europe quarter by numbers - nielsen · q3 2018 vs q2 2018 gdp (annual % growth) inflation germany...

1

Copyright © 2017 The Nielsen Company

Copyright © 2017 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.

QUARTER BY

NUMBERS Q3 2018

EUROPE

2


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………………………………………………………………………………

1

T 4

E 5

7

T 8

11

14

17

20

23

26

29

32

35

38

41

44

47

50

Y 111

3


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

4


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


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


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


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


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


CONSUMER SENTIMENTS IN

EUROPE


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


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


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


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


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


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


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



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



12


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)


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%


Belgium


13


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.


Total FMCG 100.0%


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%


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


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


Source Economist Intelligence Unit (EIU) ) Q3 18 OECD



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



15


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.


(weighted average)


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%


Denmark


16


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


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%


1.2%

-0.5%

4.2%

4.8%

0.0%

-2.6%

3.5%

-3.9%

-3.6%

17


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





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



18


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


(weighted average)


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%


Finland


19


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.


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%


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%


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


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



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


Source Economist Intelligence Unit (EIU) Q3 OECD

Anne Haine

Managing Director

France



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


TOTAL FRANCE – CHANNEL PERFORMANCE

Volumes remain stable but premiumization still drives growth for FMCG.


(weighted average)


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%


FranceUnit Value Growth Volume Growth Nominal Value Growth

22


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.


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%


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


GERMANY SNAPSHOT

COUNTRY HIGHLIGHTS


Source Economist Intelligence Unit (EIU) OECD GDP for Q3 2018

Ingo Schier

Managing Director

Germany



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



24


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.


(weighted average)


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%


Germany


25


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.


Total FMCG 100.0%

Food Ambient 17.3%

Dairy 12.0%



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%


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


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


Source Economist Intelligence Unit (EIU) GDP Q3 forecast, CPI OECD Q3.



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



Paul Walker

Managing Director

United Kingdom & Ireland

27


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.


(weighted average)


*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


*Q4 16 unavailable due to adjustment in numbers with limited historical data

28


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


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%


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


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


Source Economist Intelligence Unit (EIU) OECD for Q3 2018



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



30


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.


(weighted average)


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


31


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.


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%


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


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



33


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.


(weighted average)


*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%


NetherlandsUnit Value Growth Volume Growth Nominal Value Growth

85%

11%4%

34


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.


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%


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


NORWAY SNAPSHOT

COUNTRY HIGHLIGHTS


Source Economist Intelligence Unit (EIU) OECD Q2 2018



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



36


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.


(weighted average)


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%


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


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.


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%


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


PORTUGAL SNAPSHOT

COUNTRY HIGHLIGHTS


Source Economist Intelligence Unit (EIU) OECD Q2 018



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



39


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.


(weighted average)


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%


Portugal


40


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.


Total FMCG 100.0%

Grocer Products 38.5%


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%


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


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


Source Economist Intelligence Unit (EIU) OECD GDP Q2 2018



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



42


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.


(weighted average)


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%


Spain


43


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.


Total FMCG 100.0%

Packaged food 25.3%

Drinks 15.2%


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%


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


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


Source Economist Intelligence Unit (EIU) Q3 2018 GDP estimate



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



45


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.


(weighted average)


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%


Sweden


46


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.


Total FMCG 100.0%

Packaged Food 24.5%

Fresh Food 20.5%


Beverages 10.4%

Frozen Food 9.1%


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%


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


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.


Source Economist Intelligence Unit (EIU) GDP Q3 2018 estimate



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



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


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.


(weighted average)


1.0%

0.1%

1.2%

2.2%

1.3%

-3.5%


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%


SwitzerlandUnit Value Growth Volume Growth Nominal Value Growth

49


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.


Total FMCG 100.0%

Culinary Shelf-Stable & Other 18.7%

Butchery 16.3%

Dairy 13.4%

Fruits And Vegetables 12.5%


Confectionery 7.3%

Bakery 6.6%

Homecare/Pet Care 5.4%

Cosmetics 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%


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


UNITED KINGDOM SNAPSHOT

COUNTRY HIGHLIGHTS


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.



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



51


The hot summer and the final World Cup celebrations were the driving forces

behind Q3 strong performance.


(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%


UK


DETAILS NOT AVAILABLE

52


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


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%


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


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

https://www.nielsen.com/us/en/insights/reports/2018/connected-commerce-connectivity-is-enabling-lifestyle-evolution.html

54


GDP and Inflation reflect % change per annum to Q3 2018 /latest available data

Source: Economist Intelligence Unit (EIU)/OECD/ local government sources


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



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


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


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


EUROPE CENTRAL & EAST

MARKETS AT A GLANCE


CONSUMER SENTIMENTS IN

EUROPE



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


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


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


BELARUS SNAPSHOT

COUNTRY HIGHLIGHTS


Source: GDP and Inflation; & National Statistics Committee of Belarus

Vaios Dimoragas

Managing Director

Ukraine and Belarus



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



58


TOTAL BELARUS – CHANNEL PERFORMANCE

Smaller store formats, keep growing this quarter, while increasing convenience

pushes retailers to deliver on consumer experience.


(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


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.


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%


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


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.


Source Economist Intelligence Unit (EIU) Q3 18 estimates

Svyatoslava Svyst

Managing Director

Bulgaria / RV Leader

Eastern Europe



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



61


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.


(weighted average)


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%


BulgariaUnit Value Growth Volume Growth Nominal Value Growth

62


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


Total FMCG 100.0%

Chilled Products 25.5%


Confectionery 15.1%


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%


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


CROATIA SNAPSHOT


Source: DZS – Croatian Bureau of Statistics. The Conference Board® Global Consumer Confidence


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



64


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


(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


65


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


Total FMCG 100.0%

Beverages 26.9%

Meat and Meat Products 16.5%


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%


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


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


Source Economist Intelligence Unit (EIU) OECD

Karel Tyra Managing Director,

Czech Republic



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



67


TOTAL CZECH REPUBLIC – CHANNEL PERFORMANCE


(weighted average)


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%


Czech Rep.


68


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


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%


Total FMCG 100.0%

Dairy 18.9%

Beverages Alcohol 17.1%

Sweets & Treats 14.4%


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


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


Source: OECD & Statistics Estonia

Ilona Lepp

Managing Director

Baltics


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



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


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.


(weighted average)


* Backdata not available due to Universe Update

3.0%

0.4%

4.3%

4.1%

1.3%

14.4%

0.1%


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


71


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


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%


Total FMCG 100.0%

Chilled and Frozen products 38.9%



Personal Care 7.2%


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


GREECE SNAPSHOT


Source Economist Intelligence Unit (EIU). Q3 2018 GDP estimate

Vicky Grigoriadou

Managing Director

Greece



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



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


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.


(weighted average)


-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%


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


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


Total FMCG 100.0%

Dairy & Refrigerator Cat. 24.3%

Grocery 23.0%

Non Alcoholic Drinks 12.2%


Confectionery 9.0%

Household 6.3%


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%


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


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



Kateryna

Edelshtein

Hungary Market

Leader Buy & Watch



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



76


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)


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%


Hungary


77


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


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%


Total FMCG 100.0%


Processed Meat 12.9%



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


KAZAKHSTAN SNAPSHOT

COUNTRY HIGHLIGHTS


Source Local statistical office

Ilona Lepp

Managing Director

Baltics



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



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


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.


(weighted average)


* 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%


Kazakhstan


80


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


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%


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


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


Ilona Lepp

Managing Director

Baltics

Source: OECD The Conference Board® Global Consumer Confidence


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



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


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.


(weighted average)



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


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


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%


Total FMCG 100.0%




Personal Care 7.7%


Confectionery 6.1%


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


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


Ilona Lepp

Managing Director

Baltics



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



8587 87

8687 87

73

7779

7778

83

Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

EU LT

85


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.


(weighted average)



4.0%

1.9%

9.1%

1.2%

4.6%

24.9%

1.2%

10.4%


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


86


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


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%


Total FMCG 100.0%




Personal Care 10.0%


Confectionery 5.6%


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


POLAND SNAPSHOT



Karolina Zajdel-

Pawlak

Managing Director,

Poland



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



88


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.


(weighted average)


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%


Poland


89



Total FMCG 100.0%


Culinary 16.3%


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


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


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


Source Economist Intelligence Unit (EIU) Q3 2018 National Statistics Office

Luca De Nard

Managing Director

Romania



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



91


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).


(weighted average)


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%


RomaniaUnit Value Growth Volume Growth Nominal Value Growth

92


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


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%


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


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


Source Economist Intelligence Unit (EIU) Q3 18 Rosstat

Alexander Kotsuba,

Managing Director

Nielsen Russia



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



94


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.


(weighted average)


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%


Russia


95


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


Total FMCG 100.0%

Other Food 14.8%

Tobacco 14.7%

Dairy 12.5%


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%


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


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


Source Local government source Q3 2018 estimates

Miroslav Tasic

Group Managing

Director Adriatic

Region



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



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


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.


(weighted average)


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%


Serbia


98


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


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%


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%


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


ECONOMY WATCH

SLOVAKIA SNAPSHOT

COUNTRY HIGHLIGHTS


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.



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



100


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)


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%


Slovakia


101


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


Total FMCG 100.0%

Dairy 18.3%

Sweets & Treats 17.0%

Beverages Alcohol 16.8%


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%


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


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


Source Local government The Conference Board® Global Consumer Confidence


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



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


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.


(weighted average)


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%


SloveniaUnit Value Growth Volume Growth Nominal Value Growth

104


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


Total FMCG 100.0%

Beverages 24.4%


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%


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


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


Source Local government sources

Didem Sekerel

Erdogan

General Manager

Nielsen Turkey, Buy.



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



106


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.


(weighted average)


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%


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


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


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%


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


UKRAINE SNAPSHOT

COUNTRY HIGHLIGHTS


Source Economist Intelligence Unit (EIU) Q3 18 GDP local government

Vaios Dimoragas

Managing Director

Ukraine and Belarus



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



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


TOTAL UKRAINE – CHANNEL PERFORMANCE


(weighted average)


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%


UkraineUnit Value Growth Volume Growth Nominal Value Growth

110


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


Total FMCG 100.0%

Beverages - Alcoholic 21.8%

Beverages - Non Alcoholic Rtd &

Not Rtd21.1%

Confectionery & Snacks 18.4%


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%


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


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%


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


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%





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


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%


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


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%





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


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%


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


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%





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


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%


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


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%





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


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%


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


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%





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


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%


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


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%





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


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%


WHAT’S NOT

CATEGORY % VALUE

GROWTH

HOUSEHOLD HARDWARE AIDS -3.6%


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


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%





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


IN EUROPE WEST?

119






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%


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


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%





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

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%


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

121


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%





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%


ESTONIA



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%


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

122


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%





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

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%


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%


KAZAKHSTAN

123


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%





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

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%


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

124


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%





WHAT’S NOT

CATEGORY % VALUE

GROWTH

SUGAR -25.5%

DIAPERS -5.3%


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

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%


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%


INFANT MILK -1.5%

ROMANIA

125


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%





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%


SWEET BISCUITS BULK -2.3%

RUSSIA



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%


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%


ICE TEA -4.7%

SERBIA

126


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%





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

CATEGORY % VALUE

GROWTH


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%


WHAT’S NOT

CATEGORY % VALUE

GROWTH

TEA -5.9%

SYRUPS -4.4%


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

127


WHAT’S HOT

CATEGORY % VALUE

GROWTH

DESSERTS READY TO EAT 35.3%

DEODORANTS 31.7%

FROZEN FOOD 29.8%

AYRAN (YOGURT DRINK) 29.1%


SPRING WATER 27.0%

FABRIC CONDITIONER 26.3%

MILK 26.2%

HAIR CONDITIONER 24.8%

SACHETS & COOKING PAPERS 24.3%





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

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%


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

128


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

https://www.nielsen.com/content/dam/nielsenglobal/eu/docs/quarterbynumber/qbn-super-category-eu-q3-2018.pdf

129


ABOUT NIELSEN

Nielsen Holdings plc (NYSE: NLSN) is a global measurement and

data analytics company that provides the most complete and trusted

view available of consumers and markets worldwide. Our approach

marries proprietary Nielsen data with other data sources to help

clients around the world understand what’s happening now, what’s

happening next, and how to best act on this knowledge. For more

than 90 years Nielsen has provided data and analytics based on

scientific rigor and innovation, continually developing new ways to

answer the most important questions facing the media, advertising,

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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