The Year of the Pie Successes, Opportunities and 2012 Outlook Jonna Parker Director, Account Services Nielsen Perishables Group www.perishablesgroup.com
Perishables Group Introduction Fresh Industry Experts 12 years of fresh food consulting and category insights; Acquired by Nielsen in 2012 Multi-Dimensional Approach Consumer and trade research Analytics Marketing communications Data services Performance Consumer Category Strategy Application www.perishablesgroup.com 2
Inputs Utilized in this Analysis Sa ales Data Supermarkets Store, item, week detail Approximately 13,000 stores nationwide Fresh bakery/ In-store bakery No commercial aisle or centerstore Patterns Purchase Spans more than 5 million regular shopping households across 24 states Purchase history on all products bought Industry Trends Media monitoring Supplier and retailer dialogue Secondary research FreshFacts spans all items sold in the fresh departments at supermarkets UPC PLU System 2 www.perishablesgroup.com 3
Pie Successes, Opportunities and 2012 Outlook TRENDS ACROSS FRESH FOODS www.perishablesgroup.com 4
Across Fresh, Staples Down but Products Meeting Consumer Needs Grew 9% 8% 7% 4% 5% 5% 4% 4% 1% -2% Global Healthy Premium/ Indulgence Convenience Dollar Change vs. 2010 Volume Change vs. 2010 Staple Contribution to Fresh Dollar Sales 4% 9% 10% 18% 62% Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 www.perishablesgroup.com 5
Bakery Consumers Care About More Than Price Where Innovation Matters INDULGENCE GOURMET NICHE Where Price Matters SUBSTITUTES TRADING WITHIN BREAKFAST Bakery success is about understanding your consumer and innovating to create value beyond price Source: Nielsen Perishables Group The Role of Price in Consumer Bakery Choices study www.perishablesgroup.com 6
Trend-Spotting in the In-Store Bakery Portion Control Through Smaller Product Sizes Red Velvet Everything Serving Sizes That Meet Household Needs Nostalgia and Comfort Flavors in New Ways Cupcakes - No Signs of Slowing Down Gourmet and Indulgent products www.perishablesgroup.com 7
Pie Successes, Opportunities and 2012 Outlook PIE TRENDS www.perishablesgroup.com 8
How Do Pies Stack Up Against Other Categories? Dollar % Change vs YAGO 4.4% 4.2% 3.2% 3.3% 3.7% 6.9% 9.5% 2.5% 4.7% 3.8% -0.8% 7.1% Total Bakery Cakes Breads Rolls Cookies Donuts Sweet Goods Pies Muffins Bagels Brownies Specialty Desserts Volume % Change vs YAGO 1.2% 1.9% -2.1% -0.8% 0.8% 5.6% 6.8% 1.7% -1.3% 2.8% -6.5% 3.4% www.perishablesgroup.com Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 9
Pies By The Numbers In 2011 million pie sales at supermarkets of bakery sales came from pies of households bought a fresh pie at a grocery store 1 average pie purchases per year 1 fresh pie items carried, up slightly Cream/ Custard Pies 6% A Pie Chart for Pies Pies Volume Share Total U.S., 2011 All Other 6% 11% Mini/Sliced +2 points Mini/ Sliced/ Half Pies 24% Open Face Pies 15% Specialty/ Gourmet Pies 20% Fruit Pies 24% Source: 1. FreshFacts Shopper Insights Powered by Spire, 52 Weeks Ending 12/31/11; 2. Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 www.perishablesgroup.com 10
Mini/Sliced/Half Pies Drove Category Growth Dollar % Change vs YAGO 2.5% 11.2% Pies Mini/Sliced Volume % Change vs YAGO 1.7% 14.0% 1.1% Fruit -3.0% 0.9% 4.4% Specialty/ Gourmet -1.4% Open Face 0.0% 0.2% Cream/ Custard -2.0% -1.1% Meringue -4.5% 2.1% Tarts -0.5% 9.8% Lattice -2.5% 8.6% Other 11.1% www.perishablesgroup.com Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 11
Staple Flavors Held Their Ground Staple Top 10 Flavors 2011 Unit Volume Change vs. 2010 Percentage of Category Sales Apple 22.1 million 2.2% 23% Pumpkin 14.9 million -1.6% 15% Cherry 9.4 million 7.8% 10% Blueberry 4.5 million 6.2% 5% Dutch Apple 3.8 million 7.7% 4% www.perishablesgroup.com Source: Nielsen Perishables Group FreshFacts Total US 52 weeks 12 ending 12/31/2011; representing 63% ACV not projected to total
Helping Extend Pie Season $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Could mini pies help transition the category from seasonal celebration to everyday dessert? Staple www.perishablesgroup.com 13 01/08/2011 01/22/2011 02/05/2011 02/19/2011 03/05/2011 03/19/2011 04/02/2011 04/16/2011 04/30/2011 05/14/2011 05/28/2011 06/11/2011 06/25/2011 07/09/2011 07/23/2011 08/06/2011 08/20/2011 09/17/2011 09/03/2011 10/01/2011 10/15/2011 10/29/2011 11/12/2011 11/26/2011 12/10/2011 12/24/2011 Pies Category Sales Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011
Convenience The Year of the Portable, Portioned Pie Independent Bakery Coffee Shops In-Store Bakery Alternative Grocery Sweet or savory, hand pies appeal to anyone with a practical nature Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 www.perishablesgroup.com 14
Size Matters, But So Does Presentation Convenience Mini Pies 22.0% Pie Slices 0.6% Half Pies 9.2% www.perishablesgroup.com Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 15
Multicultural/ Global Opportunities for Expansion into Global Flavor Profiles Expanding Taste Palate Rethinking Comfort Foods Tres Leches Cakes 8.8% Tropical Pies Red Velvet Cupcakes 105% Regional Pies Emerging as global recipe network Pop Culture Influence Tiramisu Cakes 24.6% Elegant Pies Chocolate pie unit sales 2 +165.7% Sources: 1. Nielsen Perishables Group FreshFacts Total U.S. Hispanic data ending 12/31/11; 2. Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 www.perishablesgroup.com 16
Premium/ Indulgence Innovation (Done Right) Will Attract Consumers 67% of American households comprised of 1-2 people 1 6-Count Cupcakes 6.8% 8 Pies 4.4% 5 Dessert Cakes 39.2% Source: 1. Nielsen, Understanding and Reaching the New American Family; 2.. Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011 www.perishablesgroup.com 17
Health Sugar Free, Super Fruits After years in the shadow of other fruits, tart cherries are emerging as a major super fruit Cherry pies +7.8% No Transfat, Sugar Free and No Sugar Added: +294,000 unit sales in 2011 Natural tart sales increased tenfold Source: Nielsen Perishables Group FreshFacts Total US 52 weeks ending 12/31/2011; Quote: choosecherries.com www.perishablesgroup.com 18
2012 Opportunities: Pies for Every Palette Meeting Consumer Needs Convenience Indulgence Staple Global Health www.perishablesgroup.com 19
Pie Successes, Opportunities and 2012 Outlook QUESTIONS Jonna Parker, Director of Account Services Phone: 773-929-7013 Email: Jonna.Parker@nielsen.com Download today s presentation on our home page: www.perishablesgroup.com 20