

$24

$27

$30

$33

$36

$39

$42

$45

$48

52 Weeks Ending 04/16/2011

Bil

lio

ns

Fat Presence Natural Calorie Presence

Vitamin/Mineral Presence Preservative Presence Salt or Sodium Presence

Sweetener Presence Grain Type Cholesterol Presence

Calcium Presence Caffeine Presence Gluten Free

Organic Fiber Presence Fruit and Veg Presence

Protein Presence Omega Presence Lactose Free/Reduced

Hormone Antibiotic Free Antioxidants High Fructose Corn Syrup Free

Multigrain CARB Conscious No MSG

Soy Probiotic Iron Presence

GMO Free Calorie 100 Fortified

Oil Presence Stevia Flax or Hemp

Low Glycemic Plant Sterol

36



-5

0

5

10

15

20

25

30

35

05/19/07

08/11/07

11/03/07

01/26/08

04/19/08

07/12/08

10/04/08

12/27/08

03/21/09

06/13/09

09/05/09

11/28/09

02/20/10

05/15/10

08/07/10

10/30/10

01/22/11

04/16/11

Organic Labels All Nielsen Measured Categories FDMxWM

Organics’ growth returned in ’09 & ’10, but rising

gas & produce prices slowing growth in ’11

% Change in Dollar Sales

Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 4-Week Increments vs Year Ago

37



2.11.91.7

1.41.11.01.00.90.8

0.0-0.6

-1.3-2.5-2.5-2.6-2.7

-4.6-4.9

-6.0-14.1

Sterol

Probiotic

Flax Or Hemp

Cholesterol Presence

Calorie Presence

Fat Presence

Multigrain

Soy

Preservative Presence

Caffeine Presence

Fiber Presence

Fortified

Sweetener Presence

Grain Type

CARB Conscious

Calorie 100

Vitamin Mineral Presence

Salt Or Sodium Presence

Iron Presence

Calcium Presence

List of struggling label claims shrinking

Unit Percent Change vs Year Ago

Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 13-Wks Ending 04/16/2011 vs Year Ago

38



4.0

4.4

7.6

8.4

8.5

8.7

9.5

11.5

12.4

12.9

13.9

14.4

22.7

38.1

47.8Stevia

Low Glycemic

GMO Free

Omega Presence

High Fructose Corn Syrup Free

Hormone Antibiotic Free

Gluten Free

No MSG

Natural

Protein Presence

Fruit and Veg Presence

Organic

Lactose Presence

Oil Presence

Antioxidants

Expanding list of winning label claims

Source: Nielsen Scantrack & Nielsen LabelTrends, Total U.S. Food/Drug/Mass Stores (excl. Walmart); 13-Wks Ending 04/16/2011 vs Year Ago

Unit Percent Change vs Year Ago

39



1

NMI Health & Wellness Segmentation Model

40



Healthier segments more frequent shoppers & bigger annual spenders; slightly more deal prone

0

10

20

30

Well Beings Food

Actives

Magic

Bullets

Fence

Sitters

Eat, Drink &

Be Merrys

0

40

80

120

160

200

Well Beings Food

Actives

Magic

Bullets

Fence

Sitters

Eat, Drink &

Be Merrys

0

10

20

30

40

50

Well Beings Food

Actives

Magic

Bullets

Fence

Sitters

Eat, Drink &

Be Merrys

Shopping Trips Per Household Basket Ring Dollars Per Trip

Basket Ring Dollars Per Household % Dollars on Deal

Total Retail Channels

0

2,000

4,000

6,000

8,000

Well

Beings

Food

Actives

Magic

Bullets

Fence

Sitters

Eat, Drink

& Be

Merrys


Total U.S. 52 weeks ending 8/07/2010; excludes gas on or Rx only trips

41



Big differences in annual category spend across health & wellness segments

Annual $ Per Household

Among Category Buyers

Well

Beings

Food

Actives

Magic

Bullets

Fence

Sitters

E, D & B

Merrys

Nuts 43 40 34 31 28

Wine 152 119 103 88 93

Yogurt 55 48 41 45 36

Fresh Produce 132 104 92 89 82

Pain Remedies 22 23 26 21 22

Carbonated Beverages 100 121 133 125 155

Beer 117 116 143 124 153

Frozen Pizza & Snacks 49 54 55 61 60

Tobacco & Accessories 243 217 356 276 350


Total U.S. 52 weeks ending 8/07/2010 – upc-coded products


42



And spending similarities in other categories – indulgence matters too or need for further drill downs?

Annual $ Per Household

Among Category Buyers

Well

Beings

Food

Actives

Magic

Bullets

Fence

Sitters

E, D & B

Merrys

Cereal 79 82 72 80 75

Cookies 38 38 39 40 40

Crackers 35 33 31 32 31

Candy 35 33 31 32 31

Ice Cream 75 85 86 82 80


Total U.S. 52 weeks ending 8/07/2010 – upc-coded products


43



USDA proposing healthier standards for federally subsidized school lunches

Source: Associated Press & USDA

The new USDA guidelines would:

• Establish the first calorie limits in school meals

• Gradually reduce the amount of sodium in the meals over 10

years, with the eventual goal of reducing sodium by more than half

• Ban most trans fats

• Require more servings of fruits and vegetables

• Require all milk served to be low fat or nonfat, and require all

flavored milks to be nonfat

• Incrementally increase the amount of whole grains required,

eventually requiring all grains to be whole grains

• Improve school breakfasts by requiring schools to serve a grain

and a protein, instead of one or the other

44


“National family-centered campaign to Curb obesity”

• Energy Balance: Calories in,

calories out. It’s that simple.”

• First-of-its kind coalition that

brings together more than 160

retailers, food & beverage

manufacturers, restaurants,

sporting goods & insurance

companies, trade associations &

non-governmental organizations

(NGOs), & professional sports

organizations.

Source: TogetherCounts.com

http://www.togethercounts.com/home

http://www.healthyweightcommit.org/

45



Grocers stressing health & wellness solutions in store layout, assortment, labels & advertising


46



Bloomberg’s national salt reduction initiative

Source: LogoBase Library; MultiAd Kwikee; manufacturer websites

http://www.mccain.com/

47



Healthy weight commitment foundation to

reduce 1.5 trillion calories by end of 2015

http://www.healthyweightcommit.org/node/70/thickbox?TB_iframe=true&height=575&width=575





























http://www.healthyweightcommit.org/


http://www.generalmills.com/corporate/index.aspx

48



“Better for you” items


49


U.S. Consumer Trends U.S. Consumer Trends Source: MultiAd Kwikee

“Better for you” items

50



Indulgent products can still be winners


51



Live happy & healthy: scrumptious fruity desserts under 200 calories

Source: Kraft Foods

52



•Sustainability

53



Sustainability in corporate messaging


54



Strong sustainability messaging

Source: The Coca-Cola Company

55



“Green products to be focus of P&G push”

Source: P&G

56



Kroger cutting store energy consumption & letting shoppers know

Source: Kroger

http://www.google.com/imgres?imgurl=http://www.wgbh.org/imageassets/leed_cert.jpg&imgrefurl=http://www.wgbh.org/about/going_green.cfm&usg=__X38hHtawwL3Axe7TtGHX_DGXwsA=&h=1800&w=1800&sz=371&hl=en&start=40&um=1&itbs=1&tbnid=sbI88zLO04RtCM:&tbnh=150&tbnw=150&prev=/images?q=U+S+green+building+council+LEED+Certified&start=21&um=1&hl=en&safe=off&sa=N&rls=com.microsoft:en-us:IE-SearchBox&rlz=1I7ADBS&ndsp=21&tbs=isch:1

57



Safeway takes their store brand natural household cleaning line on the road

Source: Safeway

58


Processed Apple Products Snapshot

• Includes juice and shelf stable packaged in Food/Drug

and Mass retailers

Over a billion dollars in sales annually

–Trending data indicates a slowing decline of dollars for the latest

52 weeks ( -4%), 24 weeks ( -1%),12 weeks ( -0.5%) ending June

11, 2011

–However unit volume 52 weeks ( -5%), 24 weeks (-7.5%), 12

weeks ( -9.5%)

–This indicating that rising prices are making up the dollars but

consumers are buying less

59



Summary

& closing

thoughts

60



Consumers share enduring themes

• Health & wellness

• Value

• Convenience

• Comfort & enjoyment

• Green

• Demographics

• Connected

• Global

61



What are you doing to take advantage of these enduring themes?

• How do you innovate &

execute against

opportunities that are

evident to others &

come out ahead?

• How do you identify

opportunities where you

can provide unique

solutions?

Thank You

Henry J Ward [email protected] 203-563-2998

mailto:[email protected]

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