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QUARTER BY
NUMBERS Q3 2018
EUROPE
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CONTENTS –EUROPE WEST
SECTION 1
THE BIG PICTURE: EUROPE WEST Message from Olivier Lamare ………………………………………………………………………..….
EUROPE AT A GLANCE Key economic drivers……………………………………………………………………………………..
Looking through West Europe FMCG Lens………………………………………………………......
COUNTRY SNAPSHOT Austria……….………………………….…………………………………………………………………..
Belgium………………………………………………………………………………………….......……..
Denmark………………………………………………………………………………………..................
Finland………………………………………………………………………………………………….......
France………………………………………………………………………………………………………
Germany……………………………………………………………………………………………………
Ireland…………………………………………………………………………….…………….......….......
Italy……………………………………………………………………………………....……………........
Netherlands………………………………………………………………………………....……………..
Norway………………………………………………………………………………………..………........
Portugal…………………………………………………………………....………………….……….......
Spain……………………………………………………………………………………………..…………
Sweden……………………………………………………………………………………………….........
Switzerland………...………………………………………………………………………………………
United Kingdom…………………………………………………………………………….……………...
IN THE INDUSTRY What’s Hot and What’s Not………………………………………………………………………………
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T 4
E 5
7
T 8
11
14
17
20
23
26
29
32
35
38
41
44
47
50
Y 111
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CONTENTS – EUROPE CENTRAL & EAST
SECTION 2
THE BIG PICTURE: EUROPE CENTRAL & EAST Message from Roberto Pedretti and Daniel Chorbadjian…………………………...........................
EUROPE AT A GLANCE Key economic drivers…………..…………………………………………………….…………..........
Looking through Central & East Europe FMCG Lens…………………………………………….......
COUNTRY SNAPSHOT Belarus……….………………………….………………………………………………………………….
Bulgaria……….………………………………………….…………………….......................................
Croatia……….………………………………………….…………………….......................................
Czech Republic……………………………………………………………………………………………
Estonia…………………………………………………………………………………………....………..
Greece………………………………………………………………………………………………….......
Hungary…………………………………………………………………………………………………….
Kazakhstan…………………………………………………………………………………………...……
Latvia……………………………………………………………………………………....……………….
Lithuania……………………………………………………………………………………………………
Poland………………………………………………………………………………………………………
Romania…………………………………………………………………....………………………………
Russia………………………………………………………………………………………………………
Serbia………………………………………………………………………………………………………
Slovakia…………………………………………………………………………………………………….
Slovenia……………………………………………………………………………………………………
Turkey………………………………………………………………………………………………………
Ukraine……………………………………………………………………………………………………..
IN THE INDUSTRY What’s Hot and What’s Not……………………………………………………………………………..
1
T 53
E 54
56
T 57
60
63
66
69
72
75
78
81
84
87
90
93
96
99
102
105
108
Y
111
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THE BIG PICTURE:
EUROPE WEST
Olivier Lamare
Retail Services
Developed Markets
When reading the following market commentaries you are reminded of just how different
Western European dynamics can be. The range of local variables whether they are
consumer tastes or preferences to the range of economic conditions are challenging to
follow let alone understand. Yet, there are a number of key themes that continue to be
highlighted. The consumer desire for "convenience" is one observed in many markets by
our local teams. In a recent piece of thought leadership called "The Quest for
Convenience", a consumer insight stood out for me; 35% of Western Europeans find
shopping to be a chore. It is an indication of just how busy consumers lives are becoming
and provides a great deal to think about when generating strategies, products and
services that will strike a chord with consumer needs and become successful. One
consideration should be "why are consumers shopping?" and in Western Europe,
consumers say that around 7% of visits in-store is shopping for "today's meal", 13% is to
"replenish" what they have and 19% say to top up on essentials.
Understanding these shopper missions in more depth can help to focus on many things
from product range, store layout and the way we communicate with shoppers. In the same
study 22% of Western Europeans said that they wished there were more products that
made their lives easier which could explain why the percentage of Western European
consumers saying they have ordered a restaurant delivery online has increased by 2%
points between 2017 and 2018 to 20%. All of this differs by country however and the
presence and growth of specialty stores in many markets is certainly fragmenting the type
of shopping trip when you consider formats like Organic or Bargain. Convenience is just
one example of how consumers shopping behaviour is evolving over time and moving
away from what they sought traditionally.
The question that we always ask is "What's Next?" - will this consumer trend continue to
be relevant in the future? There are other insights that suggest it will. According to
forecasts from the U.N., Western European countries will have around an additional 17
million people living in urban centres between 2015 and 2025 and countries like Belgium,
Netherlands and Denmark will remain among the most urbanized in the world. Increasing
population density and congestion are changing many consumers day to day challenges
and needs and these lifestyle changes need to be anticipated and met by retailers,
manufacturers and everyone associated with consumer industries.
One of the biggest changes we may see in the FMCG space over the next few years is the
rapid inclusion of online purchases within consumers’ repertoires. Currently only 5% of
Western Europeans say that they buy FMCG regularly online but 24% said that they will
consider doing so moving forward. This positive sentiment toward online shopping along
with investment and improvement in e-commerce offerings could see accelerated growth
continue well ahead of that seen in-store. There is obviously a challenge to get the
balance right but a first step is to recognize that omni-channel behaviour is increasing
among consumers and industry players who understand the subtle differences in how a
consumer approaches different shopping missions or looks for information on products in
varied ways will strike the right offers earlier. The continued fragmentation of how the
same consumer will make different choices across different channels depending on
evolving needs is a big challenge. It is a challenge however that offers clear advantages
to those who can integrate it into their engagement with the shopper.
5
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EUROPE WEST
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in
collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer confidence
levels above and below a baseline of 100 indicate degrees of optimism and
pessimism, respectively
An overwhelmingly positive consumer sentiment in Q3 compared to
Q2 punctuated by fine weather, the football World cup and a
generally healthy economic environment.
CONSUMER CONFIDENCE INDEX
CONSUMER CONFIDENCE INDEX
GDP and Inflation reflect % change per annum to Q3 2018 or (-) indicates not available at time of publication
Source: Economist Intelligence Unit (EIU)/OECD/local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
Q3 2018Q3 2018 vs
Q2 2018
GDP
(annual %
growth)
Inflation
Germany 106 -1 1.2 2.1
France 77 -1 1.5 2.2
GDP
(annual %
growth)
Inflation Q3 2018Q3 2018 vs
Q2 2018
2.1 1.4 Portugal 92 7
2.3 1.4 Finland 90 7
0.8 1.5 Italy 69 7
2.9 1.1 Switzerland 106 7
2.3 2.0 Netherlands 112 6
2.5 2.2 Spain 97 6
2.1 0.9 Denmark 122 4
2.5 0.8 Ireland 111 3
1.6 3.3 Norway 94 2
1.7 2.3 Belgium 93 2
1.5 2.3 UK 102 1
2.6 2.1 Sweden 100 1
2.6 2.2 AustriaAustria 101 0
6
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3834
41
30 28
49 50
30
3945
39
5055
52
45 46
38 3630
34
45
29
44
23
3935
27
47
28
38
2126
3640
35
47 46
37
47
3431
44
37
45
34
45
27
34
0
10
20
30
40
50
60
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into savings New clothes Holidays / vacations
22
1210
12 13
19
29
21
11
21
13
23
6
22
12
2121 2124 23
15 15
23 24
1820
24
1921 20
24
17
0
5
10
15
20
25
30
35
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
The economy Health
Although positive sentiment prevails across Western Europe there is still
caution in consumers minds with many indicating they prefer to save rather
than spend.
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
WHO’S SPENDING, SAVING AND INVESTING?
Type of concern
After living expenses, how is spare money spent
Bars reflect Q3 2018. Table shows comparison to Q2 2018
EUROPE WEST
MARKETS AT A GLANCE
Bars reflect Q3 2018. Table shows comparison to Q2 2018
CONSUMER SENTIMENTS IN
EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE SI
The economy 2 -1 1 3 3 1 -2 -1 1 -1 -3 -5 -1 2 0 3 1
Health 1 3 3 2 -5 -3 3 -2 2 6 -4 5 -1 0 -4 -3 -3
EU AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Putting into savings -2 -3 -8 -6 2 -3 -2 -3 -3 -4 -5 6 -1 1 -6 -7
New clothes -1 0 1 0 -5 -2 -4 1 6 -1 -3 4 0 7 1 -1
Hol idays / vacations -3 -5 3 0 -4 -3 -2 1 -5 2 1 5 -1 -1 0 -2
7
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PORTUGAL (+0.8%)
0.8%
2.9%
2.1%
1.8%
-0.3%
2.0%
2.3% 2.0% 1.6%
0.4% 1.3%1.4%
2.4%2.2%
1.3%
0.0%-0.5% -0.6%
0.5%
1.3% 1.2%
5.3%
0.1%
1.9%
2.7%
0.0% 2.3%
0.7%0.6%
1.9%
0.8%
2.4%
1.5%
2.3%
1.0%
3.2%
7.6%
2.1%
3.5%3.1%
1.3%
3.8%
3.1%2.8%
3.1%
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
Unit value change Volume change Nominal growth
IRELAND (+1.8%)UK (+1.2%)
FRANCE (-0.2%)
LOOKING THROUGH EUROPE WEST FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q3 2018
Weighted average – WEST EUROPE – 15 countries
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q2 2018 & Q3 2018
Avg. volume growth decreasing versus last period
Avg. volume growth increasing versus last period
ITALY (-0.3%)
BELGIUM (-1.4%)
NETHERLANDS (+1%)
SPAIN (+0.2%)
Colour coding indicates growth or declining trend
compared to same 6 month period year ago
Average volume growth of Q2’18 & Q3’18 vs Q2’17 & Q3’17.
AT BE CH DE DK ES FI FR GB IE IT NL NO PT SE
SWITZERLAND (-0.9%)
AUSTRIA (-0.3%)
FINLAND (+2.6%)
DENMARK (+0.6%)
NORWAY (+0.6%)
SWEDEN (+1.8%)
GERMANY (-0.1%)
8
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AUSTRIA SNAPSHOT
Austria’s economy continued to show solid growth in Q3 ahead of many other markets in the
Euro zone, with thanks to controlled inflation, low unemployment and strong consumer
optimism. Though there’s a growing hesitation among consumers that now is a good time to
buy the things they want and need, consumers are increasingly optimistic towards job
prospects. Despite this optimism, there have been a few drawbacks in the FMCG market.
In the third quarter, price increases drove the small growth in Austria’s FMCG market at 0.8%
value growth for Q3 versus year ago but total volume sold remained stable. What’s behind
this development? We see two main factors behind the slowdown in sales: 1) weaker-than-
usual performance from Discounters as full assortment stores court their shoppers and 2)
that perfect summer weather, driving people outside (rather than shopping in stores).
Looking at the channel development, we see increasing and longer-term growth from
channels that provide everything-in-one-shop, including Supermarkets (400-999m2) and
Hypermarkets (1000-2499m2), while performance from other shops slow or stagnate. Large
Food stores (250 - 399m2) showed the greatest decline (-4.3%), as shoppers opt for stores
with greater selection.
Due to the endlessly warm summer, Beverages - not surprisingly, showed the strongest
growth rates, followed by Dairy products driven by increased prices and trading up in cheese.
Food categories remain the long-term driver of the market, while non-food categories - at
least for this summer - showed the weakest performance as people cut down on store visits
to enjoy the sunshine, while increasingly ordering non-food products online. The Top 5
manufacturers of food and drug assortment combined grew by 3.0% being outperformed only
by the Top 11-30 with a growth rate of 3.5%. Due to the current weaker performance of
Discounters, private labels performed slightly worse than the total FMCG benchmark.
As consumer confidence remains on a high level and the battle for the Christmas season
starts, we expect the FMCG market to continue to grow. Beverages (including hot and
alcoholic) and special products for the Christmas season (like baking goods) will be big
growth drivers in Q4 2018.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Pedro Lima
Managing Director
Austria, Belgium,
Netherlands,
Switzerland
8587 87
86 87 87
94 94
102100 101 101
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU AT
2.7
3.02.9
3.12.9
2.6
2.2 2.2 2.3
1.92.2 2.2
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
9
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2.0%
3.6%
1.5%
2.4%
-4.3%
0.8%
1.5%
2.0%
Total FMCG Hypermarkets 1000 - 2499 m² Hypermarkets > 2500 m²
Supermarkets 400 - 999 m² Large Food 250 - 399 m² Small Food Up To 250 m²
Discounters Drug Stores
TOTAL AUSTRIA – CHANNEL PERFORMANCE
FMCG slowdown in Q3 is the result of weaker-than-usual performance from
Discounters as full assortment stores court their shoppers and good weather
drove people outside, instead of shopping in stores.
Strong performance and longer-term growth is coming from channels that
provide everything-in-one-shop.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
15%
8%
40%
3%
2%
24%
8%
0.8% 1.5%
0.2%
0.5% 1.1% 1.4%2.6%
1.5%
0.9%0.8%
3.4%
0.4%
3.2%3.1%
5.2%
2.4%
1.1%
1.8%
-0.7%0.0%
4.3%
2.0%
3.4% 3.6%
6.3%
3.9% 3.7%3.3%
0.2%0.8%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Austria
Unit Value Growth Volume Growth Nominal Value Growth
10
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Due to the strong summer season, Beverages experienced the strongest
growth rates.
TOTAL AUSTRIA – SUPER CATEGORIES PERFORMANCE
TOTAL AUSTRIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Due to the current weaker performance of Discounters, private labels
performed slightly worse than the total FMCG benchmark.
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 8.3%
Top 6-10 4.9%
Top 11-30 9.7%
Top 31-100 11.3%
100+ 45.0%
Private Label 20.8%
2.0%
3.0%
2.2%
3.5%
1.8%
1.6%
1.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Food Perishable 32.8%
Culinary Shelf-Stable & Other 17.0%
Dairy 11.4%
Alcoholic Beverages 8.4%
Non-Alcoholic Beverages 7.3%
Homecare/Pet Care 7.0%
Confectionery 6.9%
Personal Care 6.1%
Hot Beverages 2.4%
Baby Care 0.7%
2.0%
1.0%
2.5%
3.3%
4.5%
4.2%
0.5%
1.4%
0.3%
1.7%
-1.0%
11
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BELGIUM SNAPSHOT
Belgium’s economy continues to post modest growth throughout the year, with GDP at 1.7%
in Q3 2018. Quarter by quarter, Belgian consumer confidence has also been following this
trend, inching up. Aside from a quick jump to 95 points a year ago, this quarter’s index of 93
is the highest consumer confidence seen since 2011. Typical confidence drivers, however,
remain mixed. While confidence grew in job prospects (from 47 to 51 points), individuals’
confidence in the state of personal finances dropped three points from Q2 to 45. Increasing
utility bills was the biggest concern for Belgians this quarter, up nine points from Q2 with
health concerns also remaining on their radars.
In the FMCG environment, volume sales continued to decline in Q3, though at a lesser rate
(-0.5%) than last quarter (-2.3%). Prices, on the other hand, increased by 2.9%,
compensating for consumers buying less — with the market as a whole increasing 2.4% for
the quarter and 1.4% for the past 12 months. Across retail channels, Large Supermarkets
(3.7%) and Superettes (8.0%) continued to drive growth, while Small Supermarkets took a hit
of -4.1%, in part due to coverage changes with the closure of some Small Supermarkets this
year. Due to the unseasonably warm and protracted summer, non-Alcoholic Beverages
performed well (6.4%), though Alcoholic Beverages showed a lesser increase of 0.4%. This
is likely due to the tax on alcohol, which has increasingly driven consumers to purchase their
alcohol across the border. Aside from Dairy, which showed the usual jump due to the price
increases of milk, we also saw nominal growth in Salted Snacks (2.9%), Fresh (3.3%), and
Bakery and Toast (4.2%). This is not only due to the great weather and people enjoying their
food outside in the sunshine, but also price increases on Bread, Meat (fresh), and a volume
increase on Salted Snacks as the popularity of nuts increases as part of a health trend. As
seen in previous quarters, most growth came from smaller manufacturers (Top 100+, 5.4%)
rather than larger ones. This is particularly interesting as the Top 5 manufacturers received
warm weather boosts in other markets due to increased sales on soft drinks and ice cream -
a trend not seen as strongly in Belgium due to the increasing favour of niche, local products.
Catering to the local/niche demand remains one big way brands can drive incremental
growth.
What’s next for the Belgian market? Though traditionally the holidays bring growth to
Alcoholic Beverage sales, we expect the excise tax on Alcohol to continue to have a negative
impact on Christmas sales. If we look at last year as an indicator, we can anticipate lifts in
Bakery & Toast as well as Dairy, as shoppers fill their baskets for the holiday season.
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) ) Q3 18 OECD
Pedro Lima
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Pedro Lima
Managing Director
Austria, Belgium,
Netherlands,
Switzerland
85
87 8786
87 87
84
95
85
88
91
93
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU BE
1.6 1.6
1.9
1.5 1.4
1.7
2.0 1.9 2.0
1.5
2.22.3
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
12
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TOTAL BELGIUM – CHANNEL PERFORMANCE
Volume sales continued to decline in Q3, though at a lesser rate than last
quarter due to price increases across many categories.
Large Supermarkets, which offer a wide assortment at competitive pricing, and
Superettes, catering to proximity and convenience, continued to drive growth.
FMCG MARKET DYNAMICS - BELGIUM
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
1.4%
-0.3%
3.7%
-4.1%
1.0%
8.0%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets Discounters Superettes
11%
50%
18%
17%
3%
1.2%
2.5%1.8%
0.7%
1.3%
1.0%
2.2%
2.3% 2.2%
2.9%
-0.3%
-1.1%-0.8%
-0.8%
1.4%
-0.8%
-0.4%-0.8%
-2.3%
-0.5%
0.9%1.4%
0.9%
-0.1%
2.7%
0.2%
1.8%1.5%
-0.1%
2.4%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Belgium
Unit Value Growth Volume Growth Nominal Value Growth
13
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TOTAL BELGIUM – SUPER CATEGORIES PERFORMANCE
MAT Q3-2018 MAT Q3-2018
TOTAL BELGIUM – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
Belgians increasingly favour smaller, niche manufacturers that cater to local trends.
Salted Snacks see a boost, not only due to warm snacking weather, but also to an
increasing health trend for nuts.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Alcoholic Beverages 14.5%
Dairy 13.4%
Fresh Products 12.1%
Non Alcoholic Beverages 11.9%
Grocery 11.7%
Health & Beauty 8.3%
Housekeeping 5.8%
Frozen 5.0%
Confectionery 4.6%
Sweet Snacks 3.6%
Hot Beverages 2.8%
Salted Snacks 2.4%
Pet Product 1.9%
Bakery & Toast 1.8%
1.4%
0.4%
3.2%
3.3%
6.4%
-1.4%
-1.8%
-0.3%
1.0%
-1.5%
-0.4%
0.2%
2.9%
-0.1%
4.2%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.5%
Top 6-10 8.2%
Top 11-30 13.7%
31-100 10.0%
100+ 15.5%
Private Label 37.2%
1.4%
0.3%
-1.0%
-0.4%
-0.1%
5.4%
1.8%
14
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DENMARK SNAPSHOT
The Danish economy is in good shape and continues to see stable growth with
increasing job numbers. This is also evident in the Danish Consumer Confidence
Index which jumped to 122. The FMCG environment is on one hand an extremely
competitive market and on the other hand, a market where we find minor areas of
growth and opportunities. We see a demand for more modern stores that meets the
rising expectations of shoppers, which in turn has led to a declining number of both
Discount stores and Supermarkets.
Danish shoppers are overall “thirsting” for an enjoyable shopping experience,
excellent customer service and “everything I need” in one shop. For Supermarkets a
wide variety of products and no out of stock situations is a must, while Danish
consumers are demanding a low price for most items and good value for money
when they shop at Discounters. These trends have forced the Danish FMCG
industry to increase their focus on price, value for money, assortment and
convenience products within fresh food.
The next battlefield of FMCG will be online. For many years a few pure players have
had most of this niche channel for themselves. Due to a combination of significant
investments in e-commerce from other retailers and a change in shopping habits in
a digital direction; e-commerce is set to take off. Today 14% of Danes have bought
their groceries online which has increased by 3% compared to 2017. For
manufacturers, it’s never been more important to have an e-commerce strategy and
plan ready. Now is the time to embed e-commerce into each business unit and start
treating e-commerce as a unique sales channel for the future. For retailers, this
means benchmarking online performance versus the market. How are you
developing? How good is your online customer journey versus competition? and
how can you use e-commerce to attract new shoppers and keep your current
shoppers loyal?
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) ) Q3 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
85 87 87 86 87 87
115 115 116 114 118 122
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU DK
2.5
1.11.3
-0.7
0.6
2.1
0.9
1.51.3
0.71.0 0.9
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
15
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TOTAL DENMARK– CHANNEL PERFORMANCE
Increased competition across most Super Categories has driven down prices.
Beverages and frozen food are driving the value creation due to the hot and
sunny summer in 2018.
The convenience channel continues to create value due to increased sales -
especially in Beverage categories.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
1.2%
0.9%
4.2%
Total FMCG Grocery Trade Convenience
93%
7%
1.1%1.6%
-0.1%
0.7% 1.2%
2.3%2.6% 1.9%
1.0%
-0.3%-1.0%
-0.4%
-0.5%-1.5%
-0.1%-1.5%
-0.5%
-1.4%
0.0%
1.3%0.2%
1.2%
-0.5%-0.7%
1.1%0.8%
2.1%
0.5%
1.0% 1.0%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Denmark
Unit Value Growth Volume Growth Nominal Value Growth
16
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The demand for Beverages continues to add value to the market.
Premiumization in the Dairy categories continues to drive sales.
TOTAL DENMARK – SUPER CATEGORIES PERFORMANCE
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packed Food 27.7%
Beverages 22.2%
Dairy Products 15.7%
Fresh Food 12.2%
Confectionery 6.4%
Frozen Food 6.2%
Household Products 5.8%
Health & Beauty 3.8%
1.2%
-0.5%
4.2%
4.8%
0.0%
-2.6%
3.5%
-3.9%
-3.6%
17
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FINLAND SNAPSHOT
This year, Finland had the warmest summer in recorded history. The period from
June to August was approximately two degrees warmer than usual according to the
statistics of the Finnish Meteorological Institute. Altogether 64 hot days with
temperatures exceeding 25 degrees Celsius were recorded in different parts of the
country.
With rising temperatures, we could also observe rising consumer confidence.
Confidence is now at its highest since late 2008, at 90 index points with close to half
of Finnish consumers considering their personal finances to be either strong or very
strong for the year to come. This will hopefully continue to support FMCG market
growth even when grocery prices have started to rise. On an overall level, consumer
prices increased by 1.4% in Q3 but the grocery prices are increasing more steeply.
During the exceptional summer period, brands were growing faster than private
label. Consumer spend was strong in Beverage categories and Frozen Foods
(specifically ice cream). These top performing categories were driving growth in
Supermarkets and Variety stores. Beverage growth continues to be partly driven by
the entry of stronger alcoholic beverages* to grocery stores – accounting for almost
a full percentage point of the total FMCG market growth on an annual level.
Additionally, soft drinks and water were among the top 10 growing categories in Q3
in terms of absolute value growth.
Having enjoyed an extraordinary summer and feeling confident about personal
finances, the Finnish consumers’ spending intentions are stronger than they were in
the 2010s. We can therefore expect this Christmas season to be better than the
previous ones - it is indeed a season to be jolly.
*Alcoholic beverages that contain a maximum of 5.5 % alcohol by volume were introduced to grocery stores
beginning of the year, when previously only products with less than 4.7% alcohol by volume were sold there
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 OECD
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
85 87 87 86 87 87
70
81 80 82 8390
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU FI
3.3
2.32.6
2.72.5
2.3
0.90.7 0.6
0.81.1
1.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
18
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3.6%
2.4%
5.8%
2.3%
4.2%
6.4%
1.0%
Total FMCG Hypermarket Supermarket Superettes Hard Discounter Variety Stores Other Shop Types
TOTAL FINLAND – CHANNEL PERFORMANCE
Huge increase in consumer confidence and exceptionally warm summer has
driven volume growth.
Shopping frequency increased in Supermarkets and Variety stores with the
good summer and new alcohol regulations positively impacting sales value
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
38%
28%
10%
11%
6% 8%
0.4%
2.5%
-0.2% -0.7% -1.1%-0.7%
1.0%
1.8%
2.0%2.3%
1.2%
1.1%
1.7%2.1% 3.2%
2.5% 0.5%
-1.0%
0.0%5.3%
1.7%
3.6%
1.4% 1.4%2.1% 1.9% 1.6%
0.8%
2.0%
7.6%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Finland
Unit Value Growth Volume Growth Nominal Value Growth
19
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Beverages are the fastest growing super category, driven by growth in beer,
long drinks, bottled water and soft drinks. Frozen Food growth is driven by
ice cream and frozen berries and fruits.
TOTAL FINLAND – SUPER CATEGORIES PERFORMANCE
TOTAL FINLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Brand growth outperformed Private Label. Stronger alcoholic beverages
contributed heavily to branded players growth.
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.6%
Top 6-10 7.1%
Top 11-30 14.6%
Top 31-100 12.7%
100+ 26.4%
Private Label 23.7%
3.6%
4.5%
5.6%
4.5%
4.9%
2.0%
3.2%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Foods 35.6%
Dairy 15.3%
Shelf Stable Foods 13.9%
Beverage (Excl.Wines&Spirits >5.5% Alc.) 11.0%
Others 10.1%
Household Products 5.4%
Hygiene 4.8%
Frozen Foods 4.0%
3.6%
3.3%
1.3%
1.4%
12.1%
3.9%
1.1%
1.6%
7.5%
20
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2.3
2.7 2.8
2.2
1.71.5
1.0 1.0
1.2
1.5
2.1 2.2
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
FRANCE SNAPSHOT France seems to be in the middle of a bumpy road, with GDP still rising but domestic
consumption showing signs of weakness. Consumers are seeking reassurance with
a significant proportion of consumers indicating they are more worried this quarter
about the future of their personal finances.
FMCG is a great indicator of broader consumption trends, and shows very weak
growth this quarter despite great weather throughout the summer and the World Cup
effect. Even the promotional focus from retailers, before new laws are implemented
next year with lower thresholds for price and promotion did little to instigate greater
volume consumption. Historical mass market channels like Hypermarkets and
Supermarkets are still challenged by other specialised stores (such as fresh
products, organics) and e-commerce.
That said, value growth is still there for French retailers due to premiumization on
FMCG categories with a growing demand for non-dairy and dairy fresh food, organic
products, small brands and click & drive services. In 2019, new legislation will be
implemented which will cap price discounts and promotional levels for retailers as
well as guaranteeing a fair price to producers. As there has been no official
announcement as to how exactly these new rules will be implemented, uncertainty
exists for retailers and manufacturers. However there is certainty that it will definitely
have an impact on categories, retailers and brands in the coming months. We
anticipate Private Label will gain share over this time.
Last but not least, we expect a difficult end of year as the early days of disputes and
protests whereby the “yellow jackets” have hit the French streets which has
interrupted French households usual shopper behaviour, with a drop in store visits
leading to a significant decrease in sales for retailers and brands. The industry must
closely monitor how these shopping behaviours are impacted in the coming months.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 OECD
Anne Haine
Managing Director
France
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
85 87 87 86 87 87
7571
79 79 78 77
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU FR
21
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TOTAL FRANCE – CHANNEL PERFORMANCE
Volumes remain stable but premiumization still drives growth for FMCG.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
Historical offline channels struggle to find growth while click & drive outperform
the market.
1.9%
0.2%
2.0%
1.0%
8.1%
5.3%
Total FMCG Hypermarkets Supermarkets
Convenience Drive (E-Commerce) Smpl / Discounters
41%
34%
8%
5%
12%
1.1%
1.9%
2.5%
1.3%
-2.2%
0.8%1.4% 1.1%
1.5%
2.0%
-0.1%
0.0%
-2.0% -2.0%
5.1%
0.2%1.5%
0.2%
-0.5%
0.1%
0.9%
1.9%
0.5%
-0.7%
2.9%
1.0%
2.9%
1.3% 1.0%
2.1%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
FranceUnit Value Growth Volume Growth Nominal Value Growth
22
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Long-term growing demand for non-dairy food is confirmed with ice-cream
benefiting from hot weather conditions.
TOTAL FRANCE – SUPER CATEGORIES PERFORMANCE
TOTAL FRANCE – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Small players are still on the rise. Private labels’ performance is stabilising.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Sweet Grocery 17.7%
Fresh Non-Dairy 17.3%
Dairy 16.1%
Savoury Grocery 12.1%
Alcoholic Drinks 9.7%
Soft Drinks 7.1%
Homecare 5.9%
Personal Care 5.8%
Paper Products 3.6%
Savoury Frozen Food 3.3%
Sweet Frozen Food 1.2%
1.9%
0.7%
3.6%
3.1%
1.1%
2.5%
1.7%
2.4%
-1.5%
0.2%
-0.8%
7.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 11.6%
Top 6-10 7.2%
Top 11-30 16.6%
31-100 16.8%
100+ 15.2%
Private Label 32.6%
1.9%
0.2%
-0.1%
2.4%
2.4%
5.9%
0.5%
23
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GERMANY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD GDP for Q3 2018
Ingo Schier
Managing Director
Germany
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
The upswing in Germany’s economy has dampened with the year’s forecast of 2.2%
growth by the German Council of Economic experts in March being corrected to 1.7%
in the full year current forecast. This development has been influenced by the decline
in demand in the most important German sales markets such as auto production. This
is due to the economic situation as well as the risks of protectionist trade conflicts and
a disorderly Brexit. By contrast, the persistently high demand for labour is causing
wages to rise and the propensity for private households to consume is increasing
thanks to a low savings incentives due to low interest rates. Consumer confidence
remains high (index = 106) and far above the European average of 87 for Q3 2018.
The FMCG market was up 2.3% year-on-year in Q3, with volume sales growth of
0.5% while unit value grew 1.8%. Besides the volume growth of non-alcoholic
beverages, beer (mix) and ice cream due to the hot summer, a good fruit harvest is
leading to growth in gelling agents (46.7%) and canning aids (36.8%). Smaller
formats like Beverage stores (10.6% turnover) and petrol stations (5.5%) are also
benefiting, but even small consumer markets are still on the upswing (6.0%).
Discounters are showing only slight growth at 2.8%.
Is the purchasing behaviour for FMCG changing due to the positive economic
situation? Large food manufacturers claim a decline in consumption. When
interrogating consumers, 46% confirm they have changed their eating habits in the
last years. 50% say they throw away less food, in particular by consciously
purchasing less quantities. However, this "reduced consumption" as a general
purchasing behaviour cannot be comprehensively observed in the quantities sold off
in food retailing. Although less packaged food is sold in some segments, this decline
can often be explained by higher prices and/or segment changes (e.g. from fruit
yoghurt to plain natural one). Germans do not migrate to "alternative shopping
locations" either. Organic markets, farm shops or weekly markets are only used
intensively by a few households. While, there are some indications that a decline in
food consumption is on the horizon, it is too early to tell if this trend may eventuate.
85 87 87 86 87 87
103 102 103108 107 106
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU DE
2.2
2.72.8
2.01.9
1.2
1.61.7 1.6
1.3
1.92.1
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
24
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TOTAL GERMANY – CHANNEL PERFORMANCE
Market growth is still mainly driven by price increases, but some
categories have benefited from this year’s warm weather conditions.
Hypers (esp. smaller ones) are still the main drivers of growth, as
consumer prefer one-stop shopping especially in warm weather.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
3.1%
4.0%
-0.1%
2.8%
2.8%
Total FMCG Hypermarkets Supermarkets Discounters Drug Stores
41%
8%
41%
10%
2.2%
2.8%
1.7%
1.3%2.9%
3.1%
3.2% 3.6%
2.1%
1.8%
-1.0%
0.3%
-0.3%
-2.0%
0.0%
-1.1%
0.9%
1.0%
-0.8%
0.5%
1.2%
3.1%
1.4%
-0.7%
2.9%
2.0%
4.1%4.6%
1.3%
2.3%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Germany
Unit Value Growth Volume Growth Nominal Value Growth
25
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TOTAL GERMANY – SUPER CATEGORIES PERFORMANCE
TOTAL GERMANY – MANUFACTURER PERFORMANCE - FMCG
Smaller manufacturers of regional and trendy products (e.g. regional
beverage players and producers of products such as activated carbon,
vegan cosmetics or coconut water) record the greatest growth.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Price increases in dairy products are the main value drivers while Beverages
and Ice-cream profit from sunny weather with high temperatures since April.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Food Ambient 17.3%
Dairy 12.0%
Non Alcoholic Beverages 11.7%
Alcoholic Beverages 10.4%
Confectionery 9.9%
Fresh Food Selfservice 9.2%
Personal Care 6.8%
Household Care 6.8%
Tobacco 6.1%
Frozen Food 5.6%
Pet Food 1.6%
Baby 1.5%
Health Care 1.0%
3.1%
3.3%
7.4%
4.0%
3.6%
0.1%
1.6%
2.4%
0.9%
2.9%
4.2%
1.2%
-3.2%
2.4%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 7.7%
Top 6-10 5.2%
Top 11-30 9.6%
Top 31-100 14.5%
100+ 22.5%
Private Label 40.4%
3.1%
1.1%
2.8%
3.6%
2.8%
4.2%
2.8%
26
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IRELAND SNAPSHOT
Following a positive first half of the year, Ireland’s strong economic performance
continued with increased employment and a bump in consumer confidence, up three
points to 111. The positive momentum from the summer’s unseasonably warm
weather continued into July and August and helped boost volume growth to 2.7%,
and value growth to 3.1%, with prices remaining static. All channels remained in
positive growth, with the Discounters performing particularly well.
Consumers continue to spend ahead of last year and, with no sign of confidence
falling, making the most of the lead-up to the Christmas trading period will be critical
to sustain growth. Retailers and brands must ensure they get their ranging and
availability right to help them capture the early Christmas spend, particularly in
indulgent categories such as confectionery and alcohol. As branded products still
outperform own label, manufacturers have a key role to play in maximising
promotional opportunities that will help attract and drive shoppers both in store and
online.
The outlook for the Irish economy and retail sector remains positive. However, the
continued uncertainty surrounding Brexit has started to take centre-stage and as the
outcome is still unclear, businesses, retailers and brand owners need to be ready for
all eventualities. Maximising the 2018 Christmas selling period and capitalising on
the high consumer confidence is imperative as we head into what could be a
turbulent start to 2019. Focusing on addressing changing consumer needs,
particularly around sustainability and health, will be key factors for success in 2019
and beyond.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) GDP Q3 forecast, CPI OECD Q3.
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
85 87 87 86 87 87
102 103 103 103108 111
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU IE
3.9
6.7
13.0
5.4
10.0
2.50.0 0.1 0.5 0.5 0.4 0.8
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
Paul Walker
Managing Director
United Kingdom & Ireland
27
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TOTAL IRELAND – CHANNEL PERFORMANCE
Continued positive consumer confidence & strong economic performance
helped drive increased consumer consumption and spend in Q3.
Following a slow down in growth in the first half, Discounters have responded to
the Multiples growth in Q3 with a continued focus on brands as the key driver of
recent growth.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
*Multiples = Multiples & Dunnes
2.8%
2.8%
2.7%
3.2%
Total FMCG Multiples Convenience Discounters
47%
34%
20%
0.4% 0.7%
-1.5%
0.2%
1.4%
0.1%
1.8%
0.8% 0.4%1.2%
2.1% 1.2%3.5%
0.4%
2.4%
2.3%
1.0%2.7%1.6%
2.8%
-0.3%
3.7%
1.9%
2.5%
4.1%
1.8%
3.1%
MAT YA MAT TY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Ireland
Unit Value Growth Volume Growth Nominal Value Growth
*Q4 16 unavailable due to adjustment in numbers with limited historical data
28
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Easing of financial pressures and seasonal opportunities in the hot summer
see indulgent categories, such as Confectionery and Alcohol, benefit the
most from increased consumer spending.
TOTAL IRELAND – SUPER CATEGORIES PERFORMANCE
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Confectionery 22.3%
Alcohol 18.2%
Chilled 16.5%
Tobacco/Sundries 13.0%
Ambient 10.1%
Household 5.3%
Bakery 5.1%
Health & Beauty 4.5%
Frozen Food 3.2%
Pet Food 1.6%
2.8%
5.9%
3.6%
1.7%
4.1%
-0.5%
0.2%
0.5%
0.5%
1.3%
3.3%
29
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ITALY SNAPSHOT In Q3 2018, Italy’s GDP growth slowed to 0.8% versus the same time last year,
but agriculture, forestry and fishing, as well as in the services sector contributed to
performance. Once again, food drives GDP growth. While the average annual
GDP growth for 2018 is expected to be 1.0%, consumers in Italy are increasingly
optimistic, with the consumer confidence index growing from an index of 62 to 69
points, outpacing the European average stability. This is the highest figure since
the start of the crisis and nearing the highs of Q4 2010 where it reached 71.
This positive sentiment could be supported by the recent political events whereby
the so-called “Government of Change”, a coalition of two parties that got 50.1% of
votes, took office in early June and has been promising citizens’ improvements in
basic income, retirement reform and the flat tax. The unemployment rate has also
slightly declined from 10.6% to 9.8%, mainly thanks to seasonal jobs, along with
the typical “summer optimism”. One in three Italians (32%) believe their financial
situation will improve in the next 12 months, up five points from the same time last
year.
As far as FMCG retailers’ performance is concerned, this past summer has
showed an increase in volume up 1.0% over the last year and prices up 1.2%
creating a positive value sales growth of 2.2% for the last year. Consumers’
purchase choices are leaning towards economical convenience, with Discounters
and Drug stores performing strongest and private labels’ and small brands’ annual
sales growing ahead of the market at 4.2% and 3.3% respectively. Key
consumption trends driving growth in the last few years, such as healthy food,
added side-services and ready-to-eat, are now becoming definitive shopping
choices, e.g. whole wheat, while others were more temporary fashions, e.g. gluten-
free. However, trends and preferences vary greatly from region to region,
confirming Italy as a diverse and vibrant food market. Strategies that look at Italy
from a national level only can be risky in this diverse context, and companies that
are set for success must look below the surface to the unique niche consumer
needs and tastes by region.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD for Q3 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Roberto Pedretti
Managing Director,
Central & Southern
Europe
85 87 87 86 87 87
5865
68 6662
69
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU IT
1.7 1.7
1.6
1.31.2
0.8
1.5
1.3
1.1
0.8
1.0
1.5
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
30
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TOTAL ITALY – CHANNEL PERFORMANCE
Some trends that have driven FMCG growth over the last few years
appear to have been temporary (e.g. some health and service related
offerings) with growth slowing.
A renewed quest for lower prices is leading the growth of Discounters and
Drug stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
2.2%
1.5%
2.1%
-2.1%
5.0%
7.8%
Total FMCG Hypermarkets Supermarkets Convenience Discounters Drug Stores
27%
38%
12%
18%
5%
1.2%
-0.5%
0.7%
0.9% 0.6%1.3%
0.7%
1.0%
1.3%
1.0%
2.1%
-0.5%
3.1%
2.6%1.7%
2.4%
-0.7%
0.0%2.2%
1.6%
0.2%
4.0%
3.1% 3.1% 3.1%
0.3%
1.3%
MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Italy
Unit Value Growth Volume Growth Nominal Value Growth
31
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Fresh and natural products drive food sales, confirming the rising need for
quality and ready-to-eat solutions.
TOTAL ITALY – SUPER CATEGORIES PERFORMANCE
TOTAL ITALY – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Private labels’ and small brands’ sales are growing faster than larger players.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged Food 30.0%
All Fresh 29.2%
Beverages 14.2%
Personal Care 9.9%
Home Care 7.7%
Frozen 5.4%
Pets 2.0%
Light Bazaar 1.3%
Heavy Bazaar 0.2%
Textile 0.1%
2.2%
0.7%
5.4%
1.8%
1.0%
0.2%
1.8%
1.9%
-2.2%
5.4%
-3.4%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 9.9%
Top 6-10 5.6%
Top 11-30 12.0%
Top 31-100 13.6%
100+ 32.2%
Private Label 26.7%
2.2%
0.8%
-1.5%
-0.5%
0.7%
4.2%
3.3%
32
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ECONOMY WATCH
NETHERLANDS SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) OECD Q2 2018 The Conference Board® Global Consumer Confidence Survey
is conducted in collaboration with Nielsen.
The Dutch economy looks set to maintain its solid growth, with GDP at 2.3% for Q3 2018.
Inflation remains under control at under 2% but is slowing inching up. Dutch consumers
are more confident than ever, with the consumer confidence increasing to an index of 112
in the third quarter of 2018 — up from 106 in Q2. One of the major drivers of this increase
was deepening confidence in job prospects, with positive sentiment increasing 13 points
to 68%. The job market in the Netherlands remains very strong, putting consumers in the
driver’s seat of their career choices.
After months of declining volume sales, the FMCG market saw a jump in the third quarter
to 3.8% — with volumes increasing 2.3% and prices increasing 1.4%. When looking at
results across the last 12 months (MAT), all channels saw growth — with Petrol showing
the greatest expansion at 3.6%. The growth in Petrol stores is in part due to the
transformation of some petrol stores into small “supermarkets,” in cooperation with some
food retailers — as well as a growth in soft drink and ice cream sales due to the unusually
long and hot summer. The Food channel (including e-commerce) grew 3.3% and Drug
and Perfumery (excluding e-commerce) grew as well at 1.4%, though the smaller growth
could be partially attributed to increasing migration to e-commerce channels.
Looking at category growth, Beverage sales spiked during Q3 (4.1%) — also due to the
warmer weather. Other winners were Dairy (+5.6%) and Butter (+4.5%), due to the price
hikes, and Frozen Food (+6.3%) as shoppers filled their baskets with ice cream during the
endless summer. The big winners in Q3 were the top five manufacturers as well as
private label, which saw nominal value growth of 4.2% and 4.6% for the year respectively.
The top five also dominated the charts thanks to the warmer than usual weather — with
the largest manufacturers recording big sales for their Beverage and Ice Cream
categories. Private label, on the other hand, grew thanks to the Fresh category. Our data
shows that without Fresh, we would see little to no growth within Private Label.
With the holiday season already upon us and consumer confidence at its all-time high, we
expect FMCG growth to continue as shoppers hit the stores. We anticipate big growth
figures from the usual suspects during the holiday season: meat (and meat products),
beer, wine, champagne, pre-packed bread, cheese, coffee, biscuits, chocolate, chips,
yellow fats, peanuts and fish. Retailers and manufacturers would do well to focus on or
attach themselves to these festive foot traffic drivers.
Pedro Lima
Managing Director
Austria, Belgium,
Netherlands,
Switzerland
85 87 87 86 87 87
102 101 101 101106
112
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU NL
3.3
2.9 3.1 3.1 3.0
2.3
1.0
1.5 1.41.2
1.6
2.0
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
33
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3.1%
3.3%
1.4%
3.6%
Total FMCG Food Drug-Perfumery Petrol
TOTAL NETHERLANDS – CHANNEL PERFORMANCE
A spike in consumer confidence has contributed to increase in volume sales as
consumers enjoyed the summer months.
Strong performance in Petrol in part due to the transformation of some petrol stores
into small “supermarkets,” in cooperation with some food retailers.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
*Total FMCG includes e-commerce from January 2016
1.9%
2.6%1.1% 0.4%
2.4%3.3%
3.7%
3.0%2.4%
1.4%
-1.5%
0.5%
0.5%
-0.9%
1.3%
-0.5%
0.0%
-0.4% -0.3%
2.3%
0.4%
3.1%
1.6%
-0.5%
3.6%
2.8%
3.8%
2.7%
2.0%
3.8%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
NetherlandsUnit Value Growth Volume Growth Nominal Value Growth
85%
11%4%
34
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TOTAL NETHERLANDS – SUPER CATEGORIES PERFORMANCE
TOTAL NETHERLANDS – MANUFACTURER PERFORMANCE - FMCG
The top five dominated the charts thanks to the warmer than usual weather
— with the largest manufacturers recording big sales for their Beverage and
Ice Cream categories.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Big spike in Beverage sales and Frozen Food (ice cream) due to the warmer
weather.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 24.1%
Other Shelf Stable Food 17.9%
Personal Care 13.5%
Confectionery 11.4%
Dairy 11.3%
Tobacco 11.2%
Frozen 5.1%
Home Care 3.5%
Margarine/Butter/Fat 2.0%
3.1%
4.1%
1.5%
2.5%
1.5%
5.6%
2.2%
6.3%
2.1%
4.5%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.8%
Top 6-10 6.7%
Top 11-30 13.7%
Top 31-100 16.4%
100+ 26.7%
Private Label 19.7%
3.1%
4.2%
3.0%
2.1%
2.7%
2.2%
4.6%
35
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NORWAY SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD Q2 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
The overall growth in GDP has been stable at around 2% in the last few years while
the value growth in the grocery market after the third quarter is still weak. Measured
against corresponding period last year, Q3 is the best quarter so far this year. The
third quarter accounts for 42% of the total value added.
Norway has experienced a great summer and this has contributed to good
development in several product groups which normally experience higher sales in the
summer months. The categories such as Frozen Food (5.8%), Beverages (5.8%) and
Chocolate / Confectionery (4.2%) have the strongest percentage development.
The value growth within Beverages and Chocolate/Confectionery is mainly driven by
increased tax levels on sugar containing product groups.
We still see positive developments in several categories, but like earlier periods this
year, there are some categories experiencing a significant decline. We continue to see
significant growth in the border trade, other retail concepts (wide assortment - dollar
stores) and online grocery, which adds competition to the traditional grocery channel.
The lasting decline in the Non food categories is now threatening to dip below 10% of
the value contribution in total FMCG. It is more important now than ever before to set
the optimal assortment and price and promotion mix at banner level to meet
consumers’ demand in the optimal way.
85
87 8786
87 87
82
90
86
89
92
94
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU NO
2.3
3.7
2.11.8
1.51.6
2.1
1.51.3
2.0
2.4
3.3
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
36
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TOTAL NORWAY – CHANNEL PERFORMANCE
Continued high pressure from border trade, e-commerce and new
retailer concepts is impacting FMCG growth rates.
Discounters continue to gain market share at the expense of
Supermarkets due to new store openings and the transition of
established Supermarkets to Discount stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
2.0%2.2% 2.9%
3.5%
-0.7%
0.8%
1.8% 2.0% 1.6%2.4%
0.0%
0.4%
-0.1%
-1.5%
2.3%
0.8%
0.7%0.8%
0.5%
0.7%
2.0%
2.6%2.8%
2.1%1.6% 1.6%
2.5%2.8%
2.2%
3.1%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
NorwayUnit Value Growth Volume Growth Nominal Value Growth
6%
29%
55%
11%2.6%
1.3%
2.2%
2.9%
3.4%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes
37
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Beverages, Frozen food and Chocolate and Confectionery performed well due to a
combination of good weather and increased taxation on products containing sugar.
TOTAL NORWAY – SUPER CATEGORIES PERFORMANCE
TOTAL NORWAY – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Private label is gaining volume and value by delivering on the promise of value for
money and offering “good enough” quality in many categories.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Fresh Food 28.9%
Beverages 16.1%
Packed Food 14.4%
Chilled Wares And Oils 13.0%
Tobacco 7.3%
Frozen Food 6.0%
Chocolate And Confectionery 4.9%
Wash And Housekeeping
Products4.0%
Health And Beauty 3.7%
Other Nonfood Products 1.0%
Pet Food / Pet Articles 0.6%
2.6%
2.1%
5.8%
2.8%
3.1%
1.8%
5.8%
4.2%
-4.8%
-3.4%
-2.5%
0.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 24.1%
Top 6-10 10.0%
Top 11-30 19.4%
Top 31-100 15.3%
100+ 3.7%
Private Label 27.6%
2.6%
2.0%
1.7%
3.3%
0.8%
0.8%
4.4%
38
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PORTUGAL SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD Q2 018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Roberto Pedretti
Managing Director,
Central & Southern
Europe
The economic environment in Portugal continues to improve and as a result,
national consumption is very positive. The national GDP continues to grow and
the unemployment rate is decreasing with the development and growth of
tourism in Portugal as a contributing factor to the country's economic recovery.
Historically, the Consumer Confidence Index has been relatively low but this
quarter it has reached its highest value ever (92 points), surpassing the
European average by five points and almost reaching the world average. This
is a strong signal of an improving climate and confidence in national
consumption. This is the beginning of a new era, and the market needs to be
prepared for it.
Consumers now have more money available and are willing to pay higher
prices for products that meet their increasingly demanding needs. As a result,
the Fast Moving Consumer Good market in Portugal is gaining in value,
increasing by 2.8% in the third quarter, supported by a unit value growth of
2.2% while volumes remain stable (0.6%).
To respond to an increasingly demanding, more powerful and less loyal
consumer, brands and retailers must focus on the shopper and work on an
offer that meets their needs. This consumer is willing to spend money on
convenient solutions that give them the time to do what they like the most,
meet their values and needs, and offer a satisfying and surprising shopping
experience. Industry players would do well to consider how they can deliver
time, value and an engaging experience at each step of the path to purchase.
85
87 8786
87 87
82
85 84
90
85
92
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU PT
3.1
2.5 2.5
2.22.4
2.1
1.6
1.3
1.8
0.9
1.31.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
39
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TOTAL PORTUGAL – CHANNEL PERFORMANCE
FMCG continues to grow in value supported by inflation as the market trades
up to higher price tiers.
Smaller store formats are highly dynamic, as consumers look for greater
convenience in their shopping experience.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
4.0%
2.5%
4.4%
5.2%
Total FMCG Hypermarkets Supermarkets Superettes+Traditionals
26%
66%
8%
2.3%2.8%
0.6%1.2%
2.4% 2.8%
3.8% 3.0%
1.6% 2.2%
1.2%1.2%
3.4%0.3%
3.7% 0.2%
2.9%
1.1%
1.0%
0.6%3.4%
4.0% 4.0%
1.6%
6.1%
3.0%
6.7%
4.1%
2.7% 2.8%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Portugal
Unit Value Growth Volume Growth Nominal Value Growth
40
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TOTAL PORTUGAL – SUPER CATEGORIES PERFORMANCE
TOTAL PORTUGAL – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
The recent sugar tax and mineral water’s dynamism continues to drive Non
Alcoholic Drinks growth. Frozen products bring greater convenience and are
growing strongly.
Consumers are more willing to try new brands, leading to the growth of smaller
manufacturers.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Grocer Products 38.5%
Dairy Products 17.9%
Personal Care 11.0%
Alcohol Drinks 10.7%
Household Care 8.0%
Non Alcohol Drinks 6.9%
Frozen Products 6.9%
4.0%
4.2%
3.2%
1.9%
5.0%
3.0%
5.6%
5.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.1%
Top 6-10 7.9%
Top 11-30 15.5%
Top 31-100 13.4%
100+ 15.4%
Private Label 31.6%
4.0%
3.8%
0.3%
4.8%
5.6%
5.5%
3.2%
41
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SPAIN SNAPSHOT Spain maintains solid GDP growth at 2.5% this quarter, ahead of many other
markets despite a slowing trend which comes as no surprise within the international
context of Brexit uncertainty, and rising oil prices, with Spain being a country
heavily dependent on imports. While construction and services continued to be the
main drivers of domestic consumption, internal uncertainty was evident due to the
current political situation where the Spanish government is unable to approve the
General State Budget because of their parliamentary situation, and instead are
having to adapt existing expenditures.
Consumer confidence in Spain has grown, supporting the economic positivity of the
country, but it has been driven predominantly by consumers’ optimism towards
personal finances which is reflected by improvements in tourism, the labour market
and consumption over the summer season.
The FMCG industry reflects the overall situation in Spain with a sales value of 3.2%
in Q3 driven by both volume (1.2%) and price increases (2%) assisted by a late hot
summer and the World Cup. With summer continuing into September, categories
like Frozen Food lead by Ice Creams, and Beverages fared particularly well.
Looking ahead, there are both bright spots and shadows on the horizon. On the one
hand, economic growth, although slowing down, is one of the highest in Europe and
employment trends have improved in recent months. On the other hand a static
demography does not help the growth of FMCG, although the Spanish consumer is
remaining optimistic with solid expectations for the Christmas season.
Commencing with Black Friday sales, we anticipate a positive outlook ahead but it
us up to manufacturers and retailers to work together to plan for innovation in
categories that have the propensity for shoppers to spend more.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) OECD GDP Q2 2018
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
ECONOMY WATCH
Roberto Pedretti
Managing Director,
Central & Southern
Europe
85
87 8786
87 87
91 91
93
91 92
97
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU ES
3.12.9
3.1
2.8
2.5 2.5
1.9 1.9
1.6
0.9
2.02.2
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
42
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TOTAL SPAIN – CHANNEL PERFORMANCE
A late hot summer and the World Cup were driving forces behind FMCG growth
in Q3.
Proximity and Convenience stores are the fastest growing channels focusing on
urban centres. Petrol stations are also becoming small stores and small
supermarkets are expanding via franchise agreements.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
3.7%
-0.8%
4.7%
2.2%
Total FMCG Hypermarkets Supermarkets Drug Stores
15%
80%
5%
1.6%
2.8%
0.3%0.6% 1.1%
1.9%1.8%
2.2%3.9%
2.0%
1.9%0.9%
3.4% 1.8%
2.6%
2.4%3.5%
0.9%
-0.8%
1.2%
3.5% 3.7% 3.7%
2.4%
3.7%
4.3%
5.3%
3.1% 3.1% 3.2%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Spain
Unit Value Growth Volume Growth Nominal Value Growth
43
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Ready to eat meals and Frozen are the most dynamic categories driven
by consumers’ need for convenience.
TOTAL SPAIN – SUPER CATEGORIES PERFORMANCE
TOTAL SPAIN – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Small manufacturers and Private Label (PL) show greatest growth. PL
growth stems from strong performance of key retailers who have a strong
PL offering as part of their business.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged food 25.3%
Drinks 15.2%
Health & Beauty 12.0%
Cooked meats 8.4%
Household 8.4%
Canned food 6.4%
Frozen 5.5%
Dairy 5.3%
Milk & shakes 4.9%
Cheese 4.5%
Ready meal 4.1%
3.7%
4.2%
3.4%
2.4%
4.4%
2.2%
3.9%
4.8%
2.0%
1.1%
4.1%
10.0%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 10.5%
Top 6-10 5.2%
Top 11-30 11.6%
Top 31-100 9.8%
100+ 21.5%
Private Label 41.3%
3.7%
-1.1%
0.7%
0.6%
1.3%
6.8%
5.3%
44
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SWEDEN SNAPSHOT
In Sweden, throughout Q3 2018 there has been much discussion and speculation about
the election in September. Swedish consumers are optimistic, above the European
average. Crime, immigration and terrorism which had been high on the agenda as top
concerns are lessening, with the economy becoming the top concern among consumers
in Q3 2018.
Within FMCG, volume consumption is bouncing back in the last quarter, but the annual
performance is still suffering from last year’s price increases. Discounters are leading
the growth in FMCG as well as the larger store formats. The Swedish shopper seeks
value for money and wants a good deal, with promotional pressure increasing in the
market. Obtaining everything you need in one shop and product availability (no out of
stock situations), are other important attributes that determine Swedish shoppers’ store
choice. Hard Discounters are growing strongly with Lidl rolling out an aggressive plan
to open 29 new stores next year.
Dairy, Beverages and Frozen food have shown strong growth over the last 12 months
thanks to the very warm summer weather, not ending until the end of September. The
only super category in decline is household products caused by channel switching to
Dollar stores. Private Label is still hot in the Swedish grocery trade, growing faster than
the market together with small local brands. 37% of the Swedish shoppers say the
would change to cheaper grocery brands to save on household expenses.
Higher promotional pressure in the market presents a challenge for both retailers and
manufacturers making it critical to secure optimal pricing and promotional strategies.
E-commerce growth continues to be a very hot topic in the market and Amazon is
expected to come to Sweden in Q1 2019. Despite lots of e-commerce buzz, grocery
online shopping is behind other categories (like e.g. travel and books), and the physical
store is not dead - the battle remains in store!
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 2018 GDP estimate
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Cecilie Westh
Managing Director
Nordics
8587 87
86 87 87
94
9897
99 99100
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU SE
2.6 2.52.7
2.8
2.42.6
1.8
2.2
1.8 1.71.9
2.1
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
45
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3.4%
3.5%
3.6%
2.3%
3.2%
5.1%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes Discounters
TOTAL SWEDEN – CHANNEL PERFORMANCE
Population growth is contributing to the volume growth.
Higher promotion pressure in the market is driven by the strong
performance of Discounters.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
37%
32%
20%
6%
6%
-1.9%
2.1%
-3.2% -2.1% -3.1%-0.6%
3.0%1.9% 1.4% 1.3%
3.6%
1.3%
4.4%
1.8%
6.5%
3.2%
1.1%1.4%
1.8% 1.9%1.7%
3.4%
1.2%
-0.4%
3.4%2.6%
4.1%3.3% 3.2% 3.1%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Sweden
Unit Value Growth Volume Growth Nominal Value Growth
46
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All categories except Household Products grew, with the strongest growth
coming from higher prices in Dairy and weather driven consumption in Frozen
Food and Beverages.
TOTAL SWEDEN – SUPER CATEGORIES PERFORMANCE
TOTAL SWEDEN – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
The biggest brands and manufactures are challenged by Swedish shoppers
increasing demand for small local brands and Private Labels.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Packaged Food 24.5%
Fresh Food 20.5%
Dairy Products 19.9%
Beverages 10.4%
Frozen Food 9.1%
Household Products 6.9%
Health And Beauty 5.0%
Confectionery 3.7%
3.4%
2.6%
2.4%
5.1%
6.5%
7.2%
-1.8%
0.8%
0.7%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 14.7%
Top 6-10 6.7%
Top 11-30 15.6%
Top 31-100 20.9%
100+ 16.6%
Private Label 25.5%
3.4%
1.9%
3.6%
2.6%
3.6%
2.5%
5.0%
47
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SWITZERLAND SNAPSHOT
The Swiss economy has experienced an impressive performance in 2018 with GDP
increasing rapidly over several quarters, employment on the rise, and consumer
sentiment in Switzerland jumping seven points from the second quarter — now at an
index of 106. Reflecting the positive macroeconomic conditions, the Swiss FMCG
market continues to grow, up 1.0% in total value over the last 12 months. Q3 saw a
value growth of 1.5% due to price increases of 2.1% while volume sales contracted -
0.6%. The unusually warm weather in Q3 is the main driving force behind the
positive development as sales of Non-alcoholic Beverages and Frozen food (ice
cream) jumped due to the prolonged summer.
Supermarkets, and in particular small Supermarkets and Discounters, profited the
most from this growth, while Department stores continue to lose relevance due to
market positioning, strong competition, and increased price pressure. The
noticeable upturn in the Swiss franc in the wake of increasing international
uncertainty over the summer months has further intensified price pressure on
cosmetics and other Personal and Household care categories — which further
contributes to the pressure on Department stores.
When looking for areas of growth, we see great growth opportunities for Swiss
FMCG products both domestically and abroad. The domestic economy is projected
to be strong in 2019, with private consumption likely to make gains. Analysts expect
the job market to strengthen further, with a moderate increase in real incomes —
therefore strengthening households’ purchasing power. Trends such as
convenience, sustainability and digitalization are increasingly important, and will
continue to shape today’s shopper behaviour. For manufacturers and retailers to
win in this environment, investing in these trends is integral for future growth. We’re
seeing quite a few retailers, and in particular Discounters, continuing to adapt to
these needs, optimizing their assortment, modernizing their shops and investing in
communication. Going forward, we see great growth potential for retailers that focus
on enjoyable shopper experiences, while providing a wide range of fresh food.
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) GDP Q3 2018 estimate
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Pedro Lima
Managing Director
Austria, Belgium,
Netherlands,
Switzerland
1.4
1.7
2.6
3.2 3.2
2.9
0.4 0.50.8 0.7
1.01.1
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85 87 87 86 87 87
98 97 99104
99106
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU CH
48
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TOTAL SWITZERLAND – CHANNEL PERFORMANCE
Warm weather conditions are the driving force for Q3 growth especially in Non-
alcoholic Beverages and Ice cream.
Supermarkets are superseding Hypermarkets as small formats such as Convenience
stores and Discounters grow quickly at the expense of Department stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
1.0%
0.1%
1.2%
2.2%
1.3%
-3.5%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets Supermarkets Department Store
25%
33%
24%
13%
4%
0.6%
1.5%1.0%
0.5% 0.5%
-0.1%
0.5%
1.1%1.8%
2.1%
-0.4% -0.5%
0.3%
-2.8%
1.9%
-0.5%
0.8%
-0.7%-1.2%
-0.6%
0.2%
1.0%1.4%
-2.3%
2.4%
-0.6%
1.3%
0.5% 0.6%
1.5%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
SwitzerlandUnit Value Growth Volume Growth Nominal Value Growth
49
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The warm weather benefited most categories while Home and Personal care
categories struggle due to cross border shopping and price competition.
TOTAL SWITZERLAND – SUPER CATEGORIES PERFORMANCE
TOTAL SWITZERLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
Medium to small manufacturers (11+) are driving the industry by nimbly
adapting to consumer trends with product innovations.
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Culinary Shelf-Stable & Other 18.7%
Butchery 16.3%
Dairy 13.4%
Fruits And Vegetables 12.5%
Alcoholic Beverages 7.4%
Confectionery 7.3%
Bakery 6.6%
Homecare/Pet Care 5.4%
Cosmetics 5.1%
Non-Alcoholic Beverages 5.1%
Sanitary 2.2%
1.0%
2.4%
-0.2%
1.7%
1.0%
1.8%
-0.4%
0.7%
0.0%
-0.7%
2.2%
0.3%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 6.7%
Top 6-10 3.5%
Top 11-30 7.3%
Top 31-100 8.4%
100+ 18.0%
Private Label 56.2%
1.0%
-1.0%
0.2%
1.4%
0.9%
1.5%
1.1%
50
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UNITED KINGDOM SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD
The months of July through September brought strong momentum to FMCG with
value growth of 3.5% and volume growth of 1.9%. It was, however, a quarter with
two distinct halves. July and August got off to a strong start thanks to the
unseasonably hot summer that had shoppers buying and consuming more,
particularly when it came to fresh foods and drinks, reaching a peak sales growth
of 5%. As we neared the end of September, caution crept in and spend was
reigned back prompting value growth to slow to just 1% at the end of the month.
During this time, the UK economy remained stable with FMCG inflation sitting just
below CPI and the 2% Bank of England target.
After the indulgent summer, shoppers have hit a tipping point and are starting to
hold back on household spend. The run up to the ‘golden quarter’ is critical and
while shoppers will continue to spend more on food and drink for the festive
season, the overall growth in FMCG will be less than last year.
While consumer confidence remained stable, there’s no doubt the next few
months will be challenging and manufacturers and retailers must ensure they’ve
got the right ranges available in store and online, with the right promotions to help
them engage with shoppers.
Given the uncertainty around Brexit, it’s likely that the trading environment will get
tougher over the next year. To maximise opportunities, brands and retailers must
think differently. This means moving beyond seeking efficiencies in the supply
chain through range rationalisation and price reductions to drive short term
volumes, to planning for innovation in categories where shoppers will continue to
spend more. Now is the time to work together to bring new, exciting and inspiring
products to market to capture a larger share of the shopper wallet.
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Paul Walker
Managing Director
United Kingdom & Ireland
8587 87
86 87 87
99 99
96 96
101102
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU GB
1.91.8
1.4
1.11.2
1.5
2.6 2.7 2.8
2.42.3 2.3
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
51
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The hot summer and the final World Cup celebrations were the driving forces
behind Q3 strong performance.
FMCG MARKET DYNAMICS
(weighted average)
TOTAL UK– CHANNEL PERFORMANCE
1.4% 1.7%
-0.4%
0.5%
3.2%
2.9%1.8% 2.0%
1.3% 1.6%
0.4%
1.1%
1.8%
-0.3%
0.4%
-0.9%
0.9%
1.0%
0.6%
1.9%
1.8%
2.8%
1.4%
0.1%
3.7%
2.1%
2.8%3.0%
1.9%
3.5%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
UK
Unit Value Growth Volume Growth Nominal Value Growth
DETAILS NOT AVAILABLE
52
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TOTAL UK – SUPER CATEGORIES PERFORMANCE
MAT Q3-2018 MAT Q3-2018
The unseasonably hot summer, al fresco dining and BBQs helped to propel key
categories’ growth.
TOTAL UK – MANUFACTURER PERFORMANCE - FMCG
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
FMCG Total 100.0%
Fresh Food 35.6%
Impulse 11.4%
Beer, Wine & Spirits 11.4%
Non Food 8.6%
Tobacco 8.2%
Ambient Grocery 7.8%
Health Beauty Toiletries & Baby 7.7%
Household & Pet 5.4%
Frozen 3.9%
2.8%
3.5%
4.6%
5.4%
-1.8%
0.3%
2.8%
0.1%
2.1%
6.4%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 53.0%
Top 6-10 8.9%
Top 11-30 15.8%
Top 31-100 13.8%
100+ 8.5%
2.3%
2.3%
0.6%
2.9%
2.7%
2.6%
0.00
Large manufacturers (Top 1-5) drove growth within the FMCG Industry during the
long hot Summer of 2018.
MAT Q3-2018 MAT Q3-2018
53
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THE BIG PICTURE: EUROPE EAST/CENTRAL
Daniel Chorbadjian
Managing Director
Eastern Europe
Roberto Pedretti
Managing Director,
Central & Southern
Europe
As we approach the festive season, consumers throughout Europe will be interacting with
products, brands, services, retailers and manufacturers as they make purchases for
themselves, friends and family. They will look for product information, compare prices,
seek inspiration for gifts, check product quality and do all sorts of evaluation before and
during the path to purchase.
How consumers are doing all of these shopping related activities is changing rapidly and
the importance of things like social media, peer reviews, cross border options and other
digital tools is becoming increasingly important. Over the last few months, Nielsen has
released some research that shines a light on how consumers are changing views and
behaviour. Some highlights for Europe are:
• 93% of European online consumers say they have made a purchase online - (93% for
West and East)
• Consumers are expanding the types of products they are buying online. The
percentage of consumers saying they had ordered restaurant deliveries online in
Eastern Europe grew by 3 percentage points to 27%, in Western Europe it grew by
2% points to 20%. .
• The evolution of category involvement across markets is following a similar pattern to
the most developed e-commerce markets in the world (South Korea and China) where
categories like Fashion, Travel, Books and Music having the highest penetration. As
consumers become comfortable and offers improve, they move into products like
Beauty, Packaged grocery, Baby care and even Fresh groceries. South Korea's online
sales now accounts for over 18% of total FMCG sales.
• The percentage of consumers saying that they buy FMCG online regularly is fairly low
in Europe, 5% in Western and 4% in Eastern Europe. However there are positive
intentions with 24% of Western European consumers say that they are willing in the
future and 34% of Eastern Europeans.
• There are certain strategies that would encourage consumers to buy FMCG online.
39% of Western European consumers said a money back guarantee would encourage
them to purchase, and 33% said free delivery between Tuesday and Thursday was
favourable. 50% of Eastern consumers said a money back guarantee was the best
strategy and 45% said free delivery over a certain purchase amount.
Although these are just a few insights in a report packed with information, it highlights
how willing consumers are to make their lives simpler and more convenient through e-
commerce and their behaviour is changing fast. As investment and strategy continues to
drive the growth of online, there is a danger that its acceleration off a low base may
catch some players unprepared in the future when it becomes a significant slice of the
FMCG pie and preparation for this outcome is well advised.
A copy of the "Connected Commerce" paper can be found here - If you would like to
discuss more regional or local insights on online attitudes and behaviours, please reach
out to your local Nielsen contact
54
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GDP and Inflation reflect % change per annum to Q3 2018 /latest available data
Source: Economist Intelligence Unit (EIU)/OECD/ local government sources
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
EUROPE CENTRAL & EAST
MARKETS AT A GLANCE
ECONOMIC PULSE OF CONSUMERS
AROUND EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in
collaboration with Nielsen measures perceptions of local job prospects,
personal finances and immediate spending intentions. Consumer confidence
levels above and below a baseline of 100 indicate degrees of optimism and
pessimism, respectively
A mixture of regional tensions and improving economic conditions have
been the main reasons for such a variation of Consumer Confidence
Index movement
CONSUMER CONFIDENCE INDEX
CONSUMER CONFIDENCE INDEX
Q3 2018Q3 2018 vs
Q2 2018
GDP
(annual %
growth)
Inflation
TURKEY 79 -9 19.4
KAZAKHSTAN 79 -5 4.1 6.0
HUNGARY 76 -4 5.0 3.5
RUSSIA 67 -3 1.3 2.9
SLOVAKIA 90 -3 4.5 2.7
POLAND 103 -2 5.7 2.1
CROATIA 78 -1 2.8 1.4
SERBIA 74 -1 3.7 2.4
GDP
(annual %
growth)
Inflation Q3 2018Q3 2018 vs
Q2 2018
3.0 3.5 BULGARIA 92 7
4.0 4.9 BELARUS 67 7
4.2 3.6 ESTONIA 88 7
4.3 5.0 ROMANIA 98 6
2.2 2.3 LITHUANIA 83 5
2.8 9.0 UKRAINE 64 2
4.8 2.9 LATVIA 82 2
2.3 2.4 CZECH REP. 109 1
1.7 0.9 GREECE 68 1
4.8 1.9 SLOVENIA 87 0
55
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3833
24
36 35
2934 34
22
40
20
4742
2731
3845 43
29
38 3731
28
2425
34
19
32
22
29
4339
27
43
16
29
37 3336
39
24
30
40
2828
25
18
4036 34 35
29 27 2833 33
27
0
10
20
30
40
50
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Putting into savings New clothes Holidays / vacations
22
10
26
7
19
28
1421 19
1117
9
2015
23
9 9
63
242126 26 25 28 26
17
29
19
33 3327
32
21 2328
37
4
20
0
10
20
30
40
50
60
70
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
The economy Health
Putting money into savings is a leading response, highlighting a cautious mindset
across Europe, followed by spending on holidays and clothes.
WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS?
WHO’S SPENDING, SAVING AND INVESTING?
Type of concern
After living expenses, how is spare money spent
Bars reflect Q3 2018. Table shows comparison to Q2 2018
EUROPE CENTRAL & EAST
MARKETS AT A GLANCE
Bars reflect Q3 2018. Table shows comparison to Q2 2018
CONSUMER SENTIMENTS IN
EUROPE
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
The economy 2 -2 -1 1 -6 -1 -1 4 7 2 -3 -1 0 0 6 1 -2 3 3
Health 1 2 3 -1 0 4 -4 2 -2 2 2 -1 -3 -5 -4 -3 2 1 2
EU BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Putting into savings -2 3 -4 -7 0 -5 0 1 2 5 -1 -11 7 1 -1 -1 0 -11 1
New clothes -1 1 -1 -6 1 -2 -3 0 -5 2 1 -4 0 2 3 -3 0 -17 -2
Holidays / vacations -3 2 1 -7 -1 0 2 -2 -3 2 -2 -7 0 3 -2 -3 -1 -17 -6
56
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2.3%
5.8%
3.6%
2.4%
0.5% 0.8%
4.2%
6.6%
2.6% 3.2%
2.0% 3.4% 3.6% 3.5%
2.0% 1.8%
18.9%
11.6% 1.8%
7.2%
-2.6%
1.5%
1.5%
1.2% 3.4%
-3.7%
2.6%
4.6%
3.9%
4.9%
1.3%
3.1%
1.6% 0.4%
2.1%
8.6%
4.1%
12.9%
1.0%
3.8%
2.0% 2.0%
7.6%
2.9%
5.2%
7.8%
5.8%
8.3%
4.9%
6.6%
3.6% 2.2%
21.0% 20.2%
BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
Unit value change Volume change Nominal growth
LOOKING THROUGH EUROPE CENTRAL & EAST
FMCG LENS
FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q3 2018
EUROPE EAST & CENTRAL – 18 countries
WHERE ARE THE FMCG GROWTH OPPORTUNITIES?
Average volume growth Q2 2018 & Q3 2018
Colour coding indicates growth or declining trend compared to same 6 month period year ago.
Average volume growth of Q2’18 & Q3’18 vs Q2’17 & Q3’17.
Avg. volume growth decreasing versus last period
Avg. volume growth increasing versus last period
RUSSIA (+3.8%)
CZECH REP. (-2.7%)
ESTONIA (+0.2%)LATVIA (+3.6%)LITHUANIA (+1.8%)
UKRAINE (+9.8%)
ROMANIA (+5.8%)
BULGARIA (+2.7%)
TURKEY (+2.4%)
GREECE (+1.6%)
POLAND (+2.8%)
SLOVAKIA (-1.8%)
HUNGARY (+3.4%)
BELARUS (+7.6%) KAZAKHSTAN (-3.4%)
*BL = Belarus
BG BL CZ EE GR HR HU KZ LT LV PL RO RS RU SI SK TR UA
SERBIA (+1%)CROATIA (+0.1%)SLOVANIA (0%)
57
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BELARUS SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: GDP and Inflation; & National Statistics Committee of Belarus
Vaios Dimoragas
Managing Director
Ukraine and Belarus
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Belarus continues to consolidate its recovery after the economic troubles of
2015 and 2016 - Belarus’ worst in two decades, caused by the steep drop in oil
prices as a result of Russia’s economic downturn at the time. Oil prices have
now picked up, providing a very welcome boost to the economy. Even though
Belarus is considered a small market for multinational companies (population
9.5 million) and has a highly regulated operating environment, the CEE survey of
business leaders completed by DT – Global Business Consulting, shows that
about 61% of companies in Belarus say that sales are growing this year. Taking
into account increasing wages (+13% in the first six months of the year),
household consumption also increased 4.6% last year versus 3.2% the year
before.
The improved macroeconomic conditions were reflected in consumer
confidence. The country remains stable as in the previous quarter, when it
reached the highest consumer confidence index since 2016 of 67. We see the
reflection of this confidence in the FMCG market that is growing in Q3 by the
highest pace this year. This is primarily due to growth of volume (7.2%),
although slightly down compared to Q2 while Value growth increased its pace by
1.4%, indicating an increase in prices: Q3 consumer prices have grown by an
average of 4.9% (according to the National Statistical Committee of Belarus).
In this context, we see opportunities for both short and long term growth in the
FMCG market. In the short term, manufacturers and retailers should capitalize
on the increased spending power of consumers and intensify their focus on their
value proposition, by using pricing and promotional support, while
simultaneously maintaining control of their bottom-line. For the medium and
longer term perspective, they should be alert and ready for lifestyle changes
leading to the growth in convenient products and offerings; a trend indicated by
faster growth of Modern Trade groceries and kiosks. Retailers should stay
prepared to cover the needs of consumers with the appropriate assortment and
shopper experience in these formats.
8187 87 86 87 87
55
63 60 6067 67
Q4 2016 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU BL
1.7
2.9
4.3
5.1
3.9 4.0
6.3
5.44.9 4.9
4.54.9
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
58
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TOTAL BELARUS – CHANNEL PERFORMANCE
Smaller store formats, keep growing this quarter, while increasing convenience
pushes retailers to deliver on consumer experience.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – YTD Q3-2018
Consumer confidence and increased spending power drives FMCG market growth.
4.5%2.6%
4.4%5.8%
6.9%
6.0%
8.2%7.2%
11.5%
8.6%
12.6% 12.9%
YTD TY Q1 18 Q2 18 Q3 18
BelarusUnit Value Growth Volume Growth Nominal Value Growth
11.5%
10.7%
15.4%
1.6%
15.5%
8.6%
Total FMCG Hyper/Supermarket (Food Categories) Groceries Modern Trade (Food Categories)
Groceries Traditional Trade (Food Cat) Kiosks + Other Markets (Food Categories) Drug Categories
54%
29%
6%3%
8%
59
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TOTAL BELARUS – SUPER CATEGORIES PERFORMANCE
TOTAL BELARUS – MANUFACTURER PERFORMANCE - FMCG
Top 10 manufacturers positively impacted by seasonality and dairy prices and
are growing faster than total FMCG market.
YTD Q3-2018 YTD Q3-2018
YTD Q3-2018 YTD Q3-2018
Growth of total FMCG is driven by super groups such as Beer, Beverages,
Snacks. Both value and volume growth of Beer and Beverages may be
connected with a seasonality and a prolonged summer for 2018.
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 29.2%
Top 6-10 12.6%
Top 11-30 27.2%
Top 31-100 18.9%
100+ 6.0%
Private Label 6.0%
11.5%
12.8%
13.6%
5.9%
12.9%
3.9%
34.4%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beer 24.1%
Beverages 20.8%
Dairy 16.4%
Chocolate 10.7%
Coffee 9.0%
Personal Care 5.7%
Snacks 5.1%
Candies 4.4%
Home Care 2.2%
Grocery 1.5%
11.5%
9.1%
19.4%
10.6%
7.6%
9.3%
8.1%
15.6%
8.6%
9.7%
9.6%
60
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COUNTRY HIGHLIGHTS
BULGARIA SNAPSHOT The Bulgarian economy continues to grow, however the short-term outlook may
appear less optimistic than the previous period. GDP grew by 3.0% in Q3,
representing the slowest pace in almost four years. This should not come as a
surprise considering the slow down across the entire EU and the economic
challenges in neighbouring Turkey. Household consumption continues to drive
the economy, as wages keep rising at an annual rate of almost 8%, but the
accelerating inflation due to higher fuel, food and energy prices absorbs a big
chunk of the additional disposable income.
The FMCG market follows the overall trend with value and volume growth rates
(4.1% and 1.8% respectively), returning to the recorded levels of almost two
years ago. It is still a positive picture though, with all channels and super
categories displaying higher sales than in 2017. An additional challenge this
summer came from the unusually cold and rainy weather in June and July that
prevented certain categories (such as beer and carbonated soft drinks) from
receiving an expected uplift from the Football World Cup. Rather paradoxically,
the combined market share of all alcoholic and non-alcoholic beverage
categories declined by 0.3% compared to Q2.
Moving forward, it is expected that the Bulgarian economy will keep growing
above 3% in 2018 and 2019, although this is now looking more uncertain as
forecasts are being revised slightly downwards. On the other hand, it is
particularly important to note that the Consumer Confidence Index (CCI) in Q3
rose to the highest levels (92) since the beginning of the crisis, indicating that
shoppers will likely remain the primary engine of the Bulgarian economy. With
Christmas just around the corner, deep diving into the seasonal assortment and
special offers that shoppers want and combining them with powerful in-store
execution, could make the difference for both retailers and manufacturers.
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 estimates
Svyatoslava Svyst
Managing Director
Bulgaria / RV Leader
Eastern Europe
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
85
87 8786
87 87
85
8889
81
85
92
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU BG
3.8
4.3
3.43.5
3.23.0
2.3
1.6
2.7
2.0
2.6
3.5
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
61
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TOTAL BULGARIA – CHANNEL PERFORMANCE
The FMCG market continues to grow but at a slower pace, reflecting the overall
macroeconomic slow down. Volume growth of 1.8% is the lowest since Q3 2016.
All channels display positive growth especially drug stores via store expansion and
large food stores via expanding into smaller formats.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q1-2018
7.1%
6.6%
7.1%
8.5%
6.6%
9.9%
Total FMCG Supermarkets/Hypermarkets Extra Large Food Stores
Large Food Stores Traditional Trade Drug Stores
41%
13%
19%
24%
4%
2.1%3.1%
1.5% 0.8%2.3%
3.2% 3.1% 3.3%3.3%
2.3%
3.5%
4.0%
2.6%3.1%
3.9%
4.6%
6.7%5.2%
3.7%
1.8%
5.6%
7.1%
4.1% 3.9%
6.2%
7.8%
9.8%
8.5%
7.0%
4.1%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
BulgariaUnit Value Growth Volume Growth Nominal Value Growth
62
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Alcoholic & Non alcoholic beverages lost share compared to Q2, impacted by
unusually cold weather in the first half of the summer.
TOTAL BULGARIA – SUPER CATEGORIES PERFORMANCE
TOTAL BULGARIA – MANUFACTURER PERFORMANCE - FMCG
The fragmented nature of the market is reflected with mid-smaller
manufacturers outperforming the bigger players.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled Products 25.5%
Alcoholic Drinks 18.4%
Confectionery 15.1%
Non Alcoholic Beverages 11.7%
Personal Care 7.1%
Household 7.0%
Salty Snacks 5.4%
Hot Beverages 4.3%
Shelf Stable Food 3.0%
Petfood 1.3%
Baby Categories 1.3%
7.1%
8.5%
5.3%
6.8%
5.7%
5.8%
7.9%
11.6%
5.6%
5.3%
18.1%
6.4%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.9%
Top 6-10 10.7%
Top 11-30 20.5%
Top 31-100 23.4%
100+ 25.5%
Private Label 3.0%
7.1%
6.7%
3.3%
8.5%
11.4%
4.6%
4.4%
63
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CROATIA SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: DZS – Croatian Bureau of Statistics. The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
Macroeconomic indicators are stable with average consumer prices rising while GDP
is growing by 2.8%. Inflation has balanced low volume growth and continues a trend
of modest results. If we add to the equation the fact that more and more Croats leave
their country (yearly loss of population is estimated to 1% which is equal to 50.000
less consumers each year), even with excellent tourist results during summer season
FMCG sector is not able to achieve higher growth rates.
Consumer optimism continues to be strong with an index of 78, four points higher than
the same period last year. This index is below the European Average, but the
increasing trend is encouraging. Even though job security is still the number one
concern, the balance between private and work life is second and health ranks third.
As average salaries increase by 3%, just a little above average inflation, there is little
encouragement to spend additionally on impulse or for comfort. Although shoppers
are experiencing better financial situations, they are also aware of price increases. As
a result of inflation, shoppers are focusing on only buying the essentials bringing
down their average basket spend. However, there are categories which are still
managing to find volume growth of more than 20% like frozen meals, frozen pastry,
and energy drinks driven by combinations of advertising campaigns, distribution and
promotional activity.
While average income is growing slightly ahead of average prices, and despite
growing tourist numbers, emigration has a stronger influence on consumption trends,
FMCG growth of 1.3% is a realistic reflection of today’s environment. Given the
current restrained conditions, it is recommended that retailers and manufacturers be
aware of consumers’ price sensitivity to increases and understand which products
consumers can justify paying a price premium or increase.
Miroslav Tasic
Group Managing
Director Adriatic
Region
85 87 87 86 87 87
7074 73
77 79 78
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU HR
3.03.3
2.0
2.5
2.9 2.8
0.1
-0.5
0.8 0.5
1.9
1.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
64
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TOTAL CROATIA – CHANNEL PERFORMANCE
Positive tourist visitor numbers contributed to consumption growth in Q3.
Discounters still dominate growth due to new store openings, premiumisation of
own labels and consumer-centred promotions with strong marketing campaigns
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3 2018
**Drugstore channel is included in Large groceries (part of Traditional Trade)
. .
FMCG excludes Tobacco/Cigarettes
* Universe update – limited backdata available
1.4%
1.3%
1.5%
-1.5%
-0.7%
11.5%
Total FMCG Hypermarkets Supermarkets
Traditional trade** Kiosks/Tobacconists Discounters
19%
33%
35%
1%12%
0.1%
2.4%2.5%
3.1%
1.5%
0.0%
1.5%
0.8%1.3%
-0.3%
1.9%
0.1%
0.3%
1.1%
-1.0%
1.2%1.4%
2.1%
4.4%
3.2%
1.8%
1.1%
0.5%
2.0%
MAT TY Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Croatia
Unit Value Growth Volume Growth Nominal Value Growth
65
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Frozen food above-average growth is due to price decreases answering
consumers’ need for convenience and value.
TOTAL CROATIA – SUPER CATEGORIES PERFORMANCE
TOTAL CROATIA – MANUFACTURER PERFORMANCE - FMCG
Private Labels, mainly driven in Discounter channel, account for over 90% of
overall FMCG growth.
MAT Q3 2018 MAT Q3 2018
FMCG: excluding Tobacco
.
MAT Q3 2018 MAT Q3 2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 26.9%
Meat and Meat Products 16.5%
Dairy Products 15.3%
Confectionery 10.5%
Personal Care 9.7%
Packed Food 8.5%
Household Care 4.5%
Frozen Food 4.4%
Salted Snacks 3.0%
Baby Food 0.8%
1.4%
3.7%
-0.1%
1.1%
-0.9%
-1.1%
1.3%
1.3%
5.5%
4.5%
-0.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.2%
Top 6-10 12.3%
Top 11-30 21.2%
Top 31-100 15.8%
100+ 11.7%
Private Label 18.8%
1.4%
-1.2%
2.5%
-0.5%
1.8%
-1.0%
7.5%
66
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CZECH REPUBLIC SNAPSHOT Q3 was another great quarter for the Czech economy. GDP grew 2.3%, which is slightly
slower than in Q2 and inflation has inched up (at 2.4%). Unemployment which reached
another historical record low 2.8% in October has become a big talking point. This level is
not only the lowest in the EU, but also among OECD countries with only Japan and Iceland
having similar levels. The shortage of candidates is contributing to slowing GDP due to
limitations in production but given this situation automation has become a top priority for
many companies in Czechia.
In this environment Czechs remain some of the most optimistic consumers in the EU, with
clear positive sentiment about job prospects and even half of consumers state they are now
in “ready-to-spend” mode. Low unemployment and rapidly growing wages are one of the
contributors to growing prices. While Czech shoppers feel this inflation, only 26% want to
switch to cheaper grocery brands. They would rather save money on electricity, gas or out-
of-home entertainment.
FMCG sales are stable with 1% in value as a result of the price led growth (3.5%)
compensated by volume declines (-2.6%). Hypermarkets (still the most important channel)
are losing sales – as a result of shoppers´ preference to reduce the time spent in stores due
to price increases. The current winning channels are Discounters given their size and
proximity are being able to provide convenient shopping options and Drugstores as
specialists with good assortment. Sales have been also significantly influenced by weather
this year with a long and hot summer a driver for Alcoholic Beverages (Beer), Non-Alcoholic
Beverages as well as Frozen (Ice-cream). From a manufacturer point of view, Private Labels
are growing after a long period of stagnation, supported by growth of Discounters.
Given the current situation it is a great time to think about price adjustments and promotion
optimization. Consumers are now more ready to accept these changes and those who play
this game smartly will have a big advantage in less favourable times. For longer term
planning there is a huge opportunity for both manufacturers and retailers to focus on
innovations – especially thinking about health, convenience and premium segments.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) OECD
Karel Tyra Managing Director,
Czech Republic
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
85 87 87 86 87 87
101 101 104108 108 109
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU CZ
4.9 5.1 5.0
4.1
2.4 2.32.22.5 2.6
1.92.3 2.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
67
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TOTAL CZECH REPUBLIC – CHANNEL PERFORMANCE
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
FMCG growth has been supported by increasing prices and consumers
trading up to more premium segments.
Hypermarkets are losing customers due to higher prices and less convenient
shopping.
NB: 2016 and 2017 updates due to product enhancements, universe update, implementation of new chains and new categories with full history
3.0%
-2.5%
6.9%
9.7%
1.9%
7.2%
Total FMCG Hypermarkets Supermarkets Discounters Traditional Trade Drugstores
38%
17%
22%
14%
8%
3.7%
4.1%1.1% 3.4%
4.7% 6.0%5.5%
3.7%
3.9%3.6%
0.0%
-1.1%
2.8%
-1.3% -0.3%-1.6%
0.0%
0.8%
-2.8% -2.6%
3.7%3.0%
3.9%
2.2%
4.4% 4.4%
5.5%
4.6%
1.0% 1.0%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Czech Rep.
Unit Value Growth Volume Growth Nominal Value Growth
68
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Private labels growth is supported by the strong performance of Discounters.
Hot and long summer drove the growth of Beverages and Ice-cream.
TOTAL CZECH REPUBLIC – SUPER CATEGORIES PERFORMANCE
TOTAL CZECH REPUBLIC – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 15.3%
Top 6-10 8.1%
Top 11-30 18.1%
Top 31-100 20.8%
100+ 18.3%
Private Label 19.5%
3.0%
3.4%
2.0%
3.2%
1.2%
2.3%
5.7%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy 18.9%
Beverages Alcohol 17.1%
Sweets & Treats 14.4%
Health & Beauty 11.9%
Culinary - Shelf Stable 9.6%
Beverages Non Alco 8.8%
Beverages Hot 4.0%
Home Care excl. Laundry 3.1%
Pet Care 2.3%
Home Care - Laundry 2.3%
Infant Care 2.0%
Frozen 1.9%
Culinary - Frozen 1.9%
Baking - Shelf Stable 1.5%
Culinary - Refridgerated 0.2%
3.0%
1.8%
8.6%
1.9%
2.6%
-1.3%
7.6%
0.1%
1.4%
2.1%
-0.2%
-0.5%
11.0%
-0.8%
-6.8%
3.8%
69
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ESTONIA SNAPSHOT The Estonian economy continues to perform well as the end of 2018 approaches,
with Q3 GDP growth at 4.2% according to Statistics Estonia. In the next two
years, it is anticipated the economy will maintain its upward trend, but at a slower
pace due to external factors. Personal finances should improve due to low
unemployment and convergence with other EU countries, while average salaries
grow by nearly 7% in 2018 and 6% in 2019. The unemployment rate stands at
5.2% in Q3 2018 and is expected to average 5% in the coming years. Inflation in
Q3 2018 was 3.6% driven by higher utility bills and the prices of fuel, alcoholic
beverages and tobacco. Inflation should slow in the coming months thanks to
decreased oil prices in global markets. Although consumer confidence is
relatively strong at an index of 88, people have been conservative in spending,
thus the increase in net income has not been reflected in consumption.
The FMCG market accelerated to 3.8% in Q3 2018 and for the first time over a
couple of years, volume also increased. Previous volume declines in FMCG was
predominantly driven by alcohol trade on the Latvian border due to increased
excise taxes in Estonia. Furthermore, exceptionally good weather in the summer
of 2018 supported sales of Non-Alcoholic Beverages and Alcohol. Chilled and
Frozen Food, Snacks and convenience categories like Baby Food and Pet Care,
also showed improvement. Consumer demand for convenience has increased
sales in the Convenience/Petrol channel by 14.4% and supermarkets strong
performance can be attributed to new store openings. On the whole, growth
prospects for the FMCG market remain positive thanks to increased net incomes
and consumer confidence. Companies with innovative products that leverage
convenience and health trends, should be well-positioned to succeed.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source: OECD & Statistics Estonia
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
5.3
4.5
5.3
3.6 3.7
4.2
3.1
3.7 3.8
3.13.3
3.6
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85
87 87
8687 87
83
8181 81
88 88
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU EE
70
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TOTAL ESTONIA – CHANNEL PERFORMANCE
A favourable labour market with improved income is supporting consumption.
Busy lifestyles and the demand for convenience is fuelling the growth of Petrol
Stations/Convenience channel. New store openings drives the performance of
Supermarkets.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
* Backdata not available due to Universe Update
3.0%
0.4%
4.3%
4.1%
1.3%
14.4%
0.1%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets/Discounters Superettes/Groceries Conveniences/Petrol Stations
Drug Stores+Pharmacies
23%
33%
30%
11% 1%2%
4.6% 5.7%7.0% 6.6%
4.7%
3.8% 2.4%
-1.5% -2.7% -3.7% -4.0%-1.9%
-1.1%
1.5%
3.0% 2.9% 3.3%2.6% 2.7% 2.8%
3.8%
MAT TY Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Estonia
Unit Value Growth Volume Growth Nominal Value Growth
71
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Exceptionally good weather in summer of 2018 supported sales of Non-
Alcoholic Beverages and enabled value growth for Alcohol.
TOTAL ESTONIA – SUPER CATEGORIES PERFORMANCE
TOTAL ESTONIA – MANUFACTURER PERFORMANCE - FMCG
Top 5 manufacturers which contribute 23.3% of value are in healthy growth.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 23.3%
Top 6-10 11.8%
Top 11-30 21.8%
Top 31-100 17.1%
100+ 18.3%
Private Label 7.8%
3.0%
3.5%
2.4%
3.0%
3.8%
3.2%
0.1%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 38.9%
Alcoholic Drinks 18.9%
Shelf Stable Food 9.0%
Personal Care 7.2%
Non Alcoholic Beverages 6.7%
Confectionery 6.1%
Household products 3.9%
Hot Beverages 3.2%
Snacks 3.2%
Pet Care 2.2%
Baby Food 0.8%
3.0%
4.7%
0.6%
0.9%
-0.1%
13.3%
-0.8%
1.9%
-2.1%
4.4%
2.7%
6.8%
72
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GREECE SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU). Q3 2018 GDP estimate
Vicky Grigoriadou
Managing Director
Greece
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
The Greek economy continued its positive economic momentum with 1.7%
growth in GDP for Q3 2018 with continued low inflation. Consumer optimism
continues its positive trend with the index at 68 points, a three year high.
Confidence improved across all three measures of job prospects, financial
security and now being a good time to buy. While job security still remains the
number one concern for one in three Greeks, it is considerably lower than it
was in the three years prior.
The FMCG market is performing considerably better in the last 12 months with
growth at 3.8% but has dampened slightly to 2% in Q3 driven by lower volume
consumption. Across the retail channels, Hypermarkets are performing
strongest at 23.4%, due to the re-activation of the ex-Marinopoulos stores by
Sklavenitis.
Increased prices from higher taxes have driven Non-Alcoholic drinks
performance while Household Care categories have also seen strong
volumetric growth driven by aggressive promotions and the implementation of
the eco-tax on retailer’s single use plastic bags. Whereas, categories such as
Detergents or Paper Products have failed to keep pace with the industry value
trend mostly because of intense and deep promotions, as well as the
introduction of cheaper product propositions in these categories.
Looking ahead towards the closing of the year, we expect the momentum we’ve
experienced until now will continue and FMCG growth will sit close to 3%, with
aggressive promotions driving volume growth for the remainder of the year.
1.5 1.5
2.0
2.5
1.8 1.7
1.3
0.8 0.8
0.3
0.70.9
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85 87 87 86 87 87
5260 60 61
67 68
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU GR
73
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TOTAL GREECE – CHANNEL PERFORMANCE
Whilst more moderate than previously, the positive trend continues in Q3,
due to the decelerated effect of the ex-Marinopoulos stores reopening.
Despite smaller share, Hypermarkets continue their momentum driven by a
specific key retailer.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
-1.0%
0.2%
-0.3% -1.2% -1.1%-1.4%
-0.1% -0.5%
0.3%
0.5%
0.9%3.7%
-2.6%
-3.9%
3.2%
6.6% 6.7% 5.2%1.7%
1.5%
-0.1%
3.8%
-2.9%
-5.1%
2.1%
5.2%
6.6%
4.8%
2.0% 2.0%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
GreeceUnit Value Growth Volume Growth Nominal Value Growth
3.8%
23.4%
2.9%
1.5%
0.1%
Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes
11%
38%37%
14%
74
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Higher prices in coffee categories has boosted sales within Non-Alcoholic
Drinks. The slower value growth in Paper Products stems from the
introduction of cheaper products, both branded and private label.
TOTAL GREECE – SUPER CATEGORIES PERFORMANCE
TOTAL GREECE – MANUFACTURER PERFORMANCE - FMCG
Smaller local suppliers continue to lead the growth while Private Label
faces challenges with increased promotional activity of Branded products
narrowing the price gap between them.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy & Refrigerator Cat. 24.3%
Grocery 23.0%
Non Alcoholic Drinks 12.2%
Health & Beauty 11.6%
Confectionery 9.0%
Household 6.3%
Alcoholic Drinks 6.2%
Detergents 4.2%
Paper Products 3.3%
3.8%
4.0%
3.2%
6.7%
2.1%
5.5%
5.7%
2.3%
1.3%
1.4%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.0%
Top 6-10 9.8%
Top 11-30 21.6%
31+ 33.6%
Private Label 15.0%
3.8%
2.7%
3.7%
2.2%
8.0%
-0.8%
75
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HUNGARY SNAPSHOT
The Hungarian economy continues its solid performance, with 5% GDP growth in
the third quarter versus the previous year. Double digit real wage growth and
stable consumer confidence suggests an overall optimism in the market. Despite
a slight decrease in terms of FMCG growth rates on a quarterly basis, MAT
growth remained quite strong (8% for Food and Drug alike), keeping the healthy
momentum going.
Consumer confidence declined slightly but remains at stable optimistic levels.
Optimism is reflected in spending attitudes. Albeit the Hungarian consumer still
pre-plans shopping and is highly price aware, purchasing habits are way laxer,
especially when it comes to premium products. Indulgence, health and
convenience serve as main drivers behind excessive spending, which are also
manifested and detectable on category and/or segment level, with noticeably
higher growth rates than the market average.
Channels, including well-performing Discounters and slightly lagging
Hypermarkets brought about more favourable results in Q3 compared to Q2
2018. The latter experienced a more fast-paced growth regarding top and smaller
categories alike in the period in question. Generally, value for money offerings are
proving popular for these channels and demonstrates the range of consumer
attitudes to spending in the marketplace. Private label and branded products
serve as drivers behind this growth, with private labels generally outpacing the
growth of branded offers, especially in Discounters and Drug stores.
Last year, Q4 2017brought a really strong uplift for the Hungarian FMCG.
Retailers and manufacturers ought to seek ways to serve consumers
strengthening demand for premium products (with a special focus on indulgence,
convenience and health) to conclude a strong and rewarding fourth quarter in
2018.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 OECD
Kateryna
Edelshtein
Hungary Market
Leader Buy & Watch
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
85 87 87 86 87 87
7076 74
78 8076
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU HU
4.0
4.4
5.0 4.8 4.75.0
2.12.4 2.3
2.0
2.7
3.5
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
76
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TOTAL HUNGARY – CHANNEL PERFORMANCE
Despite the slight decrease in the momentum between Q2 and Q3, the
annual performance of the Hungarian FMCG market is still accelerating.
Beside Discounters, Hypermarkets increased their growth rate since Q2
with a focus on convenience and strong Private label propositions.
FMCG MARKET DYNAMICS OFFLINE
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
8.0%
3.4%
4.1%
20.1%
3.1%
11.2%
5.4%
Total FMCG Hypermarkets Large Organized Discounters
Small Organized Drug Stores Independent Stores
25%
14%
24%
17%
8%
12%
3.7%
4.4%
1.4%2.0%
2.8%
5.0% 4.5%3.8% 4.2%
4.2%
1.4%
3.6%
3.4% 1.5%
3.7%
0.3% 3.7%
4.5%3.6%
3.4%5.0%
8.0%
4.8%
3.5%
6.5%
5.3%
8.2% 8.3%7.8% 7.6%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Hungary
Unit Value Growth Volume Growth Nominal Value Growth
77
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The smaller manufacturers lag behind the market, while Private Label
makes considerable headway with good quality and value.
TOTAL HUNGARY – SUPER CATEGORIES PERFORMANCE
Premiumization is a major driver as healthy, convenient or indulgent
categories and segments outpace average market growth.
Total FMCG includes Private label but Private label is not included in manufacturer tiers
TOTAL HUNGARY – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.3%
Top 6-10 11.6%
Top 11-30 21.7%
Top 31-100 22.8%
100+ 23.6%
8.0%
7.6%
8.1%
7.8%
6.7%
4.6%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy Products 15.2%
Processed Meat 12.9%
Non Alcoholic Beverages 11.8%
Alcoholic Beverages 9.9%
Personal Care 9.0%
Dry Grocery 8.0%
Cleaning / Household 6.3%
Confectionery 5.5%
Hot Beverages 3.6%
Snacks 3.1%
Frozen Foods 3.0%
Household Paper 2.9%
Petfood 2.8%
Biscuits/Wafers 2.7%
Breakfast 2.0%
Baby Care 1.3%
8.0%
6.5%
7.2%
12.4%
10.7%
8.1%
2.3%
9.1%
7.9%
4.7%
12.4%
11.0%
5.9%
8.4%
4.8%
8.2%
7.6%
78
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KAZAKHSTAN SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local statistical office
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Kazakhstan continued its positive economic momentum with a 4.1% growth in
GDP for Q3 2018 the same time last year. This healthy economic environment
contributes to an optimistic consumer base with a Consumer confidence index of
79 points for the quarter.
The FMCG market also showed an increase in Q3 versus the same quarter a
year ago by 2.9%. However, volume loss -3.7% was offset by increased unit
prices 6.6%. Moreover, the market was affected by price inflation which resulted
in a drop of real income as well as consumers willingness to proceed in saving
money. That been said, the FMCG market is still hitting positive growth of 4.3%
for the latest year driven by some of the biggest value contributors, such as
Large stores (15.2%) and Medium stores (6.8%).
Changing consumer preferences in channels as well as increasing promotional
pressure, continues to impact Drug stores (-9.7%) and Small stores (-5.3%).
Only Alcohol categories experience negative performance for the year in Q3,
while meanwhile the smallest value contributors: Home care, Pet food, Baby
food and Care are thriving. Furthermore, Tobacco and Beverages – two super
categories taking the lion-share of the market, have managed to maintain
significant growth 5.4% and 3.8% respectively. Main growth in the market is
driven by Top 10 manufacturers which account for over 50% of sales.
Despite short term concerns on the monetary front and price fluctuation in the oil
market, the country's economy continues its positive development. Slowing
inflation reveals opportunities to ease consumer concerns over prices. As
consumers are looking for ways to save, now is the best time to offer value for
money propositions and ensure effectiveness in trade spending via targeted
promotions.
5.3
4.2
3.1
4.1 4.3 4.1
7.67.0
7.4
6.66.2 6.0
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85
87 87
8687 87
79
83
81
79
84
79
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU KZ
79
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4.3%
15.2%
6.8%
-5.3%
-9.7%
5.1%
Total Kazakhstan Urban Large Stores Medium Stores Small Stores Drug Stores Other*
TOTAL KAZAKHSTAN – CHANNEL PERFORMANCE
Continued inflationary pressures have started to impact FMCG in the last two
quarters with consumption declining.
Changing consumer’s preferences in channels as well as increasing promotional
pressure continues to impact Drug stores and Small stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
* Other includes: Kiosk s/Pavilions, Open markets, Petrol Stations, Tobacconist
35%
20%
34%
3%
8%
9.7%
6.0%
13.9%
10.6%
7.5%
5.8% 6.0%5.5%
5.2% 6.6%
-1.8% -1.7%
-1.4%
-2.4%-2.3%
0.0% 0.3% 0.4%
-3.2% -3.7%
7.9%
4.3%
12.5%
8.2%
5.1% 5.8%6.4% 5.9%
2.0%2.9%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Kazakhstan
Unit Value Growth Volume Growth Nominal Value Growth
80
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Home care, Pet food, Baby food and Care are thriving thanks to heavy
promotion in key accounts.
TOTAL KAZAKHSTAN – SUPER CATEGORIES PERFORMANCE
TOTAL KAZAKHSTAN – MANUFACTURER PERFORMANCE - FMCG
Main growth in the market is driven by Top 10 which accounts for 55% of value
contribution.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 40.3%
Top 6-10 14.8%
Top 11-30 4.1%
Top 31-100 0.4%
100+ 40.3%
4.3%
2.3%
7.7%
1.1%
6.1%
5.4%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 25.5%
Tobacco 21.7%
Dairy 14.3%
Personal Care 10.2%
Food 9.8%
Confectionery 8.0%
Alcohol 6.2%
Home Care 2.6%
Baby Food 1.3%
Pet Food 0.3%
Baby Care 0.1%
4.3%
3.8%
5.4%
10.2%
2.3%
3.4%
5.4%
-9.2%
7.7%
8.7%
24.7%
15.0%
81
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LATVIA SNAPSHOT The Latvian economy expanded in Q3 by 4.8% year-on-year compared to the
previous quarter led by the booming construction sector, followed by retail trade
and industrial sectors. Consumer confidence remained relatively stable but is
lower than the EU average as the unemployment rate reached 7.0%, although
0.7% lower when compared to the previous quarter.
The FMCG market saw value growth of 7.8%, which was driven mainly by an
increase in volume of products sold (4.6 %) and unit price increases (3.2%). Solid
growth was evident across all major channels, largely driven by Convenience/
Petrol Stations (21.9%) and Pharmacies (17.9%) that are increasing and evolving
the products they offer (especially fresh food in convenience stores).
In addition, a prolonged summer season with record temperatures, had a positive
impact on consumer consumption habits. The biggest value growth was noted in
the Non-Alcoholic Beverages category (13.1%), followed by Alcoholic Drinks
(8.2%), Baby Food and Pet Care (each accordingly driven by 7.5%).
With current consumer trends for healthy products and convenience gathering
momentum, retailers are transforming their store formats, utilizing these trends to
attract customers to healthy product sections. Furthermore, new smaller formats -
mini and express stores - have opened in office areas or very dense city centres,
focusing on daily convenience for shoppers and offering an assortment of fresh
food and ready-to-eat meals. With interesting layouts and self-checkouts, these
stores seem to be adding value to everyday consumer lifestyle and to their brand
outlook.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Ilona Lepp
Managing Director
Baltics
Source: OECD The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
4.9
6.2
4.75.2
4.2
4.8
3.1 2.92.6
2.02.4
2.9
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85 87 87 86 87 87
78 7873
8680 82
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU LV
82
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TOTAL LATVIA – CHANNEL PERFORMANCE
The FMCG market continued its recovery with positive volume growth for the
third consecutive quarter as the improving economy led to increased demand.
Convenience/Petrol Stations enjoyed solid growth due to strong sales in
focus categories such as Beverages, Ice Cream and Chocolate Count lines.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
* Backdata not available due to Universe Update
2.8%
4.6% 4.3%3.4%
1.6%2.2%
3.2%
2.3%
0.6%
-0.2%
0.4%
2.0%
2.7%
4.6%5.1% 5.1%
4.0% 3.8% 3.5%
4.9%
7.8%
MAT TY Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
LatviaUnit Value Growth Volume Growth Nominal Value Growth
5.1%
4.4%
3.6%
6.7%
21.9%
17.9%
Total FMCG Hypermarket/Large Supermarkets+Drugstores
Small Supermarkets/Discounters Superettes/Groceries
Conveniences/Petrol Stations Pharmacies
41%
35%
20%
3%1%
83
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Unusual and prolonged Latvian Summer drove Beverage sales, as well as
Pet Care and Baby Food categories.
TOTAL LATVIA – SUPER CATEGORIES PERFORMANCE
TOTAL LATVIA – MANUFACTURER PERFORMANCE - FMCG
Top 6-10 manufacturers saw strong growth, as did smaller manufacturers
thanks to balanced product portfolios and competitive price points.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 18.3%
Top 6-10 9.5%
Top 11-30 19.1%
Top 31-100 21.6%
100+ 22.0%
Private Label 9.5%
5.1%
3.5%
9.3%
3.9%
8.4%
3.9%
1.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 33.0%
Alcoholic Drinks 20.0%
Shelf Stable Food 11.2%
Personal Care 7.7%
Non Alcoholic Beverages 7.5%
Confectionery 6.1%
Household products 4.0%
Hot Beverages 3.9%
Snacks 3.4%
Pet Care 2.2%
Baby Food 0.9%
5.1%
6.1%
8.2%
-2.0%
3.9%
13.1%
1.2%
2.2%
-2.9%
7.3%
7.5%
7.5%
84
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LITHUANIA SNAPSHOT
Lithuania’s economic performance has slowed slightly in Q3 2018, with GDP at
2.2% compared to growth in Q2 of 3.7% due to agricultural, forestry and fishing
sectors impacted by recent droughts. However, a low unemployment rate, increasing
wages and easing inflation will help improve the retail sector’s prospects and
accelerate internal consumption. This is evident with increased consumer optimism
with the Consumer Confidence Index increasing to 83 points, up five points from Q2
as a result of improvements in all three measures but particularly from more positive
sentiments about personal finances and it being a good time to buy.
The FMCG industry showed strong value growth this quarter up 5.2%, coming from
both volume improvements and higher average unit prices. Unusually long and
record high summer temperatures have driven the sales momentum for seasonal
categories such as Chilled and Frozen products (7.4%) mainly due to the Ice Cream
category, Non Alcoholic Beverages (14.5%), Snacks (5.5%) and even Household
products (5.5%) benefited from the weather encouraging more washing and
cleaning! In seasonal categories, major brands are driving growth while Private Label
stabilises. At the same time, medium and smaller size manufacturers have seen
faster growth, by tapping into consumers quest for innovative products and healthy
options, more so than some of the Top 5 players.
Shoppers need for convenience has been supported by new store openings in
Convenience/Petrol Stations with growth of 24.9% and Large Supermarkets by 9.1%
in the last 12 months. The Pharmacy sector has also seen strong growth with a focus
on premium assortment and healthy options tapping into consumers’ increasing
purchasing power and optimism. In context of this positive retail environment, now is
the time to leverage the positive FMCG momentum and review promotional
effectiveness as well as invest in innovations that address consumers’ evolving
needs and concerns towards health and convenience.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Ilona Lepp
Managing Director
Baltics
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Source: OECD
4.1
3.63.8
3.53.7
2.2
3.5
4.44.2
3.4
2.62.3
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
8587 87
8687 87
73
7779
7778
83
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU LT
85
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TOTAL LITHUANIA – CHANNEL PERFORMANCE
Unusually long and hot summer boosted sales of seasonal categories
and strengthen overall FMCG market
New openings, changing shopper preferences and an increased need for
convenience, has impacted the growth of Large Supermarkets and
Convenience/Petrol station.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
* Backdata not available due to Universe Update
4.0%
1.9%
9.1%
1.2%
4.6%
24.9%
1.2%
10.4%
Total FMCG Hypermarkets Large Supermarkets
Small Supermarkets/Discounters Superettes/Groceries Conveniences/Petrol Stations
Drug Stores Pharmacies
22%
24%37%
10%
1%3%
2%
4.4%
7.2%7.3% 7.5%
4.7%
1.9% 2.6%
-0.4%
-4.7%
-2.7% -2.6% -2.2%
1.2%
2.6%4.0%
2.5%
4.6% 4.8%
2.6% 3.1%
5.2%
MAT TY Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Lithuania
Unit Value Growth Volume Growth Nominal Value Growth
86
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Seasonal categories such as Ice Cream, Non-Alcoholic beverages, Snacks
and Household products were boosted due to the unusual weather conditions
TOTAL LITHUANIA – SUPER CATEGORIES PERFORMANCE
TOTAL LITHUANIA – MANUFACTURER PERFORMANCE - FMCG
Brands domination in seasonal categories have limited Private Label’s growth.
Medium and small manufacturers use momentum to gain consumers‘ attention.
MAT Q3-2018 MAT Q3-2018
.
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 18.2%
Top 6-10 9.2%
Top 11-30 21.4%
Top 31-100 22.6%
100+ 19.5%
Private Label 9.2%
4.0%
4.2%
6.1%
4.8%
4.8%
2.4%
0.8%
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Chilled and Frozen products 29.2%
Alcoholic Drinks 23.7%
Shelf Stable Food 10.4%
Personal Care 10.0%
Non Alcoholic Beverages 7.0%
Confectionery 5.6%
Household products 4.2%
Hot Beverages 4.2%
Snacks 3.2%
Pet Care 1.8%
Baby Food 0.7%
4.0%
7.4%
1.3%
-1.5%
2.3%
14.5%
0.2%
5.5%
-1.0%
5.5%
9.6%
6.3%
87
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POLAND SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 OECD
Karolina Zajdel-
Pawlak
Managing Director,
Poland
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen.
CCI not available for Q1 and Q2 2017
The Polish economy performed well in the first three quarters of 2018 with 5% GDP
year on year increase across the first three quarters and the full year GDP outlook
accounting for 5% as well. Excellent macro-economic conditions are primarily driven
by private consumption fuelled by social transfers combined with rise of actual
purchasing power coming from record-low unemployment (3.6%) translating into
wages increase (7%) coupled with very low inflation (2%).
These factors are well reflected in the continued high level of optimism feel by Poles
(CCI at 103 in Q3 2018 and well above European average) and this is translating into
further growth of FMCG categories sales.
FMCG nominal value growth rate in Q3 2018 reached 5.8% and it was to a major
extent driven by volume growth, reflecting the households’ expenditure increases.
The value growth figure is in turn in line with the inflation rate of 2%. Rising
disposable incomes positively impacted all of FMCG categories but more so Food
categories than Personal and Household care. Overall FMCG basket sales growth
outperformed levels recorded in the first half of the year (5.8% in Q3 vs 3.4% in Q2)
thanks to the exceptional summer season (particularly boosting Non-Alcoholic
Beverages and Ice Creams sales (respectively: 14.5% and 23% year on year).
However, not all retail formats benefitted from the positive conditions. Large format
stores have been majorly impacted by the Sunday trade ban introduced in 2018.
Discounters are the forefront runners (7.8% growth) as they counteracted the
unfavourable regulations with highly attractive pricing and promotional strategies on
remaining week-days. Smaller format outlets have also enjoyed robust sales growth
benefiting from the proximity and convenience they offer.
Polish consumers can increasingly afford more conscious shopping choices
reflecting the rising focus on health, environment friendly options and convenience.
Players that tap into those needs may expect continued revenue growth in the fertile
Polish environment.
8187 87 86 87 8788
104 104 103 105 103
Q4 2016 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU PL
4.2
5.5
4.4
5.0 5.0
5.7
1.8 2.02.3
1.51.8
2.1
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
88
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TOTAL POLAND – CHANNEL PERFORMANCE
Positive consumer sentiment and spending intentions is helping drive
volume in FMCG.
Discounters and Small Format drove sales value growth. Petrol Stations
showed significant sales increases fuelled by Sunday trade ban.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
5.3%
-0.1%
2.3%
7.8%
6.0%
5.7%
Total FMCG Hypermarkets Supermarkets Discounters Drugstores Small Format
10%
14%
32%7%
36%
2.6% 2.1% 2.0%2.0%
2.0% 3.0%2.1%
0.9%1.6%
2.0%
1.3%3.2%
2.9%
-1.2%
3.6%1.6% 3.8%
5.0%
1.8%
3.9%4.0%
5.3%4.9%
0.7%
5.6%
4.6%
5.9% 5.9%
3.4%
5.8%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Poland
Unit Value Growth Volume Growth Nominal Value Growth
89
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SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Alcoholic Beverages 23.4%
Culinary 16.3%
Non-Alcoholic Beverages 14.5%
Dairy 13.7%
Confectionery 11.4%
Cosmetics Categories 8.5%
Paper Sanitary Hygiene & Other 4.6%
Home Categories 4.4%
Frozen Products 3.3%
5.3%
4.7%
2.2%
8.0%
6.1%
6.1%
4.4%
3.1%
4.6%
13.4%
Manufacturers beyond the top 100 are growing at a similar pace as the Top
10 players.
Exceptional summer boosted 2018 sales of Beer, Beverages and Ice Cream
which made a high contribution to FMCG basket growth.
TOTAL POLAND – SUPER CATEGORIES PERFORMANCE
TOTAL POLAND – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.1%
Top 6-10 10.9%
Top 11-30 19.9%
Top 31-100 16.9%
100+ 17.2%
Private Label 19.1%
5.3%
6.0%
6.2%
4.9%
6.2%
6.1%
2.9%
90
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ROMANIA SNAPSHOT The Romanian economy maintains a steady positive trend in Q3 2018, with
4.3% growth in GDP compared with the same period last year, while inflation
stopped increasing and dropped to 5%. The wage increases continued for
various categories of state employees, while during the summer season,
many of them also benefited from holiday vouchers that led to a boost in
local tourism too. Thus, based on this positive financial wave combined with
a very low unemployment rate, it is no real surprise that the Consumer
Confidence Index registered a new spike, up to 98 in Q3 2018.
Meanwhile, FMCG nominal growth reached 8.3% in Q3, with volume
increases contributing 4.9% and the rest coming from inflationary prices.
Hypermarkets register again the slowest progression, while the trend
towards convenience drives higher increases in the proximity formats.
Supermarkets continue to grow in double digits, supported by their numeric
expansion, while Traditional Trade’s dynamic is also supported by an
increase in lower wages and an appetite for quality and convenience.
Beverages remain the most dynamic category, while Household and
Personal Care products display impressive increments; only fresh food
keeps pace with these growth levels.
Romanian consumers seem eager to consume. However, economists and
private companies are not so optimistic. Inflation is high, infrastructure
investments are low and the usage of the free European funds have not
leveraged well. Considering the very bad results of the Cooperation and
Verification Mechanism evaluation recently received from the EU
Commission, Romania’s external loans may also become much more
expensive. These facts are revealing a different perspective over the
Romanian economic environment and industry players might be well served
to be prepared if consumers become sensitive to changing conditions and a
high inflationary environment.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 2018 National Statistics Office
Luca De Nard
Managing Director
Romania
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
8587 87
86 87 87
101
98
9091 92
98
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU RO
6.1
8.8
6.7
4.0 4.1 4.3
0.7 1.5
3.1
4.75.3
5.0
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
91
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TOTAL ROMANIA – CHANNEL PERFORMANCE
Consumption continues to be the key growth trigger, as inflationary
prices stabilise
With the Hypermarkets slowing down, market growth is driven by
convenience/proximity channels (Supermarkets and Traditional Trade).
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
8.9%
3.6%
17.4%
8.6%
9.2%
6.5%
10.0%
Total FMCG Hypermarkets Super/Minimarkets
Discounters Traditional Trade Pharma/Cosmetics
Petrol Stations/Convenience
28%
19%
11%
40%
1%1%
2.6%
5.4%
0.3% 1.2% 1.7%
4.6%5.5%
5.1%
2.9% 3.4%
4.7%
3.5%
8.8%5.4%
4.9%
2.3%
3.8% 3.5%6.8%
4.9%
7.3%
8.9% 9.0%
6.6% 6.6% 6.9%
9.2%8.6%
9.8%
8.3%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
RomaniaUnit Value Growth Volume Growth Nominal Value Growth
92
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Main food categories continue to slow down the growth, while
Beverages and Fresh are highly dynamic.
TOTAL ROMANIA – SUPER CATEGORIES PERFORMANCE
TOTAL ROMANIA – MANUFACTURER PERFORMANCE - FMCG
Smaller manufacturers outside the Top 10 are better at keeping pace
with consumers’ evolving buying behaviour.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dry Grocery 29.2%
Fresh Food 22.6%
Beverages - Alcoholic 14.5%
Beverages - Non Alcoholic 13.5%
Personal Hygiene/Cosmetics 8.5%
Household Care 7.8%
Frozen Food 3.0%
Non Food 0.9%
8.9%
7.0%
9.3%
10.2%
11.6%
9.1%
9.7%
7.2%
-2.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 16.1%
Top 6-10 9.2%
Top 11-30 18.4%
Top 31-100 20.4%
100+ 23.5%
Private Label 12.4%
8.9%
8.9%
7.0%
11.6%
10.2%
7.8%
6.2%
93
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Russia’s GDP slowed down in Q3 2018 to 1.3% after growing 1.9% in Q2, as per
Rosstat, Russia’s official statistics agency. The slowdown was attributed to the
heated economy in Q2 by the FIFA World Cup, lower production in agriculture and
higher base of Q3 2017. For Russia’s FMCG market, Q3 was quite positive with
6.6% value growth and volume consumption still driving a significant portion of it. In
annual terms, the year to Q3 2018 was the period with highest volume contribution
since 2013.
However at the same time consumer confidence dipped back three points to 67
reflecting historical lows which could be influenced by rouble exchange rate
volatility in August and expectations of price increases that will follow after the VAT
is increased 2 percentage points in 2019.
With Russian consumers’ real income unlikely to grow in the coming months, along
with low confidence, it is likely that consumers will continue to spend cautiously. In
addition, the increase of the VAT can be sensitive for categories where consumers
are especially drawn to price in their decision-making. Manufacturers and retailers
should look carefully at their pricing strategies and build on emotional engagement
and uncommon ways to communicate their brands’ value. By showcasing their
products value to command a price premium will tap into Russian consumers
willingness to spend a little more on impulse FMCG. E-commerce represents
another big growth opportunity, with online sales of FMCG forecast to more than
double its size by 2020 from the current 1%.
With more Russians demanding convenience, more FMCG consumption will shift
to online, and it is no longer the domain of only non-food categories. Major online
retailers are doubling the size of their warehouse facilities year over year,
expanding their assortment to meet specific consumer product needs (organic,
non-gluten, Asian cosmetics etc.) and consumption formats such as meal kits in
their offerings. Tapping into e-commerce opportunities will mean significant
advantages for brands in the near future.
RUSSIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 Rosstat
Alexander Kotsuba,
Managing Director
Nielsen Russia
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
85 87 87 86 87 87
70 70 69 68 70 67
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU RU
2.42.1
1.01.3
1.9
1.3
4.3
3.3
2.52.4 2.4
2.9
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
94
Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
TOTAL RUSSIA – CHANNEL PERFORMANCE
Although price growth accelerated a bit in Q3 due to seasonal reasons,
volume consumption grew for the fifth quarter in a row.
Modern trade continues to grow with a focus on delivering convenience.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
5.3%
8.0%
-1.7%
Total FMCG Modern Trade Traditional Trade
75%
25%
4.7%
2.1%
7.4%6.0%
3.6%
1.9%
1.3%
1.5% 2.1%3.5%
-1.6%
3.2%
-3.0% -3.3%
-0.3%
0.2%
2.8%
2.3%
4.6%
3.1%
3.1%
5.3%
4.4%
2.7%3.3%
2.1%
4.1%3.8%
6.7% 6.6%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Russia
Unit Value Growth Volume Growth Nominal Value Growth
95
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PL continues to face challenges with the only region seeing positive PL growth
is in the Far East, where there is still opportunity to expand its footprint.
The warm summer helped ice-cream performance Q3 in both volume and value.
TOTAL RUSSIA – SUPER CATEGORIES PERFORMANCE
TOTAL RUSSIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Other Food 14.8%
Tobacco 14.7%
Dairy 12.5%
Non-Alcoholic Beverages 11.9%
Beer 8.5%
Personal Care & Make-Up 7.1%
Vodka 6.7%
Sauces & Grocery 5.9%
Other Alcohol 4.8%
Home Care 3.1%
Pet 2.9%
Baby Food & Infant Formula 2.2%
Ice Cream 2.0%
Frozen Food & Fish 1.6%
Baby Care 1.2%
5.3%
5.1%
10.7%
2.1%
7.4%
6.6%
3.2%
-4.1%
-0.1%
12.4%
1.4%
13.4%
5.3%
16.3%
6.6%
-2.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 20.1%
Top 6-10 11.9%
Top 11-30 17.6%
Top 31-100 16.9%
100+ 29.6%
Private Label 4.0%
5.3%
8.4%
3.2%
4.1%
6.0%
5.6%
-1.8%
96
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The local economy recorded a GDP growth of 3.7% year-on-year in Q3, stimulated
by higher public investment and consumption. Inflation, though slowly building, is
still contained. The GDP growth projection for 2019 has been revised upward to
4.2%, supported by a rise in both public and private investment. Economic progress
continues to be felt by consumers too, with the Consumer Confidence Index
maintaining its historical high for the last three. In line with strong optimism, the
number of shoppers who actively search for promotions as well as the number of
shoppers who buy more private labels has declined and monthly spending is
increasing.
FMCG in Serbia is also showing healthier volume growth, but inflation remains a
strong driver of value growth. While the Tobacco industry remains the number one
value contributor, but one of the biggest value drivers in Q3 was recorded for
Alcoholic Beverages, influenced by the warmest April ever recorded in Serbia.
Discounter Lidl opened its first stores in November 2018, which attracted big media
attention and popularity with consumers. The retail market was well prepared for this
and is actively working on increasing the competitiveness of its stores to face this
new entrant.
Looking at retail channels, we can see smaller format stores (i.e. large and medium
groceries) recording significant growth in Q3 with more shoppers switching from
monthly to weekly or bi-weekly store visits. Proximity of stores remains a key driver
of store choice, heavily influencing the growth of smaller format stores. The quest for
convenience is becoming a stronger consumer need and with the increase in
employment and wages, Serbian shoppers are ready to spend more on anything
that saves them time and effort.
SERBIA SNAPSHOT
COUNTRY HIGHLIGHTS CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government source Q3 2018 estimates
Miroslav Tasic
Group Managing
Director Adriatic
Region
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
1.6
2.3 2.4
4.9 4.8
3.73.7
3.0 2.9
1.6 1.7
2.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85 87 87 86 87 87
69 69 6974 75 74
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU RS
97
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TOTAL SERBIA – CHANNEL PERFORMANCE
Positive economic conditions and increasing disposable income is
contributing to a sustained period of value growth.
Shoppers switching from monthly to weekly shopping as well as the
proximity of stores are influencing the growth of smaller format stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q2-2018
3.8%
1.4%
10.0%
1.9%
-3.1%
11.9%
8.2%
10.0%
Total FMCG Hyper/Super Large/Medium Groceries Small Groceries
Kiosks/ Pavillions Drug Stores Petrol Stations Pharmacies
28%
29%
22%
13%
4%3%
0%
2.5%
3.0%
4.6%3.7%
3.6%
3.4%
3.9%
3.3%
2.9%3.6%
0.5%
0.8%
-0.1%
0.6%
-1.2%-2.0%
-2.0%
-0.5%
0.7%
1.3%
2.9%
3.8%
4.4% 4.2%
2.4%
1.3%1.9%
2.9%
3.6%
4.9%
MAT YA MAT TY Q1 16 Q2 16 Q3 16 Q1 17 Q2 17 Q3 17 Q1 18 Q2 18
Serbia
Unit Value Growth Volume Growth Nominal Value Growth
98
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Beverages grew significantly, primarily due to the warmest April ever
recorded in Serbia.
TOTAL SERBIA – SUPER CATEGORIES PERFORMANCE
TOTAL SERBIA – MANUFACTURER PERFORMANCE - FMCG
Smaller businesses are growing faster, with the help of new
government incentives and bureaucracy improvements to help small
businesses and entrepreneurs.
MAT Q2-2018 MAT Q2-2018
MAT Q2-2018
MAT Q2-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Tobacco 29.5%
Food Fresh Refrig. 14.7%
Beverages Non-Alcoholic 13.7%
Confectionery And Snacks 11.8%
Beverages Alcoholic 8.4%
Personal Care 7.2%
Food Shelf Stable 6.6%
Household Products 5.0%
Frozen 2.7%
Pet Food 0.3%
3.8%
1.9%
4.2%
5.5%
4.5%
8.2%
5.7%
-0.4%
1.9%
7.9%
9.8%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 33.8%
Top 6-10 10.8%
Top 11-30 21.9%
Top 31-100 17.3%
100+ 12.3%
Private Label 4.0%
3.8%
2.4%
6.2%
2.0%
5.9%
8.7%
-2.4%
99
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ECONOMY WATCH
SLOVAKIA SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX
Source Economist Intelligence Unit (EIU) Slovak Statistics
Karel Tyra Managing Director,
Slovakia
Unlike other EU countries, the Slovak economy has maintained its momentum.
This has been influenced by multiple factors: growing private consumption driven
by declining unemployment, growing wages and consumer confidence and growth
of export and increased production in the car sector. Commentators expect this
trajectory to continue for Slovakia, but there are risks connected to the potential
slow-down of the EU economy and by an overheated labour market. Current
unemployment reached 5.4% in September 2018 contributing to wage growth in
many sectors, at close to 10%. Slovak consumers are very optimistic therefore but
this has not translated into the elevated levels of spending seen in Q2.
In the first half of 2018, Slovakia recorded one of the highest FMCG inflationary
shifts in EU, but this has already slowed in Q3 (from 3.6% in Q2 to 1.8% in Q3)
thanks to increased volume in lower value products. The different performance of
market channels highlights interesting trends. Small growth of Hypermarket/
Supermarkets is the result of declining Hypermarkets performance and stronger
growth of Supermarkets – where shoppers prefer quicker and more convenient
shopping. Contrary to that, Drug chains are keeping a great pace of growth,
growing at the expense of Hypermarkets and thanks to the expansion and
remodeling of stores providing an enhanced shopper experience. Apart from the
growth of drug categories, the FMCG basket is positively influenced by a strong
summer in 2018. Alcoholic and Non-Alcoholic beverages as well as Ice-Cream had
an extraordinary year. This strong season supported the big manufacturers (active
in given categories) and these are growing faster than smaller players.
Similarly to the Czech Republic, the current economic environment and consumer
sentiment gives opportunity to revise and optimize price and promotional
strategies. But given the greater readiness of Slovak consumers to switch to
cheaper grocery brands (38% in Slovakia vs 26% in Czech) it must be done in a
considered way understanding the detailed nuances of price elasticities and the
consequence on volume.
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
85
87 87
8687 87
85
87
86
90
93
90
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU SK
3.03.3
3.73.9
4.34.5
1.0
1.62.0
2.4
2.8 2.7
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
100
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TOTAL SLOVAKIA – CHANNEL PERFORMANCE
Increased volume sales of lower value products has helped FMCG recover.
Hypermarkets are pulling down the HM/SM channel, while Supermarkets grow
due to changing shopper preferences for quicker more convenient shopping.
FMCG MARKET DYNAMICS*
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
2.6%
1.8%
3.1%
-2.0%
12.9%
Total FMCG Hyper/Supermarkets Organized Groceries
Non Organized Groceries SK Organized Drug
60%27%
6%7%
2.2%
3.0%
-0.3%
2.3%3.2%
4.7%
3.3%3.0%
3.6%
1.8%2.9%
-0.4%
2.8%
2.0%6.2%
-0.5%
4.2%
-1.8%-4.1%
0.4%5.1%
2.6% 2.6%
4.3%
9.4%
4.2%
7.5%
1.2%
-0.5%
2.2%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
Slovakia
Unit Value Growth Volume Growth Nominal Value Growth
101
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The biggest manufacturers are active in categories that have been
supported by a strong summer season so growing faster than small players.
A strong summer in 2018 has driven the growth of Beer and Non-Alcoholic
categories as well as Ice-Cream.
TOTAL SLOVAKIA – SUPER CATEGORIES PERFORMANCE
TOTAL SLOVAKIA – MANUFACTURER PERFORMANCE - FMCG
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Dairy 18.3%
Sweets & Treats 17.0%
Beverages Alcohol 16.8%
Health & Beauty 11.2%
Culinary - Shelf Stable 9.6%
Beverages Non Alco 9.1%
Beverages Hot 4.7%
Frozen 3.2%
Home Care excl. Laundry 2.5%
Home Care - Laundry 2.3%
Baking - Shelf Stable 1.9%
Infant Care 1.8%
Pet Care 1.5%
2.6%
2.7%
1.4%
4.2%
5.0%
0.2%
4.0%
0.4%
5.9%
5.5%
3.8%
-11.4%
1.3%
4.9%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 13.7%
Top 6-10 9.6%
Top 11-30 17.0%
Top 31-100 19.2%
100+ 18.7%
Private Label 21.7%
2.6%
4.2%
4.6%
2.7%
3.6%
1.9%
0.4%
102
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SLOVENIA SNAPSHOT
Slovenia had encouraging GDP growth of 4.8% year-on-year in Q3. The
unemployment rate was at its lowest of 5% while the cost of living rose 2.0% over
the past year to further bolster positive economic signals. Consumer sentiment in
Q3 remained unchanged since the previous period, with the Consumer Confidence
Index at 87 points which is in-line with the European average and - the highest
number for Slovenia since the survey started in 2013. The favourable economic
environment means households have more disposable income and more
consumers think it is the right time to purchase things.
Improved economic conditions have benefited FMCG volume growth, which
increased 1.6% year-on-year in Q3, while unit value growth (price increases) had a
bigger contribution to overall performance for nominal value growth to be 3.6% for
the latest quarter. Over the last year to Q3, Salted Snacks performance was
strongest up 11.2%, followed by Meat and meat products (6,8%). Beverages
performance at 4.0% had the biggest impact on FMCG growth because of their high
share. Pleasant weather conditions, which lasted until the end of October, definitely
contributed to driving sales in these and most other categories. The distinctive
growth of the Discounters channel came from their private label performance given
they represent a large portion of their total sales and remain a big focus for retailers.
Given the size and increasingly strong performance of Private labels, they definitely
need to be in the radar of branded players and ensure that branded products can
clearly differentiate their offer to compete effectively.
Health remains the number one concern for Slovenian consumers (significantly
above the European average) and households’ spending on health related items is
increasing. Work-life balance is also a very important concern. These two consumer
priorities provide excellent opportunities for retailers and manufacturers who can
align to these evolving needs to provide tailored products and experiences.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Miroslav Tasic
Group Managing
Director Adriatic
Region
4.95.4
5.1
6.2
3.8
4.8
1.81.4 1.2 1.3
1.9 1.9
Q1 2017Q2 2017Q3 2017Q4 2017Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
8587 87
8687 87
74
84 83
81
87 87
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU SI
103
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TOTAL SLOVENIA – CHANNEL PERFORMANCE
An improvement in volume consumption in Q3 has driven FMCG growth
this quarter in stark contrast in comparison with previous period.
Discounters sales are growing primarily due to sales of their private labels.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
3.5%
0.4%
1.4%
-3.2%
2.6%
-4.5%
12.3%
3.9%
Total FMCG Hypermarkets Supermarkets Large groceries Medium and Small groceries Kiosks Discounters Drugstores
15%
41%10%
3%0%
27%
4%
1.2%
2.7%0.4%
0.8% 0.7% 2.2% 2.6%2.6%
2.7%2.0%
-0.1%
0.8%
0.0%
-1.4%
1.8%
-0.2%
2.9%1.3%
-1.5%
1.6%
1.1%
3.5%
0.4%
-0.6%
2.5%
1.9%
5.5%
3.9%
1.2%
3.6%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
SloveniaUnit Value Growth Volume Growth Nominal Value Growth
104
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Salted Snacks and Beverages kept their growth momentum influenced
by soccer World cup and prolonged warm weather.
TOTAL SLOVENIA – SUPER CATEGORIES PERFORMANCE
TOTAL SLOVENIA – MANUFACTURER PERFORMANCE - FMCG
Private label growth was driven by strong performance of Discounters
with a strong promotional focus.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages 24.4%
Dairy Products 16.3%
Meat And Meat Products 14.7%
Packed Food 13.2%
Confectionery 10.9%
Personal Care 9.9%
Household Care 5.4%
Frozen Food 3.1%
Salted Snacks 1.5%
Baby Food 0.5%
3.5%
4.0%
3.7%
6.8%
2.9%
1.8%
0.7%
0.4%
3.7%
11.2%
3.2%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 17.0%
Top 6-10 8.1%
Top 11-30 15.4%
Top 31-100 15.9%
100+ 10.9%
Private Label 32.8%
3.5%
1.1%
0.9%
1.5%
2.6%
4.3%
6.7%
105
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TURKEY SNAPSHOT Turkey’s economy continued to grow strongly in Q2, with a GDP growth of 5.2%, a
solid result considering the emerging geopolitical tensions and associated
economic risks. Climbing exchange rates in Q3 resulted in price increase
throughout the quarter and inflation was announced as 24.5% by the end of
September. Q3 GDP growth is expected to slow down with the effect of
constrained consumption. Going through Q4, decline in global oil prices, USD to
TRY exchange rate and inflation (November: 21.6%) figures are positive signs for
overall economy in the upcoming period.
In Q3, the FMCG market has grown by 21.0%. The volume gain of 2.1% indicates
some solid and sustainable growth despite price pressure. Body Care, Hair Care
and Dairy have been the fastest growing categories over the last 12 months.
Personal care categories grew strongly in Q3 on the back of price increases, but
also made solid volume gains. This was due to greater household penetration as
Perfumery chains and Hard Discounters continued their rapid store expansion
strategies, and growth was also boosted by intense promotional activities in these
formats. As for Dairy, price increases for raw milk was the key driver of value
growth, but Hard Discounters also generated volume growth by applying everyday
low pricing strategies. For food categories in general, the health trend remains a
major influencing factor, as reflected by accelerating sales for healthy snacks and
organic products.
Looking ahead, despite the fact that exchange rate movements became stabilized,
diminishing consumer demand will continue to be a challenge. Accordingly, it is
important to monitor changing shopper behaviour, as well as managing the
assortment, pricing and promotion strategies to maximize growth. Innovation must
also be a focus to accompany those strategies.
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Local government sources
Didem Sekerel
Erdogan
General Manager
Nielsen Turkey, Buy.
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
85 87 87 86 87 87
107113 112
89 8879
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU TR
5.3
11.5
7.3 7.3
5.2
11.510.6
12.3
10.2
12.8
19.4
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
106
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TOTAL TURKEY – CHANNEL PERFORMANCE
Although inflation was on the rise, we also observe a solid volume growth of
2.1% in Q3’18 indicating improving consumption rates.
Discounters and Perfumeries show strongest growth mainly driven by an
increase in the number of stores.
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
FMCG: excluding Tobacco/Alcohol
7.6%
14.7%
4.7% 6.1%8.6%
10.3%12.3% 13.3% 13.7%
18.9%
5.6%
3.2%
5.8%
5.5%
6.0%
5.2%
5.2%
2.8%2.8%
2.1%
13.2%
17.9%
10.5%11.7%
14.6%15.5%
17.5%16.1% 16.6%
21.0%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
TurkeyUnit Value Growth Volume Growth Nominal Value Growth
17.9%
2.3%
12.1%
12.1%
28.8%
34.6%
13.5%
Total FMCG Hypermarkets Large & Medium Supermarkets
Small Supermarkets Total Hard Discounter Perfumery
Traditional Trade
4%
21%
11%
35%
3%
26%
107
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Body Care, Hair Care and Dairy categories showcase strong growth in volume
due to an increasing number of Perfumery and Hard Discounter stores, as well
as price increases.
TOTAL TURKEY – SUPER CATEGORIES PERFORMANCE
TOTAL TURKEY – MANUFACTURER PERFORMANCE - FMCG
Smaller manufacturers, as well as Private Labels are growing fastest as
consumers seek value offerings.
FMCG: excluding Tobacco/Alcohol
*100+ includes private label brands
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Confectionery 21.3%
Non Alcoholic Drinks 21.3%
Dairy 13.1%
Grocery 12.1%
Housekeeping 7.9%
Paper Products 6.1%
Fats And Oils 5.4%
Body Care 3.8%
Ice Cream 3.3%
Hair Care 2.8%
Oral Care 1.3%
Grooming 0.8%
Other 0.7%
17.9%
17.9%
18.4%
22.3%
15.8%
16.1%
16.0%
11.0%
22.1%
17.0%
21.4%
18.0%
17.6%
23.6%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 24.1%
Top 6-10 11.1%
Top 11-30 17.7%
Top 31-100 15.0%
100+ 32.2%
17.9%
16.1%
14.5%
15.8%
14.9%
23.3%
108
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UKRAINE SNAPSHOT
COUNTRY HIGHLIGHTS
CONSUMER CONFIDENCE INDEX ECONOMY WATCH
Source Economist Intelligence Unit (EIU) Q3 18 GDP local government
Vaios Dimoragas
Managing Director
Ukraine and Belarus
The Conference Board® Global Consumer Confidence
Survey is conducted in collaboration with Nielsen
Our observations and conversations with FMCG and other market players confirm
that the business climate in Ukraine is improving at a healthy, consistent pace.
Many executives confirm that sales are growing in the double digits. The FMCG
market is on a clear uplift, supported by a continuous pick up in actual
consumption, with volume growing just above 10% in the last year and marginally
higher value growth. Therefore FMCG growth remains above the psychological
benchmark of 20%+ vs. last year.
There are certain indicators that drive the improved climate: GDP for Q3 is growing
at decent levels (2.8%) and the Consumer Confidence Index (CCI) in Ukraine has
increased to 64, an additional two points compared to Q2 and up four points
compared to the same time last year. Contrary, the consumer price index has
decelerated to 9% compared to 11.5% in Q2. The notable gas price hike that is
expected this winter is the determining factor of the price of utility bills regaining
first place in consumers’ concerns, followed by war threats and the overall state of
the economy.
Despite positive signs, there are a number of longer term unknowns that could
influence the marketplace. There is uncertainty stemming from the upcoming
elections in spring and autumn 2019, challenges around high quality labour supply
as people emigrate, as well as the country’s on-going military conflicts. In this
context, price sensitivity is relevant and reinforced by promotions, a key tool for
suppliers and retailers in attracting consumers with less confidence. If the
environment continues to become positive, three key trends could be tapped into
that are quickly becoming part of Ukrainians’ lifestyle: convenience, healthy living
and indulgence (a tendency to premiumization). Manufacturers and retailers can
improve in-store merchandising technologies and focus on optimising the smaller
format shopping experience while also keeping e-commerce high on their agenda.
2.6 2.4 2.3 3.1 3.8 2.8
13.8
16.2
13.9 13.8
11.5
9.0
Q2 2017Q3 2017Q4 2017Q1 2018Q2 2018Q3 2018
GDP growth (% change pa)
Inflation, consumer prices (% change pa)
85 87 87 86 87 87
57 58 6158
62 64
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
EU UA
109
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TOTAL UKRAINE – CHANNEL PERFORMANCE
FMCG MARKET DYNAMICS
(weighted average)
VALUE CONTRIBUTION AND GROWTH – MAT Q3-2018
FMCG market continues its recovery with double digit volume growth, as
inflation shows signs of deceleration.
Mini Markets and Perfumeries are growing further indicating the increasing
trend for convenience amongst consumers.
21.3%
22.9%
34.3%
27.0%
12.4%
Total FMCG Hypermarkets/Supermarkets MT Minimarkets MT Perfumeries MT Traditional Trade
53%
13%
6%
28%
10.0%11.2%
9.1% 10.0% 10.0% 10.5% 10.8% 10.4%11.4% 11.6%
3.8%
10.1%
0.3%
1.6%
5.3%
8.4%
10.7% 11.1%11.0%
8.6%
13.8%
21.3%
9.3%
11.6%
15.3%
18.9%
21.5% 21.5%22.4%
20.2%
MAT YA MAT TY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18
UkraineUnit Value Growth Volume Growth Nominal Value Growth
110
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Confectionery & Snacks keep their positive momentum due to an exceptional
summer period. Baby food and Pet food contributed in Q3 value growth.
TOTAL UKRAINE – SUPER CATEGORIES PERFORMANCE
TOTAL UKRAINE – MANUFACTURER PERFORMANCE - FMCG
Traditionally the top 11-30 manufacturers indicate higher competitiveness and fragmentation
of the Ukraine market, while Private Labels grow through a focus from key retailers.
MAT Q3-2018 MAT Q3-2018
MAT Q3-2018 MAT Q3-2018
SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Beverages - Alcoholic 21.8%
Beverages - Non Alcoholic Rtd &
Not Rtd21.1%
Confectionery & Snacks 18.4%
Dairy Products 12.4%
Personal Cleaning & Hygiene 9.0%
Household 4.8%
Seasoning & Sauce 3.8%
Baby Care 2.2%
Meals/Meal Mixes Shelf Stable 2.1%
Pet Food 2.0%
Baby Food & Drinks 1.8%
Desserts/Cakes/Sweet Products 0.6%
21.3%
18.3%
20.5%
26.7%
20.6%
18.8%
24.1%
16.1%
19.4%
24.4%
29.0%
27.0%
25.3%
MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH
Total FMCG 100.0%
Top 1-5 23.8%
Top 6-10 13.2%
Top 11-30 23.5%
Top 31-100 20.7%
100+ 13.0%
Private Label 5.8%
21.3%
20.4%
19.0%
22.7%
20.4%
22.3%
25.9%
111
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
EDIBLE FATS (BUTTER/MARGARINE) 13.3%
CARBONATED SOFT DRINKS 6.6%
OTHER NON ALC. DRINKS 6.5%
SAVOURY SNACKS 5.5%
BEER 5.0%
SPIRITS / LIQUEURS / PRE-MIX 4.9%
CONV. READY MEALS 4.9%
TEA ICED / TEA BASED RTD 4.1%
HEALTH FOOD (GRAIN / SOY) 3.7%
WINE 3.5%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 2.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
FRAGRANCES -3.7%
SPECIAL CLEANERS -2.8%
SHAVING -2.7%
PET FOOD CAT -2.6%
TEA / INFUSIONS -2.5%
BABY / KIDS DIAPERS -2.1%
FLAVOURED DAIRY PRODUCTS -0.9%
SUGAR CONFECTIONARY -0.7%
BAKING / COOKING AIDS -0.7%
COOKIES / WAFERS / GINGERBREAD -0.6%
AUSTRIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
DESSERTS 10.1%
SPORT & ENERGY DRINKS 9.7%
FRESH FRUIT JUICES 8.3%
SOFT DRINKS 8.3%
BREAD 6.7%
CAKES 6.2%
HOME MEAL REPLACEMENT 4.7%
BUTTER & MARGARINE 4.1%
WATER 3.9%
FISH & SEAFOOD 3.6%
Total FMCG $ Growth: 1.4%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SOUP & BOUILLON -6.7%
SHAVING PRODUCTS -6.4%
FACE CARE -4.3%
ALCOHOL & SPIRITS -3.9%
SUGAR & SWEETENER -3.1%
SPICES & SALT -2.8%
VEGETABLES -2.8%
PAPER -2.7%
WAFFLES -2.6%
BABY CARE -2.5%
BELGIUM
112
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
WINE & CIDER EX RED/WHITE 19.7%
DESSERT ICE CREAM 15.8%
OTHER SOFT DRINKS 12.2%
SPRING / BOTTLE WATER 12.2%
MINERAL WATER 11.3%
FAT/BUTTER/MARGARINE 7.9%
DAIRY PRODUCTS 7.2%
CONCENTRATED SOFT DRINKS 6.3%
JUICE 5.6%
WHITE WINE 5.5%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 1.2%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
CANDLES -13.5%
NUTS -9.8%
BON BONS & SUGAR DRAGEE -8.5%
FLOUR -8.1%
FROZEN FOODS MEAT/FISH/
POULTRY -7.3%
WINE GUMS -7.1%
CHOCOLATE TABLETS -6.9%
SWEETENERS -6.6%
TOMATO KETCHUP -6.0%
INSTANT LOTTERIES - SCRATCH -5.9%
DENMARK
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
CIDER L-DRINK LOW ALC WINE 46.9%
INSECT REPELLANT 35.7%
BEER LOW ALC. (MAX. 2.8%) 34.5%
SOY,OAT NON DAIRY DRINKS 26.7%
BERRIES & RHUBARB - FRESH 25.8%
WATER 22.3%
SUNTAN LOTION 21.8%
INFANT FOOD 21.5%
BERRIES & FRUITS - FROZEN 20.2%
SPORT & FITNESS 19.1%
Total FMCG $ Growth: 3.6%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
FRAGRANGES -24.2%
LIGHT BULBS -16.2%
OFFAL -15.7%
NUTS -15.2%
OTHER GRAIN PRODUCTS -12.7%
SUPER FOOD -10.1%
SNACKING DRIED FRUITS ETC. -10.0%
DRINK PREPARATION -9.6%
COCOA -8.8%
DRIED FRUITS & BERRIES -8.6%
FINLAND
113
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
INSECTICIDES 17.5%
BUTTER 13.5%
INDIVIDUAL FROZEN ICE CREAM 10.9%
SMOKED FISH 9.4%
FRESH STARTERS 9.1%
BEER & BEER BASED PRODUCTS 8.3%
NON ALC. STILL DRINKS 7.6%
OLIVES 7.3%
POTATO CHIPS 6.8%
PRE PACKED SALAD 6.7%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 1.9%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SWISS YOGURT -9.3%
SOUPS -8.8%
ETHNIC MEALS -8.7%
NATURAL WINES -8.1%
AIR FRESHENERS -5.7%
CHEWING GUM -5.6%
HAIR CARE -5.6%
CIDER -4.9%
CHOCOLATE BREAKFASTS -4.9%
SUGAR -4.9%
FRANCE
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
ICECREAM 20.1%
FATS & OILS 9.2%
BEER 7.6%
CHEESE SELFSERVICE 7.5%
DAIRY 7.4%
GOURMET COOLED 6.6%
HAIR CARE 6.6%
NON ALCOHOLIC BEVERAGES 6.4%
GOURMET FOOD 3.0%
TOBACCO 2.9%
Total FMCG $ Growth: 3.1%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BABYFOOD -8.0%
HOT BEVERAGES -1.4%
DECORATIVE COSMETICS -0.7%
HOMECARE -0.7%
PASTRIES SELFSERVICE -0.7%
WRAPS & FOILS -0.4%
DRY SHELF STABLE -0.2%
CONFECTIONERY 0.1%
FROZEN FOOD 0.4%
CLEANSING AGENTS 0.4%
GERMANY
114
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
CHILLED PIZZA 23.9%
FROZEN PREP VEGETABLE PROD 19.9%
ELECTRONIC CIGARETTES 18.2%
IMPULSE ICE CREAM 15.7%
TAKE HOME ICE CREAM 15.6%
IGNITION PRODUCTS 12.5%
LIQUID GLUCOSE PRODUCTS 11.4%
CARBONATED DRINKS 11.3%
BATTERIES 9.9%
FRSH MEALS 9.8%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 2.8%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
DISPOSABLE NAPPIES -12.0%
FROZEN VEGETABLES -7.3%
OLIVE OIL -7.1%
WASHING UP LIQUIDS -7.1%
HOUSEHOLD CLEANERS -5.6%
STOCK & GRAVY MIXES -5.6%
KITCHEN TOWELS -5.6%
FROZEN PREP FISH PRODUCTS -5.4%
AMBIENT SOUP -5.4%
SOLID BAKING PRODUCTS -5.3%
IRELAND
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
EGGS 17.3%
MEAT 13.6%
READY MEALS & CONDIMENTS 12.8%
FRUIT & VEGETABLE 9.0%
NATURAL DIETETIC 5.5%
CURED MEATS 4.9%
WINE 4.6%
SNACKS 3.7%
FISH 3.5%
OCCAISONAL/HOLIDAY FOODS 3.4%
Total FMCG $ Growth: 2.2%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
INFANT CARE -4.6%
PASTA, RICE, FLOUR -2.4%
FOOD PREPARATIONS/MIXES -2.1%
DISPOSABLE -1.1%
CONDIMENT PRODUCTS -0.6%
PRESERVED PRODUCTS -0.3%
SOFT DRINKS -0.2%
WASHING DISHES -0.0%
TISSUE DETERGENTS -0.0%
DETERGENTS SURFACES 0.1%
ITALY
115
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
SUN CARE 19.6%
FROZEN ICECREAM 18.5%
EGGS 17.1%
MEDICAL SKIN CARE 13.8%
TOOTHPASTE 12.1%
JUICES (FRESH) 10.8%
FROZEN DESSERTS 10.0%
DRY SAUSAGE 9.4%
MILK SELF STABLE 8.5%
CARBONATED SOFTDRINKS 8.3%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 3.1%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BABY NUTRITION -20.6%
FRUIT DRINKS (SELF STABLE) -9.0%
COOKIES -7.3%
SUGAR PRODUCTS -6.9%
JUICES (SELF STABLE) -6.5%
HAIR STYLING -5.6%
HAIR COLOURING -4.4%
BLADES -4.2%
CHEWING GUM -3.7%
WET TISSUES -3.7%
NETHERLANDS
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
SPORT/ENERGY DRINKS 19.8%
DESSERTS (DRY/WET) AMBIENT 19.4%
CEREALS 18.2%
DESSERTS (CHILLED/FRESH) 18.1%
DESSERTS (FROZEN) 17.5%
MEALS READY TO EAT FRESH 17.3%
CORDIALS/SYRUPS 14.2%
ICED TEA/COFFEE 13.3%
SWEETS/CHOCO LOOSE WEIGHT 12.3%
FLAVORED DRINKS WITH ALC. 11.4%
Total FMCG $ Growth: 2.6%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
DENTAL CARE -11.5%
LIGHT BULBS -10.8%
DETERGENTS (LAUNDRY) -9.5%
POULTRY (FROZEN) -9.5%
NEWS PAPERS -6.9%
MAGAZINES -6.5%
DISH CARE -6.4%
CHEWING GUM -6.1%
SOAP -5.2%
PIPE/CIGARETTE TOBACCO -4.8%
NORWAY
116
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
EGGS 23.8%
DIETETIC FOOD 17.8%
FROZEN CODFISH 14.5%
APPETIZERS 10.3%
FROZEN MEALS 9.8%
MINERAL WATER 9.2%
REFRIGED MEALS/COMPONENTS 9.1%
QUALITY WINE 8.0%
HOT BEVERAGES 7.2%
CHOCOLATES/CONFECTIONERY 6.7%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 4.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BEARD & SHAVING PRODUCTS -3.3%
LIQUID FATS -2.8%
BASIC PRODUCTS -1.4%
BREAKFAST CEREALS -1.0%
YOGURT -1.0%
BODY HYGIENE -0.1%
MILK 1.0%
SKIN CREAMS 1.0%
SPARKING WINE 1.1%
WOMAN HYGIENE 1.3%
PORTUGAL
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
PREPARED VEGETABLES 14.8%
NUTS & DRIED FRUIT 11.1%
SELF STABLE MEALS 8.6%
CHILLED READY MEALS 8.5%
COFFEE 8.2%
SMOKED FOOD 7.4%
APPETIZERS 7.3%
CHOCOLATES 7.0%
FACIAL TREATMENT 6.9%
OLIVES & PICKLES 6.5%
Total FMCG $ Growth: 3.7%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BABY FOOD -5.1%
BLEACH & DISINFECTANT -2.8%
DIAPERS -2.5%
BLADES -2.2%
COCOA -0.9%
SANITARY PROTECTION 0.2%
AUTO DISHWASH 0.4%
PASTA 0.4%
HAIR CARE 0.8%
ALCOHOLIC BEVERAGES 0.8%
SPAIN
117
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
CEREALS/HEALTH BARS 47.1%
IMPULSE SINGLES 34.8%
LOW STRENGHT NON ALC. BEER 25.3%
BAKED SHAPES SNACKS 22.9%
FUNCTIONAL BEVERAGES 21.0%
MULTIPACK ICE CREAM 20.0%
NECTAR/FRUITS & BERRYDRINKS 16.3%
CHOCOLATE DRAGEES 15.6%
FROZEN VEGETARIAN 15.0%
FRESH MEALS 14.2%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 3.4%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
LIGHT BULBS -16.0%
MONTHLY MAGAZINES -13.0%
CHILLED DESSERTS -11.0%
TELEPHONE PRODUCTS -7.2%
DAILY NEWSPAPERS -6.1%
CURED MEAT WHOLE -5.3%
TOFFEES -5.2%
LAMB -5.2%
COTTAGE CHEESE & CURD -5.1%
PASTILLE/ THROAT DROPS -4.6%
SWEDEN
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
IMMEDIATE CONSUMPTION/
ON THE GO MEALS 8.9%
FROZEN DESSERTS 8.2%
CITRUS FRUITS 7.6%
BEER 6.3%
SNACKS/APERO 4.8%
HOME CONSUMPTION MEALS 4.7%
BERRIES 4.2%
PIP FRUIT – e.g.APPLES/PEARS 4.1%
SOFTDRINKS 3.2%
MINERAL WATER 2.7%
Total FMCG $ Growth: 1.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
HOUSEHOLD HARDWARE AIDS -3.6%
DECORATIVE COSMETICS -3.0%
CONFECTIONERY -2.8%
HOUSEHOLD PAPER -2.7%
SOUPS/BOUILLON -1.9%
FROZEN CONVENIENCE -1.8%
CHOCOLATE -1.6%
BODY CLEANSING -1.6%
MEAT -1.5%
CLEANING -1.4%
SWITZERLAND
118
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
FROZEN DESSERTS & FRUIT 12.6%
SPIRITS & READY TO DRINK 8.6%
BEER & CIDER 7.0%
SOFT DRINKS 6.7%
CRISPS & SNACKS 6.5%
FROZEN MEAL SOLUTION 5.1%
DAIRY 5.0%
FROZEN FISH 4.6%
FROZEN MEAT 4.5%
PAPER PRODUCTS 4.2%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 2.8%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
ELECTRICAL -10.0%
BABY -2.3%
STATIONERY & PAPERSHOP -1.9%
LAUNDRY -1.9%
TOILETRIES -1.3%
BEAUTY -0.6%
CLOTHING & JEWELLERY 0.0%
HOMEBAKING 0.3%
TOBACCO 0.4%
CLEANING & CLEANERS 0.8%
UNITED KINGDOM
WHAT’S HOT AND WHAT’S NOT
IN EUROPE WEST?
119
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TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
BREADSTICKS & ROLLS 25.3%
BUTTER 19.2%
KITCHEN TOWELS 18.3%
PET FOOD 18.1%
YELLOW CHEESE 17.1%
EXTRUDERS – SALTY SNACKS 16.9%
BABY WIPES 16.2%
SOFT & CHEWY CANDIES 14.1%
CROISSANTS 13.6%
TOILET BLOCKS 13.4%
Total FMCG $ Growth: 7.1%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BABY DIAPERS -2.1%
CHCOLATE BARS -0.5%
BODY CARE 0.7%
PATES 1.3%
CONTAINERED FISH 1.6%
CHOCOLATE WAFELS 2.0%
SAVORY BISCUIT 2.1%
LIQUEUR 2.8%
FRUIT JUICES 3.2%
TABLE NAPKINS 3.3%
BULGARIA
WHAT’S HOT
CATEGORY % VALUE
GROWTH
ENERGY DRINK CARBONATED 70.9%
PRE-MIX ALCOHOL DRINKS 64.4%
DRINK YOGURT REFRIGERATED 32.8%
MINERAL WATER 23.1%
CARBONATED SOFT DRINKS 19.4%
FRUIT JUICES PURE 19.3%
CANDIES CHEW 17.3%
CHIPS 16.1%
SHOWER GELS 16.1%
YOGURT FLAVOURED 13.4%
YTD Total FMCG $ Growth: 11.5%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
CHOCOLATE BAR (TABLETS) 2.8%
SANITAIRY PRODUCTS – PADS 3.4%
CANDIES HARD 4.7%
CHEWING GUMS 5.4%
COFFEE INSTANT 6.1%
LIQUID MILK – FRESH REFR. 6.2%
MINERAL WATER FLAVOURED 8.1%
BEER ALCOHOLIC 8.1%
SHAMPOO 9.4%
LAUNDRY DETERGENTS 9.7%
BELARUS
120
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
ENERGY DRINKS 24.1%
FROZEN MEALS 14.7%
DESSERTS SELF STABLE 10.3%
CAT FOOD 9.0%
CHIPS & TORTILLA 8.5%
BUTTER & MARGARINE 7.1%
ALCOHOLIC BEVERAGES 7.1%
SOFT DRINKS POWDERED 6.8%
SOFT DRINKS CARBONATED 6.6%
DAIRY DESSERTS 6.6%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 1.4%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
HAIR COLORANTS -7.3%
SYRUPS -6.7%
TABLETS -5.9%
BODY SKIN CARE -5.1%
BABY DIAPERS -4.8%
HAND DISHWASH -4.6%
PROCESSED FRUIT -4.1%
FRANKFURTERS/COCKTAIL
SAUSAGE -4.0%
CANDLES -3.8%
BLADES & RAZORS -3.5%
CROATIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
SPARKLING WINE 33.8%
CIDER 31.9%
ICE COFFEE 28.2%
ALCOHOL PRE MIX 26.7%
MILK FLAVOURED (REFRIDGE) 22.2%
ENERGY DRINKS 19.8%
LIP STICKS 18.5%
ICE CREAM IMPULSE 18.3%
EAU DE PARFUM 18.0%
CHEESE BLUE 18.0%
Total FMCG $ Growth: 3.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
FISH RAW (FROZEN) -14.7%
MEAT SYROVE (FROZEN) -14.7%
SUGAR -11.1%
BABY DISPOSABLE DIAPERS -8.6%
CANDIES DROPS/FURE/DRAGEE 7.7%
HAND DISHWASH -7.7%
TEA BAGS / CAPSULE -7.3%
PULSES -7.1%
CANDIES CHEW / TOFFEES -7.1%
SOUP POWDER 7.0%
CZECH REPUBLIC
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
ENERGY / SPORTDRINKS 25.7%
ICE CREAMS 23.5%
MINERAL WATER 14.6%
SOFT DRINKS 13.9%
SOUR CREAM 13.9%
BATTERIES 12.6%
CHIPS & EXTRUDERS 11.1%
MILK 10.8%
CHOCOLATE COUNTLINES 10.3%
MEAT (RAW) REFRIDGERATED 10.1%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 3.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
RUM -15.5%
SUGAR -15.3%
COGNAC -10.0%
BRANDY -6.2%
CHOCOLATE BARS -6.1%
MEAT (RAW) REFRIGERATE -6.1%
KETCHUP -5.9%
WHISKY -5.8%
BITTERS ALCOHOLIC -5.8%
DECORATIVE COSMETICS -5.1%
ESTONIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
VEGETAL DRINKS (INC. NUT) 59.0%
CAPSULES 21.9%
GARBAGE BAGS 18.6%
PITA BREADS 13.3%
DESSERTS 12.4%
CHILLED VEGETABLES 12.3%
READY SALADS 12.2%
INSECTICIDES 11.4%
GREEK COFFEE 11.0%
FILITER COFFEE 10.9%
Total FMCG $ Growth: 3.8%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
OLIVE OILS -6.6%
DIAPERS -6.2%
SEED OILS -4.2%
CHOCOLATE SPREADS -3.6%
SUN CARE -3.3%
TEA & INFUSIONS -2.9%
TOMATO PRODUCTS -2.6%
FLOURS -2.4%
PIE PASTRY SEEDS -2.2%
PAPER NAPKINS -2.0%
GREECE
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
INSECTICIDE 29.3%
ICE CREAM 21.9%
FRAGRANCE 20.6%
MUESLI & SESAME COUNTLINES 19.6%
ENERGY / SPORTDRINKS 18.4%
FROZEN PIZZA 17.6%
CROISSANT 17.5%
WHISKY 17.5%
ICE TEA 17.0%
WET SAUCE 14.2%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 8.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
FROZEN FISH -8.9%
DESSERT POWDER -8.1%
COCOA POWDER -5.0%
TEA -4.4%
FLAVORING -3.7%
COOKING-OIL -3.0%
BRANDY -2.9%
FLOUR -2.0%
BOUILLON CUBE -1.7%
FROZEN VEGETABLES -1.4%
HUNGARY
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
WHISKY 35.4%
LIQUID MILK FRESH REFRIGERATED 30.2%
BRANDY 29.1%
CAT & DOG FOOD 24.7%
ENERGY DRINK READY TO DRINK 18.7%
BABY FOOD WET 18.4%
SNACKS 15.0%
CHOCOLATE BISCUITS 14.9%
SOUR CREAM 13.3%
CANDLES 13.0%
Total FMCG $ Growth: 4.3%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
ALCOHOL VODKA -15.5%
EVAPORATED MILK -10.8%
CHOCOLATE EGGS -6.9%
CHOCOLATE BULK -5.2%
CHEWING GUM -4.9%
BABY DIAPERS -3.7%
DESSERTS/CAKES/SWEETS -3.2%
FRUIT & VEGETABLE JUICES -3.2%
TEA -2.7%
HAIR COLORANTS -1.1%
KAZAKHSTAN
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
ICE CREAMS 31.9%
ENERGY SPORT DRINKS 29.4%
JARRED BABY FOOD 20.6%
BEER COCKTAILS 19.9%
MEAT MARINADE 17.5%
MINERAL WATER 16.6%
KVASS 14.0%
BEER 13.8%
FACE SKIN CARE 12.7%
SOFT DRINKS 11.9%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 5.1%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SUGAR -23.3%
PASTA -8.0%
FLAKES -5.6%
TEA -5.1%
SMALL BITES - CONFECTIONERY -4.7%
CURD COUNTLINES -4.1%
COTTAGE CHEESE -4.0%
OIL -3.6%
MAYONNAISE -2.9%
COFFEE -2.4%
LATVIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
BEER COCKTAILS 41.7%
ENERGY / SPORT DRINKS 38.9%
ICE CREAMS 34.8%
SOFT DRINKS 15.4%
MINERAL WATER 14.3%
SOUR CREAM 14.2%
BUTTER & MARGARINE & MIX 13.5%
PIZZAS 13.3%
FRESH CREAM 12.0%
KEFIR 12.0%
Total FMCG $ Growth: 4.0%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SUGAR -20.5%
LIQUEUR -10.3%
FLOUR -9.8%
ALCOHOL NASTOYKA&NALIVKA -9.5%
CURD COUNTLINES -9.4%
LONG DRINKS -8.3%
BRANDY -6.7%
PASTA -5.5%
KETCHUP -5.1%
MAYONNAISE -4.9%
LITHUANIA
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
CHILLED PRODUCTS 24.2%
ICE CREAM 23.2%
ENERGY / SPORT DRINK 17.2%
MINERAL WATER 16.0%
CRISPS & POPCORN 12.6%
WHISKY 12.6%
NUTS & SEEDS 12.4%
WIPES & MOPS 12.0%
CREAM 11.2%
SHOWER GEL 10.8%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 5.3%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SUGAR -25.5%
DIAPERS -5.3%
HAIR COLORANTS -2.7%
TISSUES -2.4%
CANNED FISH -1.9%
TEA -1.7%
CANNED MEAT -1.5%
EYE MAKE-UP -0.9%
MEDICAMENTS -0.9%
EDIBLE OILS 0.0%
POLAND
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
MINERAL WATER (FLAVOURED) 74.5%
MEAT (RAW) REFRIGERATED 36.1%
COFFEE BEANS 35.1%
EGGS 29.2%
DESSERTS/CAKES/SWEETS RTE 27.4%
MIXERS NON ALCOHOLIC 27.0%
NON ANIMAL MILK 26.3%
BEER ALCOHOL FREE 24.8%
DINNERS (RTS) REFRIGERATED 22.7%
COCONUT BASED SWEETS 21.6%
Total FMCG $ Growth: 8.9%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
MEAT (RAW) FROZEN -25.4%
SUGAR -15.4%
DOLL/FIGURE/SOFT TOY -9.5%
CONTRUCTION GAMES -8.4%
FRANKFURTER REFRIGERATED -4.6%
COCOA -3.4%
CHEESE (BLOCKS) -2.9%
MARGARINE / SPREAD -2.3%
BODY SKIN CARE -1.7%
INFANT MILK -1.5%
ROMANIA
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
ENERGY DRINKS 29.9%
KVASS 18.0%
WHISKY 17.9%
ICE CREAM 16.4%
ICE TEA 16.2%
DOG FOOD 13.9%
CAT FOOD 12.9%
WATER 12.9%
CHIPS 12.8%
SPARKLING WINE 12.5%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 5.3%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
GINGERBREAD -7.7%
EDIBLE OILS -5.9%
BULK BONBONS -5.7%
VODKA -4.1%
INFANT MILK -3.7%
MAYONNAISE -3.3%
WAFERS -3.2%
DIAPERS -3.2%
AIR FRESHENERS -2.4%
SWEET BISCUITS BULK -2.3%
RUSSIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
WHISKY 19.4%
ENERGY DRINKS 18.4%
INFANT MILK 18.1%
POPCORN 16.7%
FRAGRANCES 15.9%
FROZEN PASTRY 15.5%
CHOCOLATE NOVELTIES 14.8%
FACIAL CARE 14.1%
TOBACCO 13.4%
VODKA 12.7%
Total FMCG $ Growth: 3.8%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
YOGURT FLAVORED -9.5%
FROZEN FISH -7.9%
POWDER DESSERT -7.0%
MARGARINE SPREAD -6.0%
HAND DISWASHING -5.9%
MARGARINE TABLE/COOKING -5.9%
FRUIT NECTAR -5.8%
OIL -5.3%
AIR FRESHENERS -4.7%
ICE TEA -4.7%
SERBIA
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
MILK LIQUID FLAVOURED 38.8%
WINE SPARKLING ARTIFICIAL CARB. 26.2%
DAIRY CREAM FRESH REFR. 21.1%
PATE REFR. 20.8%
FRAGRANCES MALE 19.1%
CHEESE TWISTED STRINGS 17.5%
FRAGRANCES FEMALE 16.3%
PASTES/SPREADS/SANDWICH FILL 16.0%
ICE CREAM IMPULSE 15.8%
WINE SPARKLING SEKT 15.1%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 2.6%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
SUGAR -26.5%
CANDIES CHEW&TOFFEE -14.6%
RICE -7.6%
NUTS -7.3%
LOLLIPOPS -7.1%
SOFT DRINKS LEMON -6.5%
FISH (RAW) FROZEN -6.4%
TABLE NAPKINS -6.0%
CAT FOOD DRY -6.0%
DESSERTS PUDDING/CREAM/ MOUSSE -4.8%
SLOVAKIA
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
ENERGY / SPORT DRINKS 19.5%
BUTTER 15.4%
MUESLI BAR 13.3%
NUTS 12.7%
MEAT (RAW) REFRIGERATED 11.3%
SALTED SNACKS 11.2%
INSECTICIDES 10.9%
ALCOHOL DRINKS 10.8%
TOAST 9.8%
SOFT DRINKS 9.4%
Total FMCG $ Growth: 3.5%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
TEA -5.9%
SYRUPS -4.4%
BODY SKIN CARE -3.5%
SOUPS -3.4%
EDIBLE OILS -2.9%
HAIR COLOURANTS -2.6%
FLOUR -2.2%
ALL PURPOSE HOUSEHOLD CLEANERS -2.2%
TOILET SOAPS -2.1%
MARGARINE -1.9%
SLOVENIA
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WHAT’S HOT
CATEGORY % VALUE
GROWTH
DESSERTS READY TO EAT 35.3%
DEODORANTS 31.7%
FROZEN FOOD 29.8%
AYRAN (YOGURT DRINK) 29.1%
ENERGY / SPORT DRINKS 28.6%
SPRING WATER 27.0%
FABRIC CONDITIONER 26.3%
MILK 26.2%
HAIR CONDITIONER 24.8%
SACHETS & COOKING PAPERS 24.3%
TOP 10 FASTEST GROWING & SHARPEST
DECLINING CATEGORIES
MAT Q3 2018 (based on categories accounting for 95% of FMCG value)
Total FMCG $ Growth: 17.9%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
BABY DIAPERS 4.2%
TOMATO PASTE 4.5%
HONEY 6.5%
LIQUID OIL 7.8%
DISHWASH DETERGENT 9.6%
CANNED FOOD 10.8%
FABRIC DETERGENTS 12.6%
FRUIT JUICE 12.7%
PROCESSED MEAT 12.8%
HAIR DYE 13.1%
TURKEY
WHAT’S HOT AND WHAT’S NOT
IN EUROPE EAST/CENTRAL?
WHAT’S HOT
CATEGORY % VALUE
GROWTH
RUM 57.8%
CHOCOLATE DRAZES 38.3%
ENERGY DRINKS 35.2%
SAUCES 34.9%
BREAKFAST CEREALS 34.5%
YOGURTS 33.7%
SHOWER GELS 33.6%
ICE TEA 31.6%
LIQUID CREAM 31.5%
SNACKS 29.1%
Total FMCG $ Growth: 21.3%
WHAT’S NOT
CATEGORY % VALUE
GROWTH
VERMOUTH 2.5%
TEA 9.1%
SANITARY PRODUCTS 11.4%
MAYONNAISE 11.4%
COFFEE 11.9%
SOUR CREAM 15.7%
TOILET SOAPS 15.9%
SEASONINGS 16.0%
BEER 16.2%
KETCHUP 16.2%
UKRAINE
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Economy Watch
% GDP per annum growth sourced from Economist Intelligence Unit (EIU)
Inflation, consumer prices % change per annum sourced from Economist
Intelligence Unit (EIU) or from local government statistics offices where
unavailable.
The Conference Board® Global Consumer Confidence Survey is conducted
in collaboration with Nielsen. - Survey is based on respondents with Internet
access. Index levels above and below 100 indicate degrees of
optimism/pessimism. Q1 2017 CCI results are unavailable this quarter due to
a Nielsen global survey service enhancement.
FMCG Market Dynamics - compares overall market dynamics (value and unit
growth) in the Fast Moving Consumer Goods sector based on the sales
tracking Nielsen performs in the mentioned markets. The FMCG definition is
based on the widest possible basket of product categories that are
continuously tracked by Nielsen in each of these countries and channels.
Nominal value growth: Percentage change in value sales (expenditures) as
measured by the total basket of reported product categories
Unit value growth (≈ ‘price’ change):
• The change in average price per unit may result from:
• Price changes of individual products
• Change in the mix of purchased products; more or less expensive
products, more or less promotions, etc.
• Channel switching; more or less purchases in discount stores, or
hypermarkets, or convenience outlets, etc.
• Product or channel mix changes may be induced by price change
or may just be the result of market dynamics.
• The unit value growth reflects how consumers experience ‘cost of
living’ in their actual grocery shopping behaviour.
Volume growth: Percentage change in purchased volume (quantity) of
products
Super Category Performance – definition of Super Categories are based on
local market definitions
CLICK HERE FOR DETAILS
DEFINITIONS AND SOURCES
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ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global measurement and
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view available of consumers and markets worldwide. Our approach
marries proprietary Nielsen data with other data sources to help
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than 90 years Nielsen has provided data and analytics based on
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retail and fast-moving consumer goods industries. An S&P 500
company, Nielsen has operations in over 100 countries, covering
more than 90% of the world’s population. For more information, visit
www.nielsen.com.
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