1 CHALLENGES AND OPPORTUNITIES FOR FOOD MANUFACTURERS MARKET TRENDS AND FUTURE PROSPECTS IN PACKAGED FOOD AND NUTRITION Presented by: Dimitrios Dimakakos, Lead Analyst, Western Europe Lianne van den Bos, Food Analyst Lauren Bandy, Senior Nutrition Analyst #TUTTOFOOD
PACKAGED FOOD IN WESTERN EUROPE: CHALLENGES AND OPPORTUNITIES IN A TOUGH ECONOMIC ENVIRONMENT DIMITRIOS DIMAKAKOS LEAD ANALYST AIDEPI EUROMONITOR SEMINAR TUTTOFOOD 2015 4 TH MAY 2015 @DimiDimakakos
PACKAGED FOOD IN WESTERN EUROPE Euromonitor International: Strategic Global Market Research 3
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
EUROPEAN ECONOMY AND PACKAGED FOOD Key Facts of Packaged Food in Western Europe 5 Total Size 2014 641 bn $ Growth 2009-2014 5% Per Cap Expenditure in 2014 1,297 $
% Growth EUROPEAN ECONOMY AND PACKAGED FOOD GDP Growth Directly Affects Packaged Food Performance 6 Real GDP Growth Vs Packaged Food Performance 2009-2014 8 6 4 2 0-2 -4-6 -8 08 to 09 09 to 10 10 to 11 11 to 12 12 to 13 13 to 14 Real GDP Growth Packaged Food Growth
Consumer Expenditure in Retail Value Terms US$ fixed-exg-yrcur Index Of Consumer Prices 2009-2014 EUROPEAN ECONOMY AND PACKAGED FOOD Consumer Expenditure Increases Because of Higher Prices 7 1,240 Consumer Expenditure on Food Vs Consumer Price Index 210 1,220 1,200 200 1,180 190 1,160 1,140 180 1,120 1,100 170 1,080 160 1,060 1,040 2009 2010 2011 2012 2013 2014 Consumer Expenditure on Food Index of Consumer Prices 150
EUROPEAN ECONOMY AND PACKAGED FOOD Packaged Food Growth Across Western Europe in 2014 8 US$ Current Value Growth Country 2014% Turkey 8.5 Norway 4.4 Austria 3.3 Finland 3.3 United Kingdom 2.3 Sweden 2.3 Belgium 1.9 Ireland 1.9 Germany 1.8 France 1.6 Denmark 1.5 Spain 1.0 Netherlands 1.0 Switzerland 0.9 Portugal 0.4 Italy -0.3 Greece -2.2
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
PASTA IN WESTERN EUROPE Pasta Sales in Western Europe 10 10.3 Bn US$ Retail Value Sales 0.5% Value Growth 0.4% Increase in Retail Unit Price in 2014 Gluten-free Pasta was the fastest growing category in 2014 with 8% Value Growth
Per Capita Consumption in Kg PASTA IN WESTERN EUROPE Price Continues to Play an Important Role in Volume Consumption 11 30 Per Capita Consumption of Pasta in Kg 25 20 15 10 5 0 Italy Greece Switzerland France Germany 2009 2014
PASTA IN WESTERN EUROPE Increased Sales for Chilled Pasta in Western Europe 12 Value Sales in 2009 2% Value Sales in 2014 2% 25% 28% 73% 70% Chilled Pasta 2% CAGR in 2009-2014 Canned/Preserved Pasta Chilled Pasta Dried Pasta Canned/Preserved Pasta Chilled Pasta Dried Pasta
PASTA IN WESTERN EUROPE New Product Developments for Pasta across Western Europe 13 Glutenfree Pasta New Flavours Packaging
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
Retail Value Sales in US$ Retail Value Growth in US$ BAKERY IN WESTERN EUROPE Sales of Bakery Have Been Rising Steadily 15 140,000 Bakery Value Sales in Western Europe in 2014 7.00 120,000 6.00 100,000 5.00 80,000 4.00 60,000 3.00 40,000 2.00 20,000 1.00 0 Baked Goods Biscuits Breakfast Cereals 0.00 Retail Value Sales Retail Value Growth
Retail Value Growth in US$ Retail Value Sales in US$ BAKERY IN WESTERN EUROPE Multi-grain, Seeds and Whole-wheat Add Value in Packaged Bread 16 12 Value Sales of Bread Vs Value Growth of NH Bread 33,000 10 32,000 8 31,000 6 30,000 4 29,000 2 28,000 0 2009 2010 2011 2012 2013 2014 27,000 Bread NH High Fibre Bread
BAKERY IN WESTERN EUROPE The Pursuit of Health Remains Key 17 HEALTH & WELLNESS More nutritional benefits CONVENIENCE Changing lifestyle, small day-to-day luxuries NATURALNESS Distrust for artificial ingredients, sustainability
BAKERY IN WESTERN EUROPE New Product Launches in Bakery 18 Flavours Indulgence Health and Wellness
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
%CAGR Growth in Retail Value Terms CONFECTIONERY IN WESTERN EUROPE Chocolate Confectionery Continues to Dominate 20 2009-2014 Value CAGR Chocolate Confectionery Categories % 2014 Value Sales Breakdown Confectionery Chocolate with Toys 9% Boxed Assortments Other Chocolate Confectionery 25% Countlines Seasonal Chocolate Tablets 66% Bagged Selflines/Softlines -1 0 1 2 3 4 5 09 to 14 CAGR Chocolate Confectionery Gum Sugar Confectionery
CONFECTIONERY IN WESTERN EUROPE The Biggest Themes for Confectionery Brands to Consider 21 Premiumisa tion Sharing Fair Trade Key Trends
CONFECTIONERY IN WESTERN EUROPE New Product Launches in Confectionery 22 Functionality Cross Category Products Healthier Options
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
ICE CREAM IN WESTERN EUROPE Key Figures for Ice Cream in 2014 in Western Europe 24 23 mn US$ Retail Value Sales 2% Increase in Retail Value Sales Frozen yoghurt was the fastest growing category with 27% increase in Retail Value Sales Multipacks continue to gain ground within take-home ice cream
% Value Growth ICE CREAM IN WESTERN EUROPE Northern Europe Performs Better than Southern Europe 25 120 100 80 60 Fastest Growing Categories in the Top Five Markets Ice Cream Value Growth Strongest Performance Country Growth 2013-2014 Turkey 9.8 Sweden 7.3 Norway 5.1 United Kingdom 4.2 Belgium 3.8 40 Weakest Performance 20 0 Frozen YoghurtRetail Artisanal Retail Artisanal Frozen Yoghurt Sweden Norway Turkey United Kingdom Multi-Pack Belgium Country Growth 2013-2014 Switzerland 1.4 Austria 1.2 Spain -0.1 Italy -0.3 Greece -7.3 Value Growth 2013-2014
ICE CREAM IN WESTERN EUROPE New Product Developments In Ice Cream 26 Premium Packaging Dairy Free New Flavours
EUROPEAN ECONOMY AND PACKAGED FOOD PACKAGED FOOD IN WESTERN EUROPE PASTA BAKERY CONFECTIONERY ICE CREAM PROSPECTS AND OPPORTUNITIES
PROSPECTS AND OPPORTUNITIES IN PACKAGED FOOD Forecast of Value Growth in Western Europe 28 US$ Constant Value Growth Country 14 to 19 CAGR Norway 1.8 Ireland 1.8 Turkey 1.2 Finland 1.1 Austria 0.9 Denmark 0.9 Sweden 0.7 Spain 0.6 Switzerland 0.6 Belgium 0.6 Germany 0.5 Portugal 0.5 France 0.5 United Kingdom 0.4 Netherlands -0.1 Italy -0.3 Greece -2.1
Retail Value Growth in US$ PROSPECTS AND OPPORTUNITIES IN PACKAGED FOOD Indulgent Products to Perform Better in the Future 29 2.0 Value Growth in Western Europe 2014-2019 1.5 1.0 0.5 0.0-0.5-1.0 14 to 15 15 to 16 16 to 17 17 to 18 18 to 19 Bakery Ice Cream Pasta Confectionery
PROSPECTS AND OPPORTUNITIES IN PACKAGED FOOD Different Performance Across the Biggest European Economies 30
PROSPECTS AND OPPORTUNITIES IN PACKAGED FOOD Packaged Food Success Factors 31 Distribution Sustainability Concerns Health & Wellness Price Growth New Product Developments
PROSPECTS AND OPPORTUNITIES IN PACKAGED FOOD Key Takeaways 32 Innovation Positive growth for indulgent products Health conscious consumers Germany, UK, Turkey and Scandinavian countries are the ones to watch
33 THANK YOU FOR LISTENING ANY QUESTIONS? Dimitrios.Dimakakos@Euromonitor.com
34 CHALLENGES AND OPPORTUNITIES FOR FOOD MANUFACTURERS MARKET TRENDS AND FUTURE PROSPECTS IN PACKAGED FOOD AND NUTRITION Presented by: Dimitrios Dimakakos, Lead Analyst, Western Europe Lianne van den Bos, Food Analyst Lauren Bandy, Senior Nutrition Analyst #TUTTOFOOD
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION LIANNE VAN DEN BOS, FOOD ANALYST AIDEPI EUROMONITOR SEMINAR TUTTOFOOD 2015 4 TH MAY 2014 @LIANNE_VD_BOS
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Defining Sweet Snacks 36 Confectionery Snack Bars Ice Cream Sweet Snacks Cakes Nuts Fruit Snacks Pastries Sweet Biscuits Savoury Snacks
WHERE IS SWEET SNACKS NOW WHAT IS DRIVING SWEET SNACKS GROWTH WHAT ARE FUTURE OPPORTUNITIES WITHIN SWEET SNACKS
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Sweet Snacks: a Vast Chunk of Packaged Food Sales 38 Over 20% of the packaged food we eat today are Sweet Snacks Proportion of Global Sweet Snacks of Total Packaged Food, 2014 41% Sweet Snacks 21% 17% 16% 14% 13% Confectionery Cakes Ice Cream Sweet Biscuits Pastries
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Sweet Snacks: a Vast Chunk of Packaged Food Sales 39 and it is the second largest growth category compared to other packaged food items in absolute growth Packaged Food Absolute Value Growth 2009-2014 Dairy Sweet Snacks Dried Processed Food Oils and Fats Bread Chilled Processed Food Baby Food Frozen Processed Food Sauces, Dressings and Condiments Noodles Canned/Preserved Food Ready Meals Spreads Pasta Meal Replacement Snack Bars Soup US$ billion 0 50 100 150
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Choice of Sweets Across the Globe.. 40 Relative Per Capita consumption of Sweet Snacks, 2014
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION What is Causing Such a Difference in Our Sweet Tooth? 41 Asia Pacific Accounts for the majority of global growth of pastries China, largest growth market Western style bakeries popular such as BreadTalk and 85 Café Affordable, pastries US$3/kg vs confectionery US$10/kg Western Europe Confectionery accounts for the majority of Sweet Snack growth Consumers in Western Europe eat 7 times more confectionery than in Asia Pacific UK, Germany, France and Italy in top 10 largest confectionery markets Tablets and Countlines highest performance
WHERE IS SWEET SNACKS NOW WHAT IS DRIVING SWEET SNACKS GROWTH WHAT ARE FUTURE OPPORTUNITIES WITHIN SWEET SNACKS
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Why do we Snack? 43
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Why do we Snack? 44 Lifestyle Nutritious Indulgence Break Hungry To indulge To be social Refreshment To celebrate Habit Performance Bored
Lifestyle KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Changing Lifestyles Fundamentally Change Eating Habits 70% OF GLOBAL HOUSEHOLDS WILL LIVE IN URBAN AREAS BY 2030 20% OF GLOBAL HOUSEHOLDS WILL BE SINGLE BY 2030 34% OF CONSUMERS PREPARE BREAKFAST UNDER 5 MINUTES
Lifestyle KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Consumers Wake up to More Breakfast Options 46 Retail Value vs Volume Historic Growth CAGRs for Various Breakfast Items Drinking Milk Spreads Plain Biscuits Cheese Pastries Chilled Meat Bread Breakfast Bars Breakfast Cereals -1 0 1 2 3 4 5 6 7 % CAGR RSP 2009-14 CAGR % Retail Volume 2009-14 CAGR
Nutritious US$ million % CAGR Growth KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Where Do We Get Our Fuel From? 47 Global Snack Bar Performance by Category 1,800 1,600 1,400 1,200 1,000 800 600 12 10 8 6 4 400 200 0 2 0 Healthy Fuel All Natural 2009-14 Absolute 2009-14 CAGR % Images: Courtesy of Flickr user Alpha
Nutritious KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Best of Both Worlds 48 Time of day Novel ingredients Healthy snacks
Indulgence KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Sophisticating the Chocolate Experience 49 New Retail Value Sales Global Chocolate Confectionery 2009-2014 Tablets Countlines Tablets Bagged Selflines/Softlines Seasonal Chocolate Other Chocolate Confectionery Countlines Boxed Assortments Chocolate with Toys
WHERE IS SWEET SNACKS NOW WHAT IS DRIVING SWEET SNACKS GROWTH WHAT ARE FUTURE OPPORTUNITIES WITHIN SWEET SNACKS
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION The Future of Sweet Snacks 51 Top 15 Fastest Growing Categories 2014-2019 Baby Food Meal Replacement Nuts Fruit Snacks Snack Bars Other Sweet and Savoury Snacks Tablets Extruded Snacks Dried Processed Food Oils and Fats Dairy Spreads Countlines Chips/Crisps Savoury Biscuits and Crackers Majority will be snacks No time to eat On the go 0.0 2.0 4.0 6.0 8.0 Retail Value % CAGR Growth Other Snacks
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Which Consumers will Drive Sweet Snacks Growth? 52 Millennials.. Aged 20-34 A lot to prove Snacking as a meal replacement A lot to share
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Choice of Sweets Across the Globe.. 53 Relative Per Capita consumption of Sweet Snacks, 2014
KEY TRENDS AND DRIVERS IN GLOBAL SWEET SNACKS CONSUMPTION Asia..Mixing it up 54 Relative Per Capita consumption of Sweet Snacks, 2014
55 THANK YOU FOR LISTENING ANY QUESTIONS? Lianne.VanDenBos@Euromonitor.com
56 CHALLENGES AND OPPORTUNITIES FOR FOOD MANUFACTURERS MARKET TRENDS AND FUTURE PROSPECTS IN PACKAGED FOOD AND NUTRITION Presented by: Dimitrios Dimakakos, Lead Analyst, Western Europe Lianne van den Bos, Food Analyst Lauren Bandy, Senior Nutrition Analyst #TUTTOFOOD
WHERE ARE OUR CALORIES COMING FROM? CHALLENGES AND OPPORTUNITIES IN NUTRITION LAUREN BANDY SENIOR NUTRITION ANALYST AIDEPI EUROMONITOR SEMINAR TUTTOFOOD 2015 4 TH May 2015 @LaurenKBandy
INTRODUCTION THE WORLD S EXPANDING WAISTLINE ACTIONS TO CURB APPETITES CHALLENGES FOR THE FUTURE KEY MESSAGES
INTRODUCTION Passport Nutrition 59 Retail volume Packaged Food Soft drinks
INTRODUCTION THE WORLD S EXPANDING WAISTLINE ACTIONS TO CURB APPETITES CHALLENGES FOR THE FUTURE KEY MESSAGES
Population ( 000) % of global population THE WORLD S EXPANDING WAISTLINE The Public Health Problem: The World s Expanding Waistline 61 Global Prevalence of Overweight and Obesity 2004-2013 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 45% 40% 35% 30% 25% 20% 15% 10% 5% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0% Overweight Obese Overweight & obese
3.4 mn ADULTS DIE A YEAR AS A RESULT OF BEING OVERWEIGHT OR OBESE 23% OF DEATHS FROM HEART DISEASE ARE A RESULT OF OVERWEIGHT AND OBESITY $2 trillion ESTIMATED GLOBAL ECONOMIC IMPACT 2013 Sources: WHO/McKinsey
% population overweight and obese THE WORLD S EXPANDING WAISTLINE The More Calories Consumed, the Higher the Obesity Levels 63 Obesity Prevalence vs Calorie Purchasing by Country 2014 80 70 60 50 40 30 China UK Spain Mexico Germany Belgium France 20 India 10 0 0 500 1,000 1,500 2,000 Calories per person per day Developed Emerging
THE WORLD S EXPANDING WAISTLINE Calorie Purchase from Packaged Food and Soft Drinks in Western Europe, 2014 64 1,654 54 31 45 170 492 Baked Goods Oils and Fats Dairy Dried Processed Food 58 74 79 93 97 222 239 Confectionery Chilled Processed Food Biscuits Frozen Processed Food Sweet and Savoury Snacks Carbonates Ice Cream Others
Kcal per capita per day THE WORLD S EXPANDING WAISTLINE Germany, Belgium and the Netherlands Top the List in Europe 65 Calories purchased by category and country 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Sweet and Savoury Snacks Biscuits Carbonates Dried Processed Food Frozen Processed Food Chilled Processed Food Confectionery Oils and Fats Others Dairy Baked Goods
THE WORLD S EXPANDING WAISTLINE Western European Countries Consume the Most Protein 66
g of fat, per capita per day THE WORLD S EXPANDING WAISTLINE Western Markets Buy the Most Fat Too 67 Purchase of fat from packaged food and soft drinks by region, 2014 80 70 60 50 40 30 20 10 0 Western Europe North America Eastern Europe Australasia Middle East and Africa Asia Pacific
INTRODUCTION THE WORLD S EXPANDING WAISTLINE ACTIONS TO CURB APPETITES CHALLENGES FOR THE FUTURE KEY MESSAGES
ACTIONS TO CURB APPETITES Is Europe Heading Towards a Price Policy Environment? 69
ACTIONS TO CURB APPETITES Voluntary Actions vs Legislation 70 Government Legislation - Advertising restrictions - Taxes - Age restrictions - Education - School food Industry Voluntary actions - Reformulation - Low-calorie variants - Portion control - Labelling - Funding sports and healthy eating clubs
Case Study: Denmark CASE STUDY: DENMARK Fat is Still a Target for Reformulation 71 Fat Purchased From Packaged Food and Soft Drinks Western Europe by Category 2014 0 5 10 15 20 25 30 35 Oils and Fats Dairy Chilled Processed Food Confectionery Bakery Sweet and Savoury Snacks Sauces, Dressings and Condiments Others
Case Study: Denmark Grammes per capita per day Fat content per 100g CASE STUDY: DENMARK Industry Pressure Leads to Danish Fat Tax Being Rescinded 72 10 8 Purchase of Fat by Product Category in Denmark 2014 90 80 70 6 60 50 4 40 30 2 20 10 0 Butter Cheese Cream Chilled Processed Meat Chocolate Confectionery Biscuits Cakes Chocolate Spreads 0 Fat purchase Fat content per 100g $2.8 Tax added to products containing more than 2.3% saturated fat per 100g $215m Amount of revenue generated that was ring-fenced for public health 1000 Number of jobs reportedly lost as a direct results of implementing the tax
Case Study: United Kingdom CASE STUDY: UNITED KINGDOM Retailers Role Just as Important as Manufacturers 73 12% 8% -$1.4bn Of calories in Western Europe purchased through top 10 companies products Of calories in Western Europe purchased through private label products Value decline in sales of better-for-you food and beverages, 2009-2014
INTRODUCTION THE WORLD S EXPANDING WAISTLINE ACTIONS TO CURB APPETITES CHALLENGES FOR THE FUTURE KEY MESSAGES
World Asia Pacific Middle East and Africa Eastern Europe Latin America Australasia Western Europe North America Absolute growth (kcal) CHALLENGES FOR THE FUTURE Number of Calories Purchased Could Potentially Rise Up to 2019 75 150 130 110 90 70 50 30 10-10 -30-50 Forecast Growth in Food and Drink Calorie Purchasing by Region 2014-2019
CHALLENGES FOR THE FUTURE What Would happen if Consumers Bought 100kcal Less? 76 Biscuits 100kcal = 21g 1-2 biscuits less per person per day -4% Ice Cream 100kcal = 51g ~1 bar -13% Chocolate confectionery 100kcal = 22g Half a serving -3% Pasta 100kcal = 30g ~1 serving -4%
INTRODUCTION THE WORLD S EXPANDING WAISTLINE ACTIONS TO CURB APPETITES CHALLENGES FOR THE FUTURE KEY MESSAGES
RECOMMENDATIONS Double Current Efforts or Prepare for Tighter Legislation 78 Sales of packaged food reached US$614 billion in 2014 in Western Europe, with 20% of these sales from sweet snacks With volume sales starting to stagnate, manufacturers need to focus on premiumisation, innovation and indulgence to ensure they see value growth The number of calories that will be purchased in 2019 from packaged products is expected to rise globally and in Western Europe compared to 2014 Manufacturers have already made a large effort to improve the nutritional content of their products, but more effort is needed
79 THANK YOU FOR LISTENING ANY QUESTIONS? Lauren.Bandy@Euromonitor.com
Follow us on Twitter @Euromonitor Email us: Violetta.scola@euromonitor.com Visit our website: www.euromonitor.com 80 #TUTTOFOOD
INTRODUCTION Research methodology for Passport Nutrition 81