The Bakery Market: A closer look at the key trends in the Bakery category 12 th October Matthew Verity

Transcription

1 The Bakery Market: A closer look at the key trends in the Bakery category 12 th October 2016 Matthew Verity Business Unit Director Kantar Worldpanel matthew.verity@kantarworldpanel.com 1

2 KANTAR WORLDPANEL SERVICE AND METHODOLOGY The largest shopper panel in Great Britain Geographically and demographically representative of the population of GB 30,000 Households in GB 2

3 KANTAR WORLDPANEL SERVICE AND METHODOLOGY The largest shopper panel in Great Britain Geographically and demographically representative of the population of GB Take home purchases scanned by Palm Pilot and Clicker technology Data retrieved automatically and processed on a 4 weekly cycle Panellists send us their receipts which are matched to their purchases Clients receive databases, reports presentations and insights 3

4 AGENDA 1 Bakery in Context: Key Trends in Grocery 2 Understanding the Performance of Bakery 3 Where next for the Bakery Category 4

5 DEFLATION HAS SLOWED BUT REMAINS NOW AT -1.1% 10% Grocery inflation Grocery growth 8% 6% 4% 2% 0% -2% -4% J M S J A A D M J N F J O J M A D A J N M J O F M S J A A D M J N M J O J M S Source: Kantar Worldpanel RT43 (Grocery) 12 we 11 Sep

6 Contribution to Value Change A RETURN TO CHEAPER PRODUCTS AND VOLUME GROWTH 5 4 Volume HH Store Choice Promotion Choice Product Choice J S N D F A M J S N J M M J A O D F A M J S N J M A J A O D F M M J S N J M A J A O D F A M J S N J F A J A Source: Kantar Worldpanel RT43 (Grocery) 12 we 11 Sep

7 SOME STAPLE MARKETS GOING UP IN PRICE Wet/Smoked Fish Skincare Frozen Potato Products P/P Fresh Meat+Veg+Pastry 1.90% 1.80% 1.60% 1.50% Fresh Lamb 1.20% Total Milk Fruit Chilled Desserts Chilled Ready Meals 0.90% 0.80% 0.70% 0.70% LFL inflation Source: Kantar Worldpanel RT43 (Grocery) 12 we 11 Sep

8 YET VEGETABLES, BUTTER, PORK & POULTRY STILL DECLINE Machine Wash Products Fresh Bacon Rashers Savoury Snacks Fresh Poultry Fresh Pork Fresh Sausages Butter Eggs Yoghurt Vegetable -6.50% -5.70% -5.00% -4.90% -4.30% -4.30% -4.10% -3.80% -3.10% -3.10% LFL inflation Source: Kantar Worldpanel RT43 (Grocery) 12 we 11 Sep

9 SOME CHANGE IN SHOPPING HABITS BUT SLOW CHANGE FREQUENCY BASKET SIZE (Annual FMCG) (Annual FMCG) SLOW CHANGE REPERTOIRE MISSION 60.6% (12 we Till Roll Grocers) 62.4% 2015 (Annual % Spend from Top Up Trips) Source: Kantar Worldpanel Till Roll & RST (Grocery) 9

10 PROPORTION OF SALES ON DEAL NOW SHIFTING DOWNWARDS % spend on deal On promotion Source: Kantar Worldpanel RT43 (Grocery) we 11 Sep 2016 RT numbers realigned consistent with improved post 2009 promotional read. * year to August 2016, unlike other calendar years 10

11 ALDI & LIDL MARKET SHARE 3.8% September % 10.8% August September Source: Kantar Worldpanel Till Roll we 11 Sep

12 ONLINE GROWS STRONGLY BUT HAS SLOWED Internet 15 Discounter % spend growth 10 Convenience 5 High street Supermarket 0 N D J F M M A M J J A S O N D J J F M A M J J A Source: Kantar Worldpanel RT43 (Grocery) we 14 Aug

13 POTENTIAL QUESTION OF SATURATION FOR YOUNG FAMILIES? Sep Sep % penetration Total Pre-Family Young Family 0-4 Years Middle Family 5-9 Years Family 10+ Years Older Dependents Empty Nesters Retired Source: Kantar Worldpanel RT43 (Grocery) we 11 Sep

14 AGENDA 1 Bakery in Context: Key Trends in Grocery 2 Understanding the Performance of Bakery 3 Where next for the Bakery Category 14

15 TOTAL BAKERY IS WORTH ALMOST 6BN BUT DECLINES 5.9bn we 11 Sep % -0.8% August 2016 we 11 Sep % of Total Grocery Appears in 40% of Baskets Purchased 107 times per year Source: Kantar Worldpanel Total Bakery we 11 Sep

16 THE AVERAGE PRICE OF WHEAT HAS CONTINUED TO FALL Source: Index Mundi - Wheat Monthly Price - US Dollars per Metric Ton 16

17 Contribution LOWER AVERAGE PRICES PAID THWART MARKET GROWTH 300, , , , ,000 50, , , , , ,000 Frequency Trip Packs Price per Pack Penetration (%) Total Contribution ( 000s) Source: Kantar Worldpanel Total Bakery we 11 Sep

18 WRAPPED BREAD CONTINUES TO SEE SIGNIFICANT DECLINE Wrapped Bread Rolls Speciality Bread Morning & Bakery Snacks Chilled & Frozen Breads Bread ISB Cake BI Cake ISB Chilled Cakes -6.6% -2.6% +3.3% +5.8% +5.5% +3.9% -0.2% +1.2% +6.6% -120, ,000-80,000-60,000-40,000-20, ,000 40,000 60,000 Penetration % Purchase Frequency Trip Packs Price per Pack Source: Kantar Worldpanel Total Bakery we 11 Sep

19 WITH VOLUME SALES DOWN OVER THE PAST FIVE YEARS 1.63bn 1.38bn Value 000s Volume (Packs 000s) Source: Kantar Worldpanel Total Bakery we 11 Sep

20 INCREASINGLY SHOPPERS MOVE TO MORNING & SPECIALITY Morning & Bakery Snacks Chilled Cakes BI Cake Speciality Bread Rolls Chilled & Frozen Breads ISB Bread Wrapped Bread ISB Cake Source: Kantar Worldpanel Total Bakery we 11 Sep

21 BREAKFAST AND LUNCH KEY TO BAKERY AND INDEED BREAD In Home Lunch Decline more than -3% Decline between -3 and 0% Total Breakfast (IH+CO) Carried Out Lunch Growth between 0 and 2% Evening Meal (IH+CO) Total Snacks (IH+CO) Teatime (IH+CO) Growth between 2 and 5% Growth more than 5% Source: Kantar Worldpanel Usage 21

22 YET BREAKFAST IS CHANGING WITH HEALTH TREND EVIDENT +13% +18% +10% +65% +47% +6% +14% +13% +17% +39% +36% Source: Kantar Worldpanel Usage 22

23 TRADITIONAL ITEMS STILL THE BIGGEST BUT SUFFERING -10% -3% -4% =% -2% -2% -3% -1% Source: Kantar Worldpanel Usage 23

24 Occasions (m) WHILST THE DECLINE OF IN HOME LUNCH HITS SANDWICHES Sandwich Occasions 4000 D J F M M A M J J A S O N D J F M M A M J J A S O N D J J F M A M J J A Source: Kantar Worldpanel Usage 24

25 AGENDA 1 Bakery in Context: Key Trends in Grocery 2 Understanding the Performance of Bakery 3 Where next for the Bakery Category 25

26 FREE FROM REMAINS A BIG GROWTH AREA POSITIVE HEALTH % m Sep Nov Jan Mar Apr Jun Aug Oct 14 Total Bakery 07 Dec Feb Mar May Jul Sep Nov Jan Feb 16 Free From Bakery 24 Apr Jun Aug ( 0.82) Source: Kantar Worldpanel Total Bakery we 11 Sep

27 FOCUS ON ONE PERSON OCCASIONS BIGGEST OPPORTUNITY 65% of UK Households now contain 1 or 2 people compared with 35% that are 3 or more people Source: Kantar Worldpanel Usage 27

28 REMEMBER THE OVER 55 s KEY BAKERY CONSUMERS Weekly frequency Total Bakery An accelerating growth in the importance of the over 55 age group One in 6 people in the UK are over 65 A 26 fold increase in the past century. 2 1 Most population growth will come from the over 65 s 3,000,000 more in the next decade 0 Average Consumer Children Gen Z (16-24) Gen Y (25-34) Gen X (35-54) Baby Boomers (55-64) Maturists (65+) Source: Kantar Worldpanel Usage 28

29 OUT OF HOME AND ON THE GO BOOMING 45bn +4.5% Meals Hot Beverages Soft Drinks Snack Foods Sandwiches 22 8 OOH Value bn Source: Kantar Worldpanel Out of Home 29

30 KEEP THE NPD PIPELINE FOCUSED ON CONSUMER NEEDS Sandwich Thins Source: Kantar Worldpanel Total Bakery we 11 Sep

31 Thank you Matthew Verity Business Unit Director Kantar Worldpanel 31