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ABA Mid-Year Consumer Update

Todd Hale, Retail Insights Thought Leader

2015 ABA Convention – Save the Date!

March 29 -

April 1

Ritz Carlton Orlando

Orlando, FL

Todd Hale Principal

Todd Hale, LLC

Retail Insights Thought Leader

Todd Hale, former Senior Vice President, Consumer & Shopper Insights with Nielsen, is a

frequently sought-after industry and client speaker. Todd shares his insights on consumer

shopping, buying and media consumption behaviors and attitudes to provide manufacturers

and retailers with strategic visions to facilitate brand, category and retail sales growth.

Todd has more than 36 years of experience in the consumer research industry, including 30

years with Nielsen, where he held various marketing and sales management positions within

advertising/product testing, advanced analytics and consumer panel practice areas.

Todd earned an MBA and a BA in Business from Wright State University.

Todd Hale Retail Insights Thought Leader Principal, Todd Hale, LLC October 7, 2014

MID-YEAR CONSUMER UPDATE

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DRIVING GROWTH IN CHALLENGING TIMES

Staying connected with winning

retailers & categories

Engaging in e-commerce & digital shopping

Winning the trip through precision marketing & sales

focused against shoppers that

matter

Driving the Health & Wellness

growth wave

ECONOMIC UPDATE

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ECONOMY IS A STUDY IN CONTRASTS

INFLATION

JOBS

CONFIDENCE

HEALTH CARE COSTS

WAGE GROWTH

MINDSET

PAYROLL TAX INCREASE

GAS PRICES

IMBALANCE

EQUITY

CORPORATE EARNINGS

HOUSING

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CONSUMER CONFIDENCE INCREASING

Source: The Conference Board; Nielsen supplied data as of February 2011

20

30

40

50

60

70

80

90

100

110

120

Consumer Confidence Index – January 2002 through September 2014

89

25

86

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

CORP SCANDALS

WAR

HURRICANE KATRINA

RECESSION “END”

GREAT RECESSION

SLOW JOB

GROWTH

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Median household income in 2013 inflation adjusted dollars

$51,939

$51,759

$51,842

$52,646

$54,059

$54,423

$56,436

$55,689

$55,278

$54,674

$54,865

$54,913

$55,562

$56,800

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Source: U.S. Census Bureau

FIVE YEARS OF RECOVERY HASN’T BOOSTED INCOMES

Recession

Recovery

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10

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Savings PayingDebts

Vacations Apparel HomeImprov

Out ofHome Ent.

TechProducts

No sparecash

RetirementFunds

Investing

2Q13

3Q13

4Q13

1Q14

2Q14

INCREASED SPENDING INTENTIONS

Source: Nielsen Global Consumer Confidence & Opinion Survey, Total U.S. responses, 2Q’13 through 2Q’14

Once you have covered your essential living expenses, what do you do with your spare cash? I spend it on…

18% reporting no spare cash

Current quarter vs. previous:

But saving & paying off debt still priorities

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PRAGMATIC BEHAVIOR CONTINUES, BUT LESS INTENSE

Source: Nielsen Global Consumer Confidence & Opinion Survey, Total U.S. responses, 2Q’14

Did This Past Year:

60% save on gas & electricity

57% spend less on clothes

54% reduce o-o-h entertain

52% reduce take-out meals

47% switch to cheaper brands

36% use car less

Will Continue To Do:

46% save on gas & electricity

33% reduce take-out meals

29% switch to cheaper brands

28% spend less on clothes

26% reduce o-o-h entertain

21% use car less

RETAIL LANDSCAPE & PERFORMANCE

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IS FLAT THE BEST WE CAN EXPECT?

Source: Nielsen Answers, Total U.S. All Outlets Combined (plus Convenience), All Departments, All Brands (UPC), % Change, 52 week periods vs. year ago

$713 $738 $766 $781 $792

248 251 251 252 252

52 weeks ending9/11/2010





Bill

ion

s

Dollar Sales Unit Volume

All Departments

Dollar Trend +3 +4 +2 +1

Unit Trend +1 +1 +1 +0

Average U Price Trend +2 +4 +1 +1

Any Promo U Trend +1 +4 +5 -7

Shouldn’t an economic recovery be delivering more growth?

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VALUE & CONVENIENCE WINNING, BUT NOT MUCH GROWTH GAP BETWEEN CHANNELS All Departments – Dollar Sales & Trend

*Bread & Baked Goods, plus Crackers, Cookies, and Mexican Tortillas

Source: Nielsen Answers, Total U.S., 52 weeks ending 09/06/2014 (vs. year ago), UPC-coded; *Club Stores, Dollar Stores, Mass-Merchandisers, Supercenters, & Military

0.9%

1.0%

2.4%

1.6%

$0

$50

$100

$150

$200

$250

$300

$350

$400

Bill

ion

s Supermarkets

C-Stores

Drug Stores

Value*

Low Growth High Growth

Total measured channels: $792 Billion & up 1.4%

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TURNAROUND FOR SOME

Source: Company press releases; monthly or quarterly news releases – excluding gas

-8

-6

-4

-2

0

2

4

6

8

10

Ho

me D

epo

t

Walgreen

s

Co

stco

Wh

ole Fo

od

s

Kro

ger

Low

e's

CV

S

Rite A

id

Do

llar Tree

No

rdstro

m

Do

llar Ge

neral

Macy's

Safeway

Petsm

art

Sam's C

lub

Walm

art

Target

Ko

hl's

Family D

ollar

Km

art

2009 Latest Year

Same-Store-Sales – average growth

Note: Red arrows indicate worse than 2009; green arrows indicate largest positive swing in

performance since 2009

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Household Income

% of Households 30 34 36

RETAIL PERFORMANCE LINKED TO SPENDING POWER OF SHOPPERS

Source: Nielsen Homescan, Total U.S., excludes gas only or Rx only trips, 52-weeks ending 6/28/2014

23%

13%

18%

19%

23%

24%

29%

27%

46%

33%

27%

29%

32%

32%

33%

33%

37%

34%

44%

60%

53%

49%

45%

43%

38%

36%

21%

Total Outlets

Club

Pet

HHI

Online

Grocery

Drug

Mass

Dollar

$29k or less $30 - $69.9k $70k +

Share of Basket Ring Dollar Sales by Household Income

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NOT ALL OF THE BIG PLAYERS ARE EXPANDING

Source: Nielsen TDLinx - Counts reflect corporate-owned grocery stores

4,122

1,797

1,147

2,644

1,520

1,410

1,083

1,052

764

Walmart Banner

Target - Tot

Kmart - Tot

Kroger Corp Grocery

Delhaize Grocery

Safeway Corp Grocery

Publix Grocery

Albertsons LLC

Ahold Grocery2013

Expansion from Walmart, Target, Kroger, Publix, Albertsons in 2013 vs. previous year

U.S. Store Counts

• Kroger acquires Harris Teeter January 2014

• Albertsons LLC acquired The United Family chain of 51 supermarkets under three banners in Jan. 2014

• Walmart U.S. will build approximately 120 to 150 small format stores & plans to open approximately 115 supercenters, including relocations & expansions, in 2014

• Safeway & Albertsons to merge in Q4 2014

vs. 2005

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HUNGER FOR NATURAL/GOURMET & LOW PRICES

Source: Nielsen TDLinx

1351

1283

402

353

169

152

Save-A-Lot

Aldi

Trader Joe's

Whole Foods

Sprouts

Fresh Market

2013

Expansion from all in 2013

U.S. Store Counts

• Aldi plans to open 650 stores by 2018

• Whole Foods plans 1,200 new stores

• Lidl postponed entry into U.S. until 2018

vs. 2005

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EXPANSION FROM MOST REGIONAL GROCERS

Source: Nielsen TDLinx

700

595

302

284

224

215

199

204

192

91

83

Bi-Lo/Winn-Dixie

SUPERVALU

HEB

A&P

Save Mart

Hy-Vee

Fresh & Easy

Meijer

Giant Eagle

WinCo Foods

Wegmans2013

Smaller, more nimble, with a strong understanding of their shoppers, experimenting with new formats & expanding into new markets

U.S. Store Counts

vs. 2005

• SUPERVALU acquired 18 Rainbow Foods from Roundy’s in May 2014

• Hy-Vee enters Wisconsin market; and, plans to enter Twin Cities market

WHAT’S SELLING?

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DEMAND SHIFTS BEHIND WINNERS & LOSERS

Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 09/06/2014 (vs. 4-years ago), UPC-coded, 342 major category groupings

-$2

-$1

$0

$1

$2

$3

$4

$5

Bill

ion

s

Overall gains were $73.2 billion versus four years ago; 234 categories with decreases; 108 categories with increases

Absolute Dollar Loss/Gain versus four years ago

Top 10 with decreases vs. 4-years ago

1. Video Products Prerecorded 2. Computer Software 3. Magazines 4. Photographic Supplies 5. Ready-to-Eat Cereal 6. Home, School & Office Supply 7. Laundry Detergent 8. Gum 9. Frozen Pizza 10. Computer Accessory

Top 10 with increases vs. 4-years ago

1. Salty Snacks 2. New Age Beverage 3. Beer & Malt Based Beverages 4. Candy 5. Coffee 6. Vegetables & Herbs 7. Fruit 8. Cheese 9. Wine 10. Traditional Tobacco

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INFLATION & DEMAND DRIVING GROWTH

Source: Nielsen Answers, Total U.S. – All Outlets Combined (plus Convenience), 52 weeks ending 09/06/2014 (vs. year ago), UPC-coded

7 5

5 4

3 2 2 2

1 1

0 0

0 0

-3 1

MeatProduce

DeliAlcoholic Bevs

DairyBakery

Health CarePersonal Care

GroceryPet Care

Beauty CareTobacco & Alternatives

Household CareFrozen Foods

General MerchTotal All Depts

All Outlets Combined (plus Convenience) – Dollar Trend

Center Store departments struggle

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CONSUMERS SHIFTING SPEND OR BUYING LESS


3 3

2 1

0 0

0 0

-1 -1

-1 -2

-2 -5

0

ProduceAlcoholic Bevs

BakeryMeat

GroceryPersonal Care

Health CareTobacco & Alternatives

DairyPet Care

Beauty CareHousehold Care

Frozen FoodsGeneral MerchTotal All Depts

All Outlets Combined (plus Convenience) – Unit Trend

Shouldn’t an economic recovery be delivering more unit growth?

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CONSUMERS FLOCK TO FRESH

Source: Nielsen Perishables Group FreshFacts , Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 7/26/2014 (vs. year ago)

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

DeliPrepared

Foods

Vegetables FreshSeafood

Fruits FreshMeat

DeliCheese

Deli Meat Bakery

Dollar Trend Volume Trend Price Change

Dollar growth for all & volume gains in most; higher prices part of the mix too

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DELI PREPARED FOODS GROWING

Sources: *Nielsen Perishables Group FreshFacts , Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 7/26/2014 (vs. year ago); **Nielsen Scantrack, Total U.S. – All Outlets Combined, plus Convenience, 52 weeks ending 9/6/2014 (vs. year ago), UPC only; ***NPD Group

1% 1% 1%

2% 3% 3% 3%

4% 4%

7% 8%

9% 15%

16%

SoupsPlatters

Breakfast FoodsAppetizers

DessertsEntrees

PizzaSalads

SandwichesSushi

Prepared ChickenSnacks

SidesDips/Spreads/Toppings

Volume Trend*

Growth continues as shoppers choose meals & meal components over ingredients

Total Store ** Unit Growth:

+0.0%

Prepared food purchases from supermarkets, drug stores & other retail outlets will GROW 10% BY 2022***

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FRESH BAKERY DEPARTMENT GROWTH

Sources: *Nielsen Perishables Group FreshFacts , Total U.S. – Fresh Coverage Area (grocery + WM, Sam’s Club and Target); 52 weeks ending 7/26/2014 (vs. year ago); **Nielsen Scantrack, Total U.S. – All Outlets Combined, plus Convenience, 52 weeks ending 9/6/2014 (vs. year ago), UPC only; ***NPD Group

-1%

-0%

0%

2%

2%

2%

3%

4%

5%

7%

8%

Sweet Goods

Bagels

Cakes

Muffins

Breads

Donuts

Rolls

Cookies

Specialty Desserts

Pies

Brownies and Dessert Bars

Volume Trend*

Total Store ** Unit Growth:

+0.0%

BAKING CATEGORY INSIGHTS

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BREAD & BAKED GOODS TRENDS SIMILAR TO TOTAL STORE VIEW Bread & Baked Goods* – Dollar Sales & Trend



$34 $36 $37 $37 $38

16 16 16 16 16






Bill

ion

s


Shouldn’t an economic recovery be delivering more growth?

Dollar Trend +3 +3 +1 +2

Unit Trend +1 +0 +0 +1

Average U Price Trend +2 +3 +1 +0

Any Promo U Trend +0 -2 -1 +2

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FROZEN BAKED GOODS STRUGGLE


$2 $2 $2 $2 $2

1 1 1 1 1






Bill

ion

s


What can be done to bring shoppers into the frozen department?

Baked Goods-Frozen – Dollar Sales & Trend

Dollar Trend +0 +2 -1 -3

Unit Trend +4 -2 -4 -4

Average U Price Trend -3 +4 +3 +1

Any Promo U Trend +8 -1 -2 -1

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GROWTH IN ALL CHANNELS BUT SUPERMARKETS



0.3%

5.8%

7.4%

2.7%

$0

$5

$10

$15

$20

$25

$30

Bill

ion

s

Bread & Baked Goods* – Dollar Sales & Trend

Supermarkets

C-Stores

Drug Stores

Value*

Low Growth High Growth

Total measured channels: $38 Billion & up 1.7%

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SALES OFF IN THE BIG SELLING CHANNELS


-2.2%

2.8% 0.4%

-3.5%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Mill

ion

s

Baked Goods-Frozen – Dollar Sales & Trend

Supermarkets

C-Stores Drug Stores

Value*

No Growth High Growth

Total measured channels: $2.0 Billion & down 2.2%

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FOUR CATEGORIES WITH ANNUAL SALES IN EXCESS OF $5 BILLION Bread & Baked Goods* – All Outlets – Dollar Sales



$0 $2,500 $5,000 $7,500 $10,000

Mexican Tortillas

Muffin

Fresh Pies

English Muffin

Bagel

Pastries

Cake

Rolls & Buns

Snack Cake

Crackers

Cookies

Bread

Millions

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GROWTH IN MOST SEGMENTS



2

9

4

2

2

2

1

1

1

0

0

0

-2

Total Bread & Baked Goods*

Snack Cake

Mexican Tortillas

Cookies

Bagel

Fresh Pies

Rolls & Buns

English Muffin

Pastries

Crackers

Bread

Cake

Muffin

But softness in bread holding down total category sales

Bread & Baked Goods* – All Outlets – Dollar Trend

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MORE SEGMENTS SHOWING UNIT DECLINES, BUT STRONGER UNIT GROWTH FOR SOME Bread & Baked Goods* – All Outlets – Unit Trend

1

7

3

3

3

3

3

0

0

-1

-2

-2

-5

Total Bread & Baked Goods*

Snack Cake

Mexican Tortillas

Bagel

Fresh Pies

English Muffin

Cookies

Crackers

Rolls & Buns

Bread

Cake

Pastries

Muffin



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NO BILLION DOLLAR FROZEN SEGMENTS


$0 $100 $200 $300 $400 $500

Bagels

Sweet Goods Batter & Dough

Bread Dough

Pastry Dough

Filled Pastry

Cheesecake

Cake

Pie Shells

Bread

Garlic Bread

Roll

Pie

Millions

Frozen Baked Goods – All Outlets – Dollar Sales

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GROWTH IN ONLY THREE SEGMENTS


-3

3

2

2

-2

-2

-2

-3

-3

-4

-4

-10

-13

Frozen Baked Goods

Cheesecake

Bread

Cake

Pastry Dough

Pie Shells

Roll

Bread Dough


Garlic Bread

Pie

Filled Pastry

Bagels

Frozen Baked Goods – All Outlets – Dollar Trend

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TROUBLING UNIT TRENDS TOO Frozen Baked Goods – All Outlets – Unit Trend

-4

5

5

0

-2

-3

-3

-3

-3

-5

-8

-8

-13

Frozen Baked Goods

Cheesecake

Cake

Bread

Pastry Dough

Bread Dough

Pie Shells

Roll

Garlic Bread


Filled Pastry

Pie

Bagels


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BREAD & BAKED GOODS IS THE #1 TRIP DRIVER – ACROSS SMALL, MEDIUM & LARGE TRIPS All Outlet Trips – Top Ten Categories by Trip Type – Ranking of Purchase Occasions

Source: Nielsen Homescan, Total U.S. 52-week ending 12/28/2013, excludes gas only or Rx only trips

Bread & Baked Goods

Snacks

Milk

Candy

Carbonated Beverages

Fresh Produce

Paper Products

Cheese

Packaged Meat-Deli

Pet Food

Immediate

Bread & Baked Goods

Snacks

Milk

Fresh Produce

Cheese

Packaged Meat-Deli


Candy

Paper Products

Condiments Gravies Sauces

Bread & Baked Goods

Snacks

Milk

Fresh Produce

Cheese

Packaged Meat-Deli

Paper Products



Deli

Bread & Baked Goods

Snacks

Fresh Produce

Cheese

Milk

Packaged Meat-Deli

Paper Products


Prepared Food-Frozen

Deli

Stock-up Routine Fill-in

Is bread & baked goods receiving enough retail attention?

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Annual Dollar Sales

BAKED BREAD TIED TO MANY PARTS OF THE STORE

$47.8 B

Complementary Categories


$14.8 B

Center Store Baked Bread

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RETAIL HOT BUTTONS

Price & Value

Winning with Non-Edibles

Food Fight

Health & Wellness

Private Brands

Connecting with Shoppers That Matter

Sustainability

Right-Sized Box

Digital Shopping

Experiential Retailing

FOOD FIGHT

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FOOD-AWAY-FROM-HOME SHARE AT HIGHEST POINT EVER Share of total U.S. food expenditures:

Source: Calculated by the Economic Research Service, USDA, from various data sets from the U.S. Census Bureau and the Bureau of Labor Statistics.

42%

44%

46%

48%

50%

52%

54%

56%

58%

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

Food-at-home Food-away-from-home

50.5%

49.5%

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H-E-B DEBUTS UPSCALE STORE WITH FULL-SERVICE RESTAURANT IN SAN ANTONIO “a store unlike any other”

Source: San Antonio Express-News, Kin Man Hui (photos)

“The store layout includes larger Fresh departments and assortment for Grocery, Dairy, Frozen Food, the largest Beer and Wine section in the San Antonio region,

a Primo Pick Kitchen and a Healthy Living Section.”

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Source: http://cargocollective.com/samcrews/Coke-Walmart-Goes-Well-With

“new displays, menu boards & signage in 3000+ Walmart’s gave Coke a level of branding never seen before”

FISH WHERE THE FISH ARE! Secondary location with multi-media support

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Source: http://vmsd.com/content/mega-foods-eau-claire-wis; Photography: Mark A. Steele Photography, Columbus, Ohio; Note: capex = capital expenditures

SHAKING UP THE AISLE Is it time to convert trade spend to capex spend?

DIGITAL SHOPPING

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-4% -2% 0% 2% 4% 6% 8% 10% 12%

ApparelOffice

DepartmentElectronics

MassBooksLiquor

Home ImprovementAuto

Home, Bed & BathToy

SupermarketsDrug

SupercentersConvenience/Gas

ClubSporting Goods

DollarDiscount Dept

PetE-Commerce

E-COMMERCE THE BIG WINNER CAGR 2013 to 2018

Source: Nielsen TDLinx & Nielsen Analytics

Winning Share

Average Growth

Losing Share

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-10010203040

0

20

40

60

80

Q2

20

01

Q2

20

02

Q2

20

03

Q2

20

04

Q2

20

05

Q2

20

06

Q2

20

07

Q2

20

08

Q2

20

09

Q2

20

10

Q2

20

11

Q2

20

12

Q2

20

13

Q2

20

14

Pe

rcen

t

U.S

Do

llars

(b

illio

ns)

Retail E-Commerce Sales% of Total Retail SalesRetail E-Commerce Sales % Change vs. Year Ago

E-COMMERCE COMING TO CPG, BUT @ WHAT SPEED

Source: U.S. Census Bureau; company reports & websites

E-Commerce steadily growing sales

Amazon

$13.4

Walmart

$7.5

Kroger

$1.6

Amazon sales growth very impressive Global annual sales growth versus prior year (in billions)

Step on the gas! Who can get there faster? AmazonFresh expanded from Seattle to Los Angeles & San Francisco

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AMAZON GETS IT

Sources: https://www.amazon.com/gp/subscribe-and-save/details/index.html

http://www.amazon.com/gp/browse.html/?node=5856180011

https://fresh.amazon.com/dash

AMAZON GOING AFTER REGULARLY SCHEDULED BUYS

COMPETITION HEATS UP W/AMAZON PRIME PANTRY

“THE NEW WAY TO SHOP FROM HOME”

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“TARGET EXPANDS SUBSCRIPTION SERVICE TENFOLD”

Source: Target

nearly 1,600 items… Everything from beauty products and pet supplies to home office supplies, are now available for regular delivery… free subscription program allows people to schedule shipments in four, six, eight, 10 and 12-week installments.

Associated Press Apr. 17, 2014

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TRADITIONAL RETAILERS MAKING AN IMPACT ONLINE

“Ahold has a company-wide target to triple its online food sales by 2016”

Sources: Ahold; Peapod; Crain’s Chicago Business; Chicago Tribune; Harris Teeter

HARRIS TEETER DEBUTS ANNUAL SUBSCRIPTION $99.95 for the entire year, no limit to number of orders placed; curbside pick up

PEAPOD EXPANDS NUMBER OF PICK UP LOCATIONS

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WALMART INVESTING IN DRIVE THROUGH GROCERY PICK UP

Sources: The City Wire & ASDA

“The 15,000 square-foot facility will house 10,000 fresh and dry grocery products – from cereal, chips and bread to fresh produce, meat and milk”

The as-yet unnamed and unbuilt internet pick-up outlet will carry some 10,000 SKUs and be staffed by logistics employees at Walmart. They will assemble orders made online and deliver to cars in as many as 30 drive-up lanes. The concept is based on a similar offering at Walmart’s United Kingdom banner, Asda, said Judith McKenna, chief development officer at Walmart and a former Asda exec.

The City Wire May 7, 2014

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RETAILERS TURN TO SOCIAL MEDIA TO SELL GOODS – TWITTER TOO!

Sources: Amazon, Twitter, Target

#AmazonCart hashtag & the “Buy” button on Twitter; Target’s Like2Buy on Instagram

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WALGREENS GOES DIGITAL Coupons & Receipts

Source: Webby Award’s & Supermarket News

“each digital receipt includes targeted coupons based on the most recent purchase”

Webby Award’s 2014 People’s Voice Winner

for Integrated Mobile Experience

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WALMART TEXTING RECEIPTS TO BRING LOYALTY CARD CAPABILITIES TO THEIR OFFERING

Source: Milwaukee Journal Sentinel & NFC World(photo)

Milwaukee Journal Sentinel Apr. 23, 2014

Walmart plans to analyze the large amounts of data it collects through e-receipts and use it as a marketing tool. It enables Walmart to track what its customers buy, where and when and send personalized email offers to shoppers who want it.

A Walmart executive said the retailer could send coupons to customers for their favorite brands or shopping lists of items they may want to buy during their next visit. Customers will be identified through their phone number.

HEALTH & WELLNESS

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FOCUS ON HEALTH IS NOT A PASSING FAD Even in America’s ballparks, the shift is clear

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THOSE MOST ENGAGED IN H&W SHOP AND SPEND

Source: NMI, Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/28/2013

Total Retail Channels

157

153

151

142

137

WELL BEINGS

FOOD ACTIVES

MAGIC BULLETS

FENCE SITTERS

EAT, DRINK & BE MERRYS

Shopping Trips per Household

WELL BEINGS are active shoppers & spend the most annually

$49.40

$45.80

$46.72

$48.01

$45.38

WELL BEINGS

FOOD ACTIVES

MAGIC BULLETS

FENCE SITTERS


Basket Ring $ per Trip

$7,754

$7,021

$7,047

$6,827

$6,210

WELL BEINGS

FOOD ACTIVES

MAGIC BULLETS

FENCE SITTERS


Basket Ring $ Per Household

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DIVERSE CATEGORY DEMAND ACROSS SEGMENTS

Source: NMI, Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded

WELL BEINGS FOOD ACTIVES MAGIC

BULLETS FENCE SITTERS EAT, DRINK & BE MERRYS

FRESH PRODUCE

141

WINE 140

VITAMINS 124 117

BOTTLED WATER

118

BEER 116

CARBONATED BEVERAGES

115

TOBACCO & ACCESSORIES

116 112

$ Buying Rate Index

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BAKING CATEGORIES PROVIDE H&W TOUCH POINTS

Source: NMI, Health & Wellness Segmentation, Total U.S. – 52 weeks ending 12/28/2013, UPC-coded

WELL BEINGS FOOD ACTIVES MAGIC

BULLETS FENCE SITTERS EAT, DRINK & BE MERRYS

BREAD & BAKED GOODS

98 97 104 99 99

COOKIES 99 99 105 96 97

CRACKERS 105 105 97 102 94

FROZEN BAKED GOODS

97 95 103 101 113

Drill downs into specific segments a must to determine opportunities

$ Buying Rate Index

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11%

Average unit growth

HEALTH & WELLNESS OUTPACING RETAIL GROWTH

Source: Nielsen Answers, Wellness Track, Total U.S. - All Outlets Combined (plus Convenience); total store & top 5 based on 52-weeks ending 9/6/2014 vs. year ago; organic based on average unit percent change versus year ago from 4-weeks ending 10/9/2010 through 4-weeks ending 9/6/2014; UPC-coded

Total store (Latest 52 weeks)

+0% 16%

Top 5 fastest growing wellness claims

(Latest 52 weeks)

Organic claims (4-YR CAGR)

EXPERIENTIAL RETAILING

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HY-VEE SERVING UP MORE IN-STORE MEALS

Source: Supermarket News; quote by Randy Edeker, Hy-Vee chairman, president & CEO

We are a company focused on fresh and embarking on a new initiative with restaurants to continue building on this.

Supermarket News Jul. 29, 2013

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RELAX…SIP ON SOME WINE…THEY’LL SHOP FOR YOU, OR USE THE CUP HOLDER ON THE CART

Source: KSDK-St. Louis; Photography by J. Pollack Photography

“We want to make shopping something fun, kind of have that neighborhood feel,“… So they've included a couple of favorites from a few streets over. Park Avenue Coffee will have a coffee bar and 33 Wine Shop and Tasting Bar will operate a bar, bar.

"But the neat aspect of it is we're going to have an app up and running where you can press that app give us your shopping list as long as you buy a glass of wine or beer we'll do your shopping list for you while [you’re] enjoying the craft beer,“…

KSDK.com (St. Louis, MO) Jan. 3, 2014

KEY TAKEAWAYS & CLOSING THOUGHT

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DRIVING GROWTH IN CHALLENGING TIMES

Stay connected with winning

retailers & categories

Determine your role in e-commerce

& digital shopping engagement & act

Win the trip through precision marketing & sales

focused against shoppers that

matter

Drive the Health & Wellness

growth wave

CHASING THE CUSTOMER … NOT THE COMPETITION!

RONALD LUNDE

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STAY CONNECTED

http://www.nielsen.com

[email protected] http://www.linkedin.com/pub/todd-hale/a/353/613

@ToddHaleLLC

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