Bakery Category Presentation A closer look at the key trends - - PowerPoint PPT Presentation
Bakery Category Presentation A closer look at the key trends impacting Bakery Matthew Verity Thursday 18 th October 2018 Kantar Worldpanel Service & Methodology The largest shopper panel in Great Britain Geographically and demographically
Bakery Category Presentation A closer look at the key trends impacting Bakery
Matthew Verity Thursday 18th October 2018
The largest shopper panel in Great Britain Geographically and demographically representative of the population of GB
Households in GB
Kantar Worldpanel Service & Methodology
Future prospects Price competition Slow behaviour change Is all as it seems…
Food & Drink Growth Consumer Confidence
May 2016 Sep 2018
0%
+3.8%
Yet confidence seemingly has no direct bearing on FMCG market growth
Source: Kantar Worldpanel/ Trading Economics.com (GfK)
9.4 9.3 9.1 8.9 8.8 8.7 8.6 8.5 8.9 9.2 9.1 9.1 9.3 9.3 8.5 8.5 10.7 10.5 5.6 5.7 5.8 5.8 5.8 5.7 5.6 5.5 5.6 5.7 5.6 5.8 5.9 6.0 6.8 5.4 4.4 4.5 10.6 10.6 10.8 10.7 10.6 10.4 10.2 10.1 10.0 9.5 9.6 9.8 9.9 9.9 9.0 8.4 8.5 9.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Food + Non-alcoholic Beverages Alcohol + Tobacco Clothing + Footwear Housing + Utilities Furnishing + Equipment + Maintenance Health Transport Communication Recreation + Culture Education Restaurants + Hotels Miscellaneous Goods + Services
Food and drink increasing in importance for UK households
Source: ONS
0% 2% 4% 6% 8% 10%
O D J MM J S N D F A J A O N J MM J A O D F AM J S N J MM J A O D F AM J S N J MA J A O D F MM J S N J MA J A O D J MM J S N J F A J A O D J MM J S
Grocery Inflation Grocery Growth 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
The GB market relies on inflation for growth with inflation now standing at +2.0%
% change
Source: Kantar Worldpanel – Total Grocery (RST) Growth vs. Inflation – 12 we
7
2 4 6 8 07-Dec-14 04-Jan-15 01-Feb-15 01-Mar-15 29-Mar-15 26-Apr-15 24-May-15 21-Jun-15 19-Jul-15 16-Aug-15 13-Sep-15 11-Oct-15 08-Nov-15 06-Dec-15 03-Jan-16 31-Jan-16 28-Feb-16 27-Mar-16 24-Apr-16 22-May-16 19-Jun-16 17-Jul-16 14-Aug-16 11-Sep-16 09-Oct-16 06-Nov-16 04-Dec-16 01-Jan-17 29-Jan-17 26-Feb-17 26-Mar-17 23-Apr-17 21-May-17 18-Jun-17 16-Jul-17 13-Aug-17 10-Sep-17 08-Oct-17 05-Nov-17 03-Dec-17 31-Dec-17 28-Jan-18 25-Feb-18 25-Mar-18 22-Apr-18 20-May-18 17-Jun-18 15-Jul-18 12-Aug-18 09-Sep-18 Contribution to Growth (%) Frequency Basket Size Shoppers LFL Inflation Rate Price Mix Growth
Inflation key to growth though recent warm weather boosts an increase in trips
Source: Kantar Worldpanel – Total Grocery (RST) Contribution to Value Change – 12 we
Butter
+15%
Milk
+5%
Bread
+4.7%
Fresh Poultry
Ambient Cooking Sauces
Washing Detergent
Not consistently positive across the market, some areas in negative territory
Source: Kantar Worldpanel
Latest 12 weeks to 7th October 2018
28.0% 15.8% 15.5% 10.3% 6.8% 6.2% 5.2% 5.3% 2.1% 1.1% 27.4% 15.4% 15.3% 10.3% 7.6% 6.4% 5.6% 5.2% 2.1% 1.2%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Total Grocers Tesco Sainsbury's Asda Morrisons Aldi Co-op Lidl Waitrose Iceland Ocado
Share of Till Roll Grocers £%
12 Weeks to 08/10/17 12 Weeks to 07/10/18
3.2% 0.9% 0.6% 2.4% 2.4% 15.1% 7.0% 10.0% 0.1% 4.8% 7.5%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
Total Grocers Tesco Sainsbury's Asda Morrisons Aldi Co-op Lidl Waitrose Iceland Ocado
YoY % Growth
Till Roll. Kantar Worldpanel
9
All key retailers showing growth with the Big 4 share continuing to shrink whilst Aldi post their fastest growth
2006-2008 numbers realigned consistent with improved post 2009 promotional read. Best fit calendar years. 52w/e 31 Dec 2017
11
5 10 15 20 25 30 35 40 45 34.5 2017 37.4 2016 39.4 2015 39.6 2014 38.7 2013 39.8 2012 38.3 2011 37.3 2010 33.2 2009 30.9 2008 30.2 2007 30.1 2006
On promotion % spend on deal
Rapid de-escalation of promotions has continued with promotions at a new low with 68% of sales going through at full price in the past 12 weeks
past 12 weeks
Online Grocery growth slowing to under 0.5%pts per annum
12
RST (Grocery). KWP 2017 13. 52w/e 31 Dec17 1 2 3 4 5 6 7 8
7.3 2016 6.8 2015 6.1 2014 5.1 2013 4.4 2012
Online % FMCG spend
7.5 2017
Online Share of Grocery
Own Label Fresh Out of Home Premium Top up shopping
Many retailers all looking for growth in the same place….though signs this is starting to change
In August brands grew faster than own label for the first time in 3 years
15
2 4 6 8 10
MM J S ND F A J AON J MM J S ND F AM J S N J MM J AOD F AM J S N J MA J AOD FMM J S N J MA J AOD J MM J S N J F A J AOD J MM J S
Own label Brands % spend growth
2014 2013 2012 2011 2010 2009 2008 2007 2015 2016 2017 RT43 (Grocery). 2018 09. 12 w/e 9 Aug 18 2018
Source: Kantar Worldpanel – Total Grocery (RST) – 12 we
Own label is for everyone Store differentiation Guides store choice Cheaper
within a store
Own Label - shopper choices save money, but also potentially trading up
16
RT43 (Grocery). 2018 08. 12 w/e 12 Aug 18
Fresh sales contribute a third of £ growth to retailers Alcohol, ambient, frozen, healthcare, household and toiletries collectively grew +£2.4bn
+£0.6bn +£1.2bn +£0.3bn +£0.1bn +£0.1bn +£0.0bn
RT43 (Grocery). KWP 2018 08. 52w/e 12 Aug 18
All grew faster than +3% fresh & chilled
RT43 (Grocery). Full years to KWP 2017 13. 52w/e 31 Dec 17
18
41 40 40 39 38 38 38 37 8 8 8 8 8 8 8 9 36 36 37 37 37 38 37 37 15 16 15 16 16 17 17 17
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 2016 2015 2014 2013 2012 2011 2010
Main Shop For Tonight Replenishment Specific Journey
% spend
2017*
Changing shopper missions – Top Up has become more important over past decade
Source: Kantar Worldpanel – Total Grocery (RST) – 52 we 31 Dec 17
21
Source: Kantar Worldpanel Usage – 52 w/e June 2018 Total In Home/Carried Out food. Includes dishes/ingredients
Health
29 29.5 30 30.5 31 31.5 32 32.5 33 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 S O N D J J F M A M J J A S O N D D J F M A M J J
2018 2017 2016 2015 2014
Servings of food chosen for health have grown 5% vs. last year and are now worth £20bn p.a.
% food servings chosen for Health
Almost 1 in every 3 food items chosen for health reasons
6.9 2.6 15.0 8.7 Hlth benefits(fibre/vitamins) To get portion of fruit or veg More natural/less processed Lower in fat/salt/sugar
Growth across all key health drivers. More natural grows the strongest with concern increasingly about ‘what is in rather than just what is not in my food’
Source: Kantar Worldpanel
How many ‘health’ benefits can you spot?
23
25
44.7
34.2 10.2 6.8 4.1
1 person 2 people 3 people 4 people 5+ people
Household occasions | Number of people present
1980 33%
KWP USAGE HOUSEHOLD OCCASIONS 52 w/e December 2017
We are increasingly seeing a fragmentation of the meal occasion
Cutting a course : 312 million fewer dessert courses in the past 2 years (-3%)
‘Over half of us don’t decide what we’re having for dinner until lunchtime, 1 in 10 of us will decide just before we eat.’
Waitrose Food & Drink Report
Classic grocery options – seven outlets within a mile
The average evening meal takes 34 minutes to prepare. Down from an hour 30 years ago Flat in recent years
Source: Kantar Worldpanel Usage – 52 w/e December 2017 Total In Home/Carried Out consumption 7.6 7.8 8 8.2 8.4 8.6 8.8 9 9.2 D M J S D M J S D M J S D M J S D
Total Consumption – Practicality Needs
2016 2015 2014 Quick to prepare Easy to prepare Servings Vert % 2017
Ease of preparation has become more important than speed
Level of emotional engagement Value per occasion (per capita)
£1.26 SOCIAL £3.24 CELEBRATION £0.81 IN FRONT OF PC £1.33 TREAT £1.88 ROMANTIC £1.64 TOGETHER TIME £1.00 FUEL £2.42 SPECIAL £1.31 IN FRONT OF THE TV £0.72 GRABBED £0.68 ON THE GO £0.80 A QUICK BITE £1.21 CUPBOARD STOCK
KWP USAGE ROLLING 52 W/E OCTOBER 2017
Some moments are worth more than others
76.1 76.7 77.0 78.3 79.2 22.9 23.3 23.0 21.7 20.8
2014 2015 2016 2017 2018
In Store Bakery Wrapped
Bakery has returned to slight growth in the latest year with Wrapped outperforming ISB. However over 5 years the category has grown just 1.4% compared to the 6.6% growth Grocery has experienced
£3.94bn £3.99bn
Source: Kantar Worldpanel – Total Ambient Bakery – Value Share – 52 we Sep 2018
50,000 100,000 150,000 200,000
Contribution
Frequency Trip Packs Price per Pack Penetration (%) GB HH Population
Growth of Bakery has been almost entirely driven by prices after a period of deflation
Source: Kantar Worldpanel – Total Ambient Bakery – Contribution to Value Change – 52 we
10,000 20,000 30,000 40,000 50,000 60,000
Tesco Sainsbury's Asda Morrisons The Co-Operative Aldi Lidl M&S Iceland Ocado Waitrose
Penetration % Purchase Frequency Trip Packs Price per Pack GB HH Population
1.9
2.0 0.9 2.5 12.2 11.9 3.1
10.3 4.2
Higher prices offer some growth for Big 4 despite less frequent trips whilst Aldi and Lidl post very strong growth akin to their performance in Total Grocery
Source: Kantar Worldpanel – Total Ambient Bakery – Retailer Contribution to Value Change & Growth – 52 we Sep ‘18
40.2 37.6 36.1 36.5 36.7 17.4 18.6 19.9 20.6 20.8 22.9 23.3 23.1 21.7 20.8 8.1 9.3 9.1 9.1 9.1
6.8 6.5 6.8 7.1 7.7 4.7 4.7 5.0 5.0 5.0 2014 2015 2016 2017 2018 Wrapped Meal Accomps Wrapped Rolls Wrapped Sandwich Alternatives In Store Bakery Wrapped Bakery Snacks Wrapped Bread
+£149m
+£45m +£40m +£13m
Long term trend is a move away from Traditional Loaves to Snacks and Sandwich Alternatives
Source: Kantar Worldpanel – Total Ambient Bakery – Sector Value Share – 52 we
20,000 40,000 60,000 80,000
Wrapped Bread Wrapped Bakery Snacks Wrapped Rolls Wrapped Sandwich Alternatives Wrapped Meal Accomps In Store Bakery Penetration % Purchase Frequency Trip Packs Price per Pack GB HH Population
+3.1% +3.5% +10.2% +2.9% +2.8%
Though Wrapped Bread has recovered slightly in the past year with higher prices the driver
Source: Kantar Worldpanel – Total Ambient Bakery – Sector Contribution to Value Change – 52 we Sep ‘18
5500 5600 5700 5800 5900 6000 6100 6200 6300 6400 6500
52 w/e 30 Mar 14 52 w/e 27 Apr 14 52 w/e 25 May 14 52 w/e 22 Jun 14 52 w/e 20 Jul 14 52 w/e 17 Aug 14 52 w/e 14 Sep 14 52 w/e 12 Oct 14 52 w/e 09 Nov 14 52 w/e 07 Dec 14 52 w/e 04 Jan 15 52 w/e 01 Feb 15 52 w/e 01 Mar 15 52 w/e 29 Mar 15 52 w/e 26 Apr 15 52 w/e 24 May 15 52 w/e 21 Jun 15 52 w/e 19 Jul 15 52 w/e 16 Aug 15 52 w/e 13 Sep 15 52 w/e 11 Oct 15 52 w/e 08 Nov 15 52 w/e 06 Dec 15 52 w/e 03 Jan 16 52 w/e 31 Jan 16 52 w/e 28 Feb 16 52 w/e 27 Mar 16 52 w/e 24 Apr 16 52 w/e 22 May 16 52 w/e 19 Jun 16 52 w/e 17 Jul 16 52 w/e 14 Aug 16 52 w/e 11 Sep 16 52 w/e 09 Oct 16 52 w/e 06 Nov 16 52 w/e 04 Dec 16 52 w/e 01 Jan 17 52 w/e 29 Jan 17 52 w/e 26 Feb 17 52 w/e 26 Mar 17 52 w/e 23 Apr 17 52 w/e 21 May 17 52 w/e 18 Jun 17 52 w/e 16 Jul 17 52 w/e 13 Aug 17 52 w/e 10 Sep 17 52 w/e 08 Oct 17 52 w/e 05 Nov 17 52 w/e 03 Dec 17 52 w/e 31 Dec 17 52 w/e 28 Jan 18 52 w/e 25 Feb 18 52 w/e 25 Mar 18
Millions of sandwich occasions
Kantar Worldpanel Usage // Total in home and carried out consumption // 52 w/e 25th March 2018
5867m 6396m
YOY
This coincides with a slowdown in the decline of the Sandwich occasion
6000 6100 6200 6300 6400 6500 6600 6700
52 w/e 30 Mar 14 52 w/e 27 Apr 14 52 w/e 25 May 14 52 w/e 22 Jun 14 52 w/e 20 Jul 14 52 w/e 17 Aug 14 52 w/e 14 Sep 14 52 w/e 12 Oct 14 52 w/e 09 Nov 14 52 w/e 07 Dec 14 52 w/e 04 Jan 15 52 w/e 01 Feb 15 52 w/e 01 Mar 15 52 w/e 29 Mar 15 52 w/e 26 Apr 15 52 w/e 24 May 15 52 w/e 21 Jun 15 52 w/e 19 Jul 15 52 w/e 16 Aug 15 52 w/e 13 Sep 15 52 w/e 11 Oct 15 52 w/e 08 Nov 15 52 w/e 06 Dec 15 52 w/e 03 Jan 16 52 w/e 31 Jan 16 52 w/e 28 Feb 16 52 w/e 27 Mar 16 52 w/e 24 Apr 16 52 w/e 22 May 16 52 w/e 19 Jun 16 52 w/e 17 Jul 16 52 w/e 14 Aug 16 52 w/e 11 Sep 16 52 w/e 09 Oct 16 52 w/e 06 Nov 16 52 w/e 04 Dec 16 52 w/e 01 Jan 17 52 w/e 29 Jan 17 52 w/e 26 Feb 17 52 w/e 26 Mar 17 52 w/e 23 Apr 17 52 w/e 21 May 17 52 w/e 18 Jun 17 52 w/e 16 Jul 17 52 w/e 13 Aug 17 52 w/e 10 Sep 17 52 w/e 08 Oct 17 52 w/e 05 Nov 17 52 w/e 03 Dec 17 52 w/e 31 Dec 17 52 w/e 28 Jan 18 52 w/e 25 Feb 18 52 w/e 25 Mar 18 Kantar Worldpanel Usage // Total in home and carried out consumption // 52 w/e 25th March 2018
Millions of toast occasions (incl. toast meals)
YOY 6261m 6601m
Whilst after a long period of accelerated decline consumption of Toast has plateaued
Change in Volume Packs 2018 vs. 2017 Share of Wrapped Bread Volume 2014 Share of Wrapped Bread Volume 2018
Whilst we are buying less packs of bread we are also purchasing smaller packs SMALL MEDIUM LARGE
Source: Kantar Worldpanel – Total Wrapped Bread – 52 we Sep ‘18
41
Health now a key focus in Bakery with a lot of NPD tapping into this trend
5000 10000 15000 20000 25000 30000
Seeded Half & Half Brown & Wholemeal White
Total Switching Shoppers Held Shoppers Won Category Arrivals
Switching based on Packs (000s) to year ending 22-Apr-18Seeded continues to grow strongly stealing volume from all sectors
Source: Kantar Worldpanel – Total Wrapped Bread – Contribution to Value Change – 52 we Sep ‘18
Premium & Artisan Flavoured Gluten Free
Health remains a key long trend. Communicating benefits, responding to concerns and embracing positive ‘natural’ health will be important for future growth Be mindful of the fragmentation of the shopper. Convenience, ease of purchase, ease of preparation and ‘value for money’ will remain increasingly important Understanding and engaging the consumer has never been more important. Help shoppers to treat themselves, snack and indulge their needs outside of traditional occasions Keep the NPD pipeline full. Meeting new consumer needs and playing across different occasions provides growth opportunities Be ready to support retailers with a clear online strategy, wider channel and out of home focus and a clear point of difference Final Thoughts… 1 2 3 4 5
Matthew Verity
Business Unit Director – Kantar Worldpanel matthew.verity@kantarworldpanel.com