Jason McNally. 21 st of April 2009

Transcription

1 Coffee & Food On the Go How to maximise your Profits! Jason McNally Dubai 21 st of April 2009

2 Agenda Cafe Culture Convenience Retailing Coffee to Go Simply Coffee Food to Go Summary Questions

3 COFFEE & FOOD: IS IT THE PERFECT BLEND FOR CONVENIENCE?

4 Café Culture Exceptional growth, but growth will inevitably plateau Differentiation is key to survival and growth Increasing critical mass taking more of the food for now Business models are being adapted to suit varying locations and towns 20% of consumers use coffee shops when shopping, 35% use them when travelling

5 Industry Challenges Meeting demand for. Convenience choice & availability Health and Wellness Indulgence and Experience One size no longer fits all!

6 Facilitating ease of shop is vital as consumers do not want to spend long in store 75% of Decisions made at the Point of Purchase Too many things to think about Not enough time to plan ahead Consumers aware of why they are shopping but not always what for Opportunity to influence product choice by offering solutions Portion of shop C-Store Forecourt Time to start shopping 17 secs 16 secs Shopping time 86 secs 46 secs Queuing time 37 secs 35 secs Total time in store 2m 20s 1m 37s We need to make life easier for the consumer!

7 Convenience Retailing The Strategic Imperatives Drive Transaction Size by focusing on Building basket size Stocking trigger SKU s Drive Profitability (cash & %) and Productivity (shelf ROI) Attract & retain high value shoppers (loyalty building) Drive profitable growth by adding in non traditional categories that offer opportunities for sustained, profitable growth The Answer... Food & Coffee to Go!!

8 Coffee to Go

9 Coffee To Go Current Coffee Market as reported by Mintel is worth 756m in % of coffee shop visitors frequent coffee shops at least once a week and 21% daily Convenient location is the main reason why UK coffee consumers visit a specific coffee shop (68%) Coffee accounts for 1/3 of all beverages consumed on the go The Coffee to Go market is expected to grow as consumer lifestyles demand greater convenience, particularly with younger consumer segments Fresh ground coffee systems are now emerging g as key destination drivers 50% of consumers rarely have time for breakfast 43.8% of coffee visitors stated that they purchase take away coffee at least once a week and 13.6% 36%daily Consumers are gradually becoming coffee connoisseurs and looking for better quality A high quality coffee offering is essential to any outlet serving food to drive all day sales Source: Allegra Strategies

10 To Go' Coffee Offering UK Tim Horton's 41 sites Kenco 9500 sites Nescafe sites Censa 34 sites Coffee Nation J.J Beano s Simply Coffee Tchibo 432 sites Bewley s 24 sites

11 Hot Beverage Consumption Typical Sales Mix Within The UK Market By Volume Of Weekly Coffee Sales IGD 2008

12 Hot Beverage Consumption ical Sales Mix Within The UK Market By Volume Of Weekly Coffee Sales IGD 2008

13 Coffee to Go Building Transaction Size Typical cross category purchase interactions ti Coffee To Go Presence in Basket Index (1) 47% 69% 36% Confectionary Food To Go News Coffee to Go typically builds transaction size by up to 3.00 per transaction ti when purchased (1) Presence in Basket index is a measure of the extent to which the probability of a purchase in one category is increased when purchases of another category occurs in the same transaction. Thus, when coffee is purchased, the probability of a purchase within Food to Grow is increased by 69% (Source IGD Convenience Research 2008)

14 Product ranges will change to reflect trends I expect coffee to be our No1 selling SKU within 5 years David J Richardson Project Manager, Global Convenience Retail

15 Simply Coffee

16 About Simply Coffee 759 UK & Ireland sites 15mpeople 1.5m choose Simply Coffee every month Organisations are obtaining dual Café in Store units such is the demand People choose Simply Coffee even when surrounded by high street coffee offers Every time somebody buys a Simply Coffee product they spend another 3 in your store Simply Coffee sites routinely achieve higher h coffee sales than high h street branded coffee bars Our busiest sites generate more than six- figures of cash profit p/a for the retailer

17 Triple Certified Fair-trade, Rainforest Alliance & Organic Simply Coffee 100% Ethically Traded y Fairly Traded coffee has grown by 300% between 2002 & 2008 UK to go consumption of 137m in 2008

18 Café in Store 650mm Unit Benefits e Most popular convenience unit Ideal for sites where space is limited W650mm x H1900mm x D750mm Offers a range of coffee drinks and hot Offers a range of coffee drinks and hot chocolate.

19 650mm & Confectionery Benefits Ideal for sites where space is limited Maximise opportunity Offers a range of coffee drinks and hot chocolate. W1300mm x H1900mm x D750mm 3 shelf confectionery unit with storage

20 Café in Store 4 Benefits Most popular Forecourt unit W1000mm x H1900mm x D750mm Offers the full hot beverage solution; coffee, tea & hot chocolate

21 Marketing Materials

22 Profit Potential Maximise your profit per square inch!! ps per Day ffee 33% % ocolate 10% resso 3% puccino 24% te 28% fit Per Day fit Per Week , fit Per Annum 5, , , , , , Average 0.60 profit per price point, Worked on cost per cup (coffee, milk, sugar cup & lid)

23 Our Customers

24 Food to Go

25 Top Line Market Definition There is not one definitive view on the size of the market: Hard to classify Hard to measure Data Monitor have valued the UK FTG market as 1.2billion Forecasted to rise to 1.5billion in the next ten years Euro Monitor have valued the FTG market within c-stores at 119m

26 Consumer definition Consumers refer to food to go as more likely to be a light meal, a snack, fuel, lunch & gap filler: Females view this as a light meal, breakfast & lunch Males refer to it as something to keep them going until main meal time Younger males especially seem to eat as hunger demands Older respondents were buying mainly at lunchtime

27 FTG missions & need states 60% of all snacking purchases are for a snack in between meals 73% of purchases are for immediate consumption or within 2 hours Appetite appeal hot food and made-to-order sandwiches have more appetite appeal than plastic triangle sandwiches which are a last resort

28 Food to go consumers % consumers purchasing food or drink on the go Workers (82%) 73% Under 55 (84%) With children (83%)

29 Key Factors Driving FTG Demographics Outlet Repertoire Product Choice Busier Lifestyles Changing spending habits Wider outlet choice Specialists and generalists Day-part Fruit and health options Gro owth Drivers Coffee and hot beverages Consumption Habits New breakfast / lunch solutions Immediate consumption

30 Trends Driving i FTG Fruit has now overtaken chocolate as Britain s favourite snack Pre-packed salads have increased by 30% (value) Coffee market is growing at 11% YOY, driven by year olds Sandwich dominance is being threatened by growing popularity of other options

31 Provenance

32 Good choice & range Meal deals Grab n go on selected products Good coffee & other hot drinks Previous customer experience One stop shop Hot & toasted sandwiches Freshly made sandwiches Reputation Hygiene Friendly staff Pastries Crisps, chocolate, cold drinks etc Fresh food Hot savoury items Branding Reasonable pricing Good soup (not tinned!) Presentation ti of food

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36 What makes a bad FTG outlet Poor quality food Poor quality outlets Expensive irrelevant offers Poor hygiene Queuing Greasy hot food Poor packaging Poorly trained staff

37 Answering the strategic imperatives Food to Go & Coffee drive transaction size Increased in-store dwell time builds basket size There are very strong cross-category purchase interactions between fresh bean coffee and Food, news and snacking categories Simply Coffee have typically built transaction sizes by 3 Coffee drives both profitability and Productivity Simply Coffee typically generates margin and margin flows of 65% and 50,000pa respectively With it s small footprint, Simply Coffee delivers category leading shelf productivities Food to Go & Coffee attracts & retains high value shoppers Simply Coffee s consumer franchise is typically younger, wealthier and with a higher propensity i l h h h h to impulse purchase than the sector s core shopper Simply Coffee can build loyalty, generating daily repeat business, not only in it s own Category, but in Food, News & Snacking too Developing the category can be a powerful competitive differentiator

38 What is the answer? Be customer-centric: Lifestyle needs Segmentation and day-part ranging Delivering against missions, not just categories Training and on-going business development Food for now: Fresh Ambient Coffee / beverage Juice Convenience innovation: Equipment Ingredients Packaging Communication Collaboration: Trust Training and development Sell your benefits Understand the power of the consumer

39 Any Questions??

40 For more information contact: