What do we know about fresh produce consumption PMA A & NZ - Fresh Forum Newcastle March 2011 Martin Kneebone Director Freshlogic
Content Macro food market trends Food shopping consumer behaviour Household fruit & veg expenditure New channels Fruit Logistica 2011 - key observations
Our capabilities Survey to map shares and values Net-based technology Incentives for collaboration Corroborates with other supply chain inputs FOODmap+ capability to validate wholesale values export grocery specialised foodservice Inputs Farm Processing Imports Marketing retail domestic grocery convenience specialised Analysis: Value chain structures Value & volume drivers Pressure points & implications Trends/directions/outlook Key players & influencers foodservice dining out takeaway institutional event/leisure
Macro food market trends
Macro food market trends drivers impact how they manifest Macro trends Changed demographics More complex wants & desires Global economics Advancing technologies Value sensitivity..are driving change and conditions Increasing the demand for convenience Shopping frequency up Eating out now lifestyle Lower % of $ on food Care for food integrity New media landscape leading to: Share of stomach back to retail...after 5 yrs Trading down More product convenience Tech savvy media users More tech touch points Ethical foods awareness Love to cook +++
Food shopping consumer behaviour
Mealpulse household segments FL1: Singles & couples with lower income (S&C $) No children, lower income, eating out restricted by income Share of total households FL2: Singles & couples with higher income (S&C $) No children, Higher income and available discretionary dollars, eats out often FL3: Budgeting families Single and dual parent families with children, financially stretched and time pressured FL4: Established families Single or couples with children and above average income, at least 1 adult eats out regularly FL5: MT nesters 60 years plus, no children permanently at home at times they float in and out, have the income to eat out often but prepare and eat most meals at home. 18% 21% 25% 19% 18% Food market share 17% 20% 22% 27% 14% Food spend on take home 58-61% 51-53% 64-68% 58-61% 78-82%
Household food spending 1 b Food Spend per Week Average in Q4 10 Specialist Food Stores, 12.2% Breakfast, 1.4% Lunch, 8.4% Dinner, 11.6% 25.6% out of home Mealpulse Snacks, 4.2% Supermarkets, 62.3% Household food buying behaviour reflects a shift towards eating at home
Household food spending Total Home Food Spend Weekly average for Qtr 1 a Breakfast Lunch Dinner Snacks Supermarkets Specialist Food Stores MT nesters Established families Budgeting families S&C $ S&C $ Mealpulse $- $50 $100 $150 $200 $250 $300 $ Spend per Week
Household shopping trips & take home food spend Shopping Trips per Household Segment A-9.A MT nesters Established families Budgeting families S&C $ Supermarkets Specialists Eat Out Strong lifestyle influences exist that drive consumers to make several smaller top up shopping trips per week. S&C $ 0 1 2 3 4 5 6 7 8 Mealpulse No. of Trips (per Week) $161.46 Take Home Food Spend Weekly average Average e $ Spend per Wee ek $180 $160 $140 $120 $100 $80 $60 $40 $20 $- $27.25 $25.13 $26.18 $25.04 $26.34 $133.83 $138.69 $131.28 $130.73 $135.12 Specialist Food Stores Supermarkets Mealpulse
Fresh food share the strength of the specialist Pro oportion of Shoppe ers 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Supermarket Shoppers using Specialists - YTD Q4 2010 average WW YTD Q4 10 Coles YTD Q4 10 IGA YTD Q4 10 Mealpulse Bakery Greengrocer Fruit shop Fish shop Butcher shop Delicatessen Convenience store 25 Fresh Food Specialist
Fresh food share the strength of the specialist Advantages are robust and likely to keep them viable for the foreseeable future Ability to train and retain skilled staff is key strength Reasons for Shopping at Specialists B-13.A 100% BAKERY GREENGROCER FISH SHOP BUTCHER DELICATESSEN CONVENIENCE STORE Mealpulse Proportion of Responde ents 90% 80% 70% 60% 50% 40% 30% 20% 10% Strong advantages Mealpulse 0% Handy lo ocation Qui cker serv vice - less waiting r Lower regular prices Sp pecials Better range Better quality Bet service tter e, staff Sup pport indepe endent sto res
Fruit & Vegetable spend by Household >$50 $20 $49 $5 $19 < $ 5 Weekly Fruit & Veg spend variations across households Greengrocers enjoy more share of higher spending households 00% 0.0% 10.0% 0% 20.0% 0% 30.0% 0% 40.0% 0% 50.0% 0%
Market value Market value of $12.1B 1B Fresh Fruit, Fresh Nuts & Vegetables Flowers 50% 50%
Drivers - Seeking greater value Triggered by tighter economic climate Led to seeking value & trading down Technology has enabled price comparisons Private label expanded and compounded sales deflation impact The experiences & changes value have stuck Sentiment has stalled & saving has increased
Supermarket competitive intensity has increased Retailer "same store" sales & food CPI 10% 9% Woolworths Coles Food CPI 8% 7% 6% 5% 4% 3% 2% 1% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 0% 1% Q4 10 Q1 11 Q2 11
Communications - Promotional activity
Demand for convenience remains strong A Average price for vegetables $3.50 per kg Selling price per kg products No. of Basis for extra value n size Portio ies Varieti 11 * * 7 * * eparation Pre pr 16 * * * 12 * * 1 * 1 1 1 B Added value products do not mean you leave out entry level
New channel linfluences
New distribution channels most technology enabled
More technology touch points Touch screens are now mainstream
Fruit Logistica Berlin Feb 2011 Fruit Logistica i February 2011 Key observations
Fruit Logistica Berlin Feb 2011 Portion sizes are down The packaging to support smaller portions More product forms Managed varieties now the norm Expanded the logistics business model Sustainability evolved dinto a corporate value Organics specialists not just line extensions Processing machinery goes further
More questions than answers? For more detail Contact Martin Kneebone Freshlogic Pty Ltd More at www.freshlogic.com.au Subscribe to fresh Incite PH 03 9818 1588 E-mail martin@freshlogic.com.au