ETHNIC OPPORTUNITY IF ONLY I KNEW CANADIAN GROCER CONFERENCE

ETHNIC OPPORTUNITY IF ONLY I KNEW CANADIAN GROCER CONFERENCE May 2013

SOMETHING S IN THE AIR or 2

IF ONLY I KNEW I FOUND OUT 1) What s happening? 3) Global Insights 2) How ethnic shops 4) Homescan Panel (Canada) 3

1) What s happening? 3) Global Insights 2) How ethnic shops 4) Homescan Panel (Canada) 4

What s happening? 1 VISIBLE MINORITIES WILL DOUBLE WHILE CAUCASIANS WILL ONLY GROW 10% VM 6.3 Mil 2011 VM 12.8 Mil More than Double! Caucasians 26.5 Mil 10% Growth 2031 Caucasians 29.2 Mil Source: StaIsIcs Canada 2010 Medium Growth (Reference scenario), 2011 ImmigraIon & Ethno- cultural Diversity in Canada 5

What s happening? 2 RECENT IMMIGRANTS MOSTLY FROM ASIA New Immigrants (2006 to 2011) 13% Top 10 Countries Philippines All Others 47% 11% China India United States Pakistan 2% 2% 2% 3% 3% 3% 10% 4% Source: StaIsIcs Canada 2011 ImmigraIon & Ethno- cultural Diversity in Canada United Kingdom Iran South Korea Colombia Mexico 6

What s happening? 3 GROWTH RATES ARE STAGGERING ~Growth Rate by 2031 West Asian 523K Japanese 142K Source: StaIsIcs Canada, 2010 Arab 930K Korean 407K Other 489K Latam 733K SE Asian 449K Filipino 1.0M The Big 3 7.3 M Black 1.8M Population (2006) = Forecasted size in 2031 South Asian 3.6M Chinese 2.7M 7

4 What s happening? NEW IMMIGRANTS LIKE TO RESIDE IN FOUR PROVINCES % of new immigrants (2006-2011) settling into each province 1% 5% 16% 12% 19% 2% Source: StaIsIcs Canada 2011 ImmigraIon & Ethno- cultural Diversity in Canada 43% 1% 8

What s happening? 5 VM WILL BRING AN ADDITIONAL $5 BIL TO CDN MANUFACTURERS BY 2017 Canadians (Millions) 7.0 6.6 6.3M Visible Minori\es in Canada ~800k increase 7.1M 6.2 2013 2014 2015 2016 2017 19% of Cdn Pop $29.5B Source: StaIsIcs Canada, 2010; Homescan data, 2012 Year $4.7B incremental 21% of Cdn Pop $34.2B 9

1) What s happening? 3) Global Insights 2) How ethnic shops 4) Homescan Panel (Canada) 10

Shoppers in Asia are 5X as likely to do quick trips 2X as likely to buy food for today s meal How ethnic shops 11

How ethnic shops ASIAN CONSUMERS COMPARTMENTALIZE THEIR PURCHASES 1) Ethnic Store How many stores do you typically visit to find all/most of the items on your shopping list on a rou\ne planned shopping trip? 2) Tradi\onal Banner 2 or more stores Source: PanelViews Omnibus October 2012 Base: n=6201 90% Of Chinese Cdns 80% Of S.Asian Cdns Manufacturers: Lis\ng decisions Presence in ethnic banners Retailers: Capture more $ into your banner Asian Shopping 12

How ethnic shops ASIAN CONSUMERS VIEW GROCERY SHOPPING AS FUN, FAMILY TIME More likely to have en\re family (3 genera\ons) on shopping expedi\ons 56% Asian shoppers ac\vely seek a demo in- store before buying Treat as weekend Excursion Mul\ple decision makers Fun, interac\ve store environment Sampling Organics 13

How ethnic shops ASIAN COUNTRIES HAVE GREATER BELIEF THAT ORGANIC FOODS EQUALS INCREASED SAFETY IN FOOD 100% Organics are Safer 50% 53% 70% 81% 29% 0% Canada China India Phillipines Organic strategy Source: Nielsen Global Online Survey Q1 2011 14

1) What s happening? 3) Global Insights 2) How ethnic shops 4) Homescan Panel (Canada) 15

Global Insights LEVERAGING OUR GLOBAL NETWORK, WE GAINED A BETTER UNDERSTANDING OF HIGH GROWTH CATEGORIES 16

TOP 50 HIGHEST GROWTH CATEGORIES Global Insights 100% 10% 80% 60% 18% 28% 10% 24% 42% 16% Baby Beauty Candy Drink 50% 22% 12% Food 40% 38% Health 15% 14% Household 20% Pet 6% 20% 15% 12% Other 0% Canada China India* Philippines * India - Top 26 categories Source: Nielsen Canada, China, India, Philippines China 17

CHINA S HIGHEST GROWTH CATEGORIES Global Insights Beauty Products China Growth (%) Toner 42% Facial Mask 40% Skin Moisturizer 27% Facial Cleanser 26% Confec\onery China Growth (%) Loose Pack ConfecIonery 26% ConfecIonary chocolate 24% Full brand confecionery candy 22% Beverages China Growth (%) Source: Nielsen China FuncIonal Drink 40% Asia TradiIonal Drink 32% India 18

INDIA S HIGHEST GROWTH CATEGORIES Global Insights HABA India Growth (%) Hair oils 23% Skin creams 22% Hair dyes 21% Toilet soaps 21% Sanitary napkins 20% Food Products Growth India (%) Milk foods 27% Salty snacks 27% Palm olein refined oil 20% Beverages 20% Source: Nielsen India Philippines 19

Global Insights PHILIPPINES HIGHEST GROWTH CATEGORIES Coffee Philippines Growth (%) Instant Coffee Mix 50% Roasted Coffee 34% RTD- Coffee 14% HABA Philippines Growth (%) Liquid Soap 17% Hair Treatment 15% Milk Products Philippines Growth (%) Yogurt 21% Cultured Milk 16% Source: Nielsen Philippines 20

1) What s happening? 3) Global Insights 2) How ethnic shops 4) Homescan Panel (Canada) 21

Homescan Panel WE KNOW WHAT CHINESE AND SOUTH ASIAN CANADIANS ARE PURCHASING What did you buy? Was it on sale? Where did you buy it? Chinese Over- index 22

Homescan Panel CHINESE OVER INDEX ON DRIED GRAINS, REFRIGERATED DRINKS, NOODLES, & BEAUTY PRODUCTS ($/buyer index) 2X Vegetables / Grains Dried 1.5X Pasta/Noodles/ Instant light lunches Refrigerated Drinks 1.5X Manufacturers: Product innova\on / expansion? Retailers: What are you stocking in your stores? Source: Nielsen Ethnic AcIon Package (Syndicated) Face care Skin care preparaion Interdental products Deals 23

60% % of expenditure on deal (By category) 55% Homescan Panel A HIGHER % OF CHINESE SPEND ARE ON DEALS 36% COMPARED TO 25% FOR GEN POP General Pop Chinese % of Expenditure purchased on deal 40% 20% 25% 36% 28% 36% 19% 18% 33% 0% Overall Source: Nielsen Homescan Data (Jan - Dec 2012) Blades / Razors Deal sensi\vity to your category? Dry Bread (breads\cks, crispbread, croutons, etc.) Categories Gum Where? 24

CHINESE LOVE ETHNIC GROCERS & WAREHOUSE CLUBS 3X Homescan Panel More likely to shop at Remaining Grocery Manufacturers: Where are your products listed? Retailers: Where are your customers shopping? Source: Nielsen Ethnic AcIon Package (Syndicated) 2X More likely to shop at S Asians 25

Homescan Panel SOUTH ASIANS OVER INDEX ON PREPARED FOODS, GRAINS, & MILK PRODUCTS ($/buyer index) 2.5X All Other Prepared Foods (e.g. specialty eastern food, pancake, baqer mixes) 1.9X Vegetables / Grains Dried 1.5X Manufacturers: Product innova\on / expansion? Retailers: What are you stocking in your stores? Source: Nielsen Ethnic AcIon Package (Syndicated) Cooking Oils & Spray Milk Yogurt Where 26

Homescan Panel SOUTH ASIANS LOVE DISCOUNT BANNERS AND DRUG STORES 3X More likely to shop at 2X More likely to shop at Manufacturers: Where are your products listed? Retailers: Where are your customers shopping? Source: Nielsen Ethnic AcIon Package (Syndicated) 27

5 KEY THINGS TO THINK ABOUT

5 Key Things 1 % of PopulaIon that is a Visible Minority 35 30 25 20 15 10 5 0 Source: StaIsIc Canada, 2010 VISIBLE MINORITIES ARE CHANGING THE CANADIAN LANDSCAPE Led by S. Asians & Chinese 1 in 20 $5 B/yr Opportunity by 2017 1 in 6 1 in 3 1921 1931 1941 1951 1961 1971 1981 1991 1996 2001 2006 2011 2017 2031 29

5 Key Things 2 THE WAY THEY SHOP IS DIFFERENT FROM MAINSTREAM CONSUMERS 1) Ethnic Store 2) Tradi\onal Banner 30

5 Key Things 3 INTERNATIONAL TRENDS CAN GIVE US AN INDICATION ABOUT AREAS OF GROWTH HABA Milk foods Salty snacks Beauty Confec\onery Beverages Coffee HABA Milk Products 31

5 Key Things 4 UNDERSTANDING CHINESE & SOUTH ASIAN CANADIANS IS AN ONGOING PROCESS 32

5 Key Things 5 THE OPPORTUNITY IS IN YOUR HANDS DEVELOP AN ETHNIC STRATEGY NOW! WANT Is your company aligned? SIZE - Have you quan\fied the opportunity? KNOW - Do you know this consumer? TEST Have you piloted a new ini\a\ve? TRACK Do you track performance on ethnic ini\a\ves? 33

ONLY THE TIP OF THE ICEBERG! Thank you! Bernice Cheung Ethnic Practice Area Lead (905) 943-8593 (416) 564-5428 Bernice.Cheung@nielsen.com 34