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The New Recommended Daily Allowances Are Coming!!! Are you ready?
In just a couple of days one of the most impactful events for the
CPG industry and consumers will occur, and its impact will have a
huge effect on all of the food trends in 2005. The 6th Report of the
U.S. Dietary Guidelines Advisory Committee on Dietary Guidelines for
Americans will be released, and this mammoth (500+ pages) report will
contain remarkable changes that are in line with programs developed
by top proponents of a vegetable and fiber-rich diet.
The highlights include advice for portion control, a re-emphasis
of the benefits of fruits, vegetables, and grains, a review of the
pros and cons of the most popular diet plans (the conclusion was that
low fat, high fiber diets do promote weight loss, particularly with
type 2 diabetes and the use of glycemic index or load as a criterion
for dietary guidelines is without merit) a finding that will no doubt
seal the fate of low carb product offerings.
The topline for food marketers:
Exercise is essential for everyone, with moderate to vigorous
physical activity of up to 60 minutes per day for adults,
particularly those who are obese.
Increase intake of fruits and vegetables to five to 13
servings per day, with a suggestion of nine for those eating 2,000
calories a day.
Whole grains will be added to the new Food Pyramid, and the
recommendation is to eat at least three servings of whole grains per
day.
Eat fish twice a week.
Limit salt intake to avoid hypertension; recommendations vary
between 1,200mg and 2,300mg per day.
I have little doubt that the new Recommended Daily Allowances
(RDAs) will continue to fuel the "Nutritional Correction" that many
food brands have already embarked upon, but this time the government
is actually giving the food industry some needed communications
assistance through an intense publicity program to help communicate
the recommendations. Look for more clarity on packages and in
advertising, and who knows, just maybe, 2005 can be the year of
healthier eating.
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ACNielsen's latest annual Consumer & Market Trends Report is now
available. For information and to order
click here.
Warehouse Clubs have established themselves as a major retail channel
that is here to stay. Find out everything you need to know about the
consumers who shop this channel in ACNielsen's latest study.
Click Here
for more details.
The FMI/Rodale Shopping for Health survey of consumers is available.
Click here for more details.
ACNielsen's latest Private Label Trends Report is now available. For
information,
click here.
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January 10, 2005
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Paper or Plastic?
The last thing any retailer needs these days is one more
challenge, especially when this one includes taking on Donald Trump
and New York Yankees' owner George Steinbrenner.
Then again, maybe you should take them on as this is a battle
that is costing you money. Plus, if you handle it correctly, you can
change the situation, and you can win.
For a host of competitive reasons, an ever-increasing number of
operators are accepting credit and debit cards for purchases in
supermarkets, and every statistic shows that customers approve. The
percentage of goods purchased with cards rises each year and only
promises to grow thanks, in part, to advertisements featuring
celebrities such as Trump and Steinbrenner.
Convenience is only part of the picture. For retailers, this
shift to plastic is bringing a host of new costs in processing these
transactions plus all kinds of new complexity at the front end where
the last thing we need are new costs and new reasons for delays.
To help you sort this out and to help you understand the rights
operators have when talking to customers, FMI created a training
video for cashiers on the basic differences involved in handling card
transactions. This video clearly lays out the advantages and
disadvantages of pin-based versus signature debit cards and presents
easy answers to some of the key questions you will get from customers.
Simply put, pin-based is less costly, less time consuming and
less complex for both the retailer and the customer. There are
strong arguments as to why pin-based transactions are more secure for
your shoppers. Yet, because pin-based makes less money for the card
companies, those ads featuring all those celebrities tell your
customer to do just the opposite.
It's a message you need to counteract.
You can find the video:
Debit or Credit...It Does Make a Difference on FMI's website
at:
http://www.fmi.org/elect_pay_sys/eps.htm.
It's a powerful training tool that should become an essential part
of cashier training. This video is just one of the tools we've
created to support the settlement of the lawsuit FMI and key
retailers filed against the card companies.
Remember, these transaction fees are coming right out of your
bottom line, and those higher costs lead to higher prices for
shoppers. The facts will speak for themselves. Get your folks
trained and ready, so they can be the ones to say "You're Fired!" to
Donald Trump's commercials.
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Bright Days Ahead
As the New Year dawns, consumer confidence is escalating, with
the outlook for business stronger than it has been for several years.
Now is the time to insure long-term profitability by focusing on
top-line growth. While effective cost management will always be
important, the foundation of true success is revenue growth.
Hockey great Wayne Gretsky used to say that you have to skate not
to where the puck is, but to where it's going to be. Great companies
anticipate where consumers will be and what they will want. They
drive innovation, pumping excitement into mature categories or retail
formats, and inventing completely new categories and shopping
experiences.
A tireless quest to know one's customers is the most effective
long-term strategy for anticipating their future needs. At ACNielsen,
one of our strongest commitments is to provide the most comprehensive
consumer insights available - who's buying your products, shopping
your stores, switching to the competition, and why.
That commitment explains our investment in our Homescan consumer
panel, growing it to more than 125,000 households by the end of this
year - enabling us to provide the most comprehensive insights about
ever more narrowly-defined consumer segments. That commitment also
explains why we were the first to deliver all-outlet sales analysis
that incorporates manufacturer shipment data, a capability we plan to
greatly expand in 2005 so that we can capture more and more of
consumer spending.
But our consumer insights vision extends even further - from what
has happened to what will happen in the future. The
rich collection of VNU-owned consumer insights organizations, along
with our extensive third party data integration capabilities, makes
us uniquely able to understand and anticipate consumer behavior as
never before.
Lastly, because consumer attitudes and behaviors change quickly,
we are committed to providing information faster than ever. From
online survey capabilities to a soon-to-be announced online
collaboration tool - we're focused on "right-time" delivery of
business intelligence, getting it in the hands of those who need it
when they need it.
I am very excited about the CPG industry's prospects for success
this year and we're confident that our relentless focus on consumer
understanding will give you the insights you need for all-important
top-line growth this year and beyond. Here's wishing you much
success in 2005.
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Sparkling Wine and Champagne: Increase Usage Occasions, Increase the Profits!
February is almost here, and with the impending Valentine's Day
holiday, florists, chocolatiers and greeting card marketers are in
seventh heaven as the V-Day occasion represents a significant portion
of their yearly revenue stream.
In the Beverage Alcohol category, it's the marketers and sellers
of champagne and sparkling wine that can be heard clinking their
glasses from sea to shining sea. And why shouldn't they? According to
ACNielsen all-channel data (Food/Drug/Mass, excluding Wal-Mart data),
while the Sparkling Wine segment (including champagne) underperforms
for most of the year, it spikes around the winter holidays and does a
nice Valentine's Day business.
Click on thumbnail to enlarge, or click here.
Looking at weekly Sparkling Wine sales compared to the average
one-week sales, the segment begins over performing in mid December,
reaching its zenith during the week including the New Year's holiday
with an index of 641 (which, in English, means Sparkling Wine sales
are over six times higher than their average one-week sales). The two
other periods with significant Sparkling Wine sales are the weeks
including Thanksgiving and Valentine's Day.
Click on thumbnail to enlarge, or click here.
With a little ingenuity in terms of in-store marketing and
merchandising, there's no reason that Champagne and Sparkling Wine
cannot create a steadier stream of revenue throughout the year.
As the ACNielsen sales index figures would attest, it's not a
tough sell for sparkling wines and champagne in February. But what
about July? Beyond the index, in terms of sheer dollar volume, the
two-week period ending 02/21/04 netted over 35 percent more dollars
across all retail channels (Food, Drug/Mass, excluding Wal-Mart data)
as the two-week period ending 7/10/04 ($14 million to $9 million,
respectively). Both reporting periods contained holidays (Valentine's
Day, July 4th). Only one, however, was promoted. The wine industry
might do well to look at the savvy displayed by beer marketers in
this instance.
Beer sales, historically, waned during the post-holiday freeze
out, when trying to sell a nice cold one in Edina, Minnesota, Calais,
Maine or Butte, Montana offered the same kind of challenge as selling
long-johns on a sweltering mid-summer night. But then came the Super
Bowl and, more specifically, that uniquely American tradition known
as the Super Bowl Party. Thanks largely to inventive beer marketers
the beer category now enjoys a significant spike in late January.
But has anyone drilled down into the composite psychographic
paradigm of the prototypical Super Bowl Party? Generally speaking,
you have four distinct groups at these gatherings.
Group A consists of the people sitting around the tube that are
actually watching the game trying to impress each other with
their vast football knowledge. Members of Group A are generally male,
and primarily drinking beer and eating chips.
Then, you have Group B -- those gathered in the kitchen or
adjacent areas of the viewing location whose only interest in
watching what's on the screen happens during stoppages of play and
the much-heralded commercials that embellish the viewing experience.
Primarily female, Group B can probably be found sipping wine and
nibbling on cheese and crackers.
Group C, the rugrats, are out of sight, out of mind -- in the
basement, den or bedroom playing video games and/or wreaking havoc,
and Group D, disenfranchised teens, are gathered amongst themselves
in whichever portion of the premises -- indoors or out -- that adults
are least likely to visit.
Among these demos, it's Group B with whom champagne and sparkling
wine marketers are missing a golden opportunity. All the elements are
in place: an audience that enjoys bubbly in a festive, celebratory
environment. Just think what an eye-catching sparkling wine display
set up right next to the Super Bowl/beer promotion would do to spur
incremental sales.
So, too, in July, we as a nation take time out to relax, picnic,
shoot off fireworks and celebrate our nation's birth. The
Independence Day holiday is one of the "make-or-break" periods in the
beer-selling year and is accompanied by heavy promotions among all
the major players targeted, of course, at their primary consumers:
young adult males. Why not target young adult females, as well, by
promoting sparkling wine and champagne? It makes perfect sense --
different targets desiring different products at a shared occasion.
In addition to the Super Bowl and 4th of July, there are several
celebratory occasions throughout the year -- Cinco de Mayo, Memorial
Day, Labor Day, tailgating parties in the fall, for instance -- that
are heavily promoted by beer marketers and could easily have
concurrent sparkling wine promotions run
to attract separate targets at the same occasion.
And what, exactly, would sparkling wine consumers bring to the
table? More disposable income, for starters. According to ACNielsen
Homescan data, the beer category, particularly light beer, over
performs, albeit marginally, among households earning $70,000 or
more. Sparkling wine, meanwhile, is extremely strong among high
earners, indexing at 215 with households earning $70K or more
(compared to beer's 113 in the same group).
It's food for thought for the manufacturers of Sparkling Wine and
the retailers who sell it. With a little more promotional focus,
champagne toasts during Super Bowl parties may become as commonplace
as all of those high fives.
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Do Consumers Do As They Say?
A significant advantage that consumer panel data brings to both
manufacturers and retailers is the ability to view behavioral and
attitudinal measures from the same households. As these measures are
combined, they yield consumer insights not possible through
standalone custom survey research projects. And they enable us to
answer a key question: Do consumers do as they say? This question
came up recently as we were sharing results from a joint
ACNielsen/FMI study on Shopping for Food in 2004 with a
leading manufacturer of food products. So, we took the challenge and
did some additional analyses via the ACNielsen Homescan consumer
panel to address the issue.
When it comes to shopping choices, it appears that consumers do,
in fact, shop as they say they do. In the following table we see
that households who like 1-stop shopping for their groceries make
fewer all-outlet shopping trips. The same is true for households who
shop in 1 or 2 stores and for households who tell us that they don't
have time to shop multiple stores. Conversely, households who say
they shop in a wide variety of stores make many all-outlet shopping
trips.
Click on thumbnail to enlarge, or click here.
We also see that attitudes towards grocery shopping drive
differences in the number of grocery banners (i.e., Kroger, Safeway,
etc.) where U.S. households shop. Households who prefer not to shop
around shop in a fewer number of grocery banners, while households
who enjoy shopping in a wide variety of stores shop in more competing
grocery stores.
Click on thumbnail to enlarge, or click here.
Finally, we see that consumers who have different attitudes with
respect to the importance that they place on private label or
store/trade deals show much different purchasing patterns.
Households who strongly agree that they buy store brands exhibit
private label sales that are 33 percent higher than the average for
all U.S. households. And, households who strongly agree that they
use ads for planning their weekly grocery shopping exhibit
store/trade deal sales that are 47 percent higher that the average
U.S. household.
Click on thumbnail to enlarge, or click here.
In today's competitive world, retailers and manufacturers are
looking to leverage consumer insights to help them build winning
strategies. It is no longer acceptable to have a one-sided view of
consumer buying or shopping habits and practices. Linking consumer
attitudes with actual shopping behavior not only provides
manufacturers and retailers with an understanding of how consumers
think and what is important to them, it enables quantification of
attitudinal measures with behavioral measures from the same
households. So, when qualitative research uncovers an attitudinal
shift or trend, the linkage with behavior provides a quantitative
measure to determine whether or not a reaction to the shift or trend
is worth the investment.
For further information or to arrange a comprehensive
presentation on consumer shopping patterns, please contact Todd Hale
at thale@acnielsen.com or
859-905-4615.
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OATS: Sweet to Taste, Sweeter to Sell
Oatmeal has had its patina of dullness, an ordinariness that
economical, plentiful foods often have. Yes, it's healthful, it's
cheap, it's easy to make, but we now have an opportunity to make
oatmeal fun, more accessible and increase the category's sales.
One way to accomplish these objectives is to maximize the FDA's
low-key but powerful message issued in 1997 that "soluble fiber from
oatmeal in a diet low in saturated fat and cholesterol may reduce the
risk of heart disease." (Soluble fibers include gums such as beta
glucan found in quantities of 55 percent in oatmeal, along with 45%
insoluble fiber.)
Another way is to take advantage of the latest dietary guidelines
that call for an average of three and a half cups of grain per day.
Any business involved in oats and oatmeal should view this as a
golden opportunity to turn up the marketing volume.
The recommendations of the 2005 Dietary Guidelines Advisory
Committee Report for Americans are the most far-reaching ever. The
guidelines have a strong message: make most of your diet fruit and
vegetables; add some grains, but only traces of animal protein. That
makes a cup of oatmeal with fresh fruit the ideal breakfast meal or
afternoon snack. And, because oatmeal is also a food suitable for all
ages, all market segments - from older Americans to children, from
teens to the yuppies and boomers - are "oatmeal friendly."
Marketers and retailers alike would be well advised to follow the
path of Quaker Oats and others who have made oatmeal "instant" and
available in more convenient forms of packaging as well as offering a
wider variety of tastes with cinnamon, apples, and other flavors that
have little or no sodium, high quantities of fiber (e.g., more than a
bran muffin) and are full of B vitamins.
Help consumers think of oats and oatmeal as an essential
ingredient to add to other foods in place of white flour, white bread
crumbs, or as a thickening agent. Retailers might consider adding
oatmeal "meal" or flour instead of white flour to in-store baked
goods, which give added value and nutrients to the product. In the
deli, add ground oatmeal to the meatballs for extra flavor and
nutrition. Offer recipe suggestions that are out of the ordinary and
will give consumers immediate benefits beyond the nutritional
profile. In the wake of the recent rise in the prices of tomatoes,
adding oats as a thickening agent to canned tomatoes make them taste
richer, thicker, more "homemade" and more economical.
Expect more consumers across all demographics to be reading
labels and searching for the fountain of youth in every supermarket
aisle. Whole grains have a unique opportunity to capitalize on the
new RDAs as they are already recognized for their healthful benefits.
In-store displays and samplings will go a long way to increase sales
and attract new customers.
Click on thumbnail to enlarge, or click here.
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Consumers Boost Retail Sales at Last Minute
In a season described several times as "consistently inconsistent",
the 2004 holiday shopping season seems to have ended on an up note.
With MasterCard and Visa each reporting more than $4 billion in
charges on Christmas Eve, retailers are breathing a collected sigh of
relief...for the moment.
The final tally will not be known for a few more weeks with the
redemption of gift certificates that could push overall retail sales
to an all-time high. Generally, the sale of gift cards is not figured
in sales tallies when purchased, but when redeemed. So many consumers
do not redeem the certificates in time or lose them or simply forget
about them that some retailers view this as "extra cash," which can
be billions a year. It is money in their pockets but it clouds the
figures tracked by retail analysts. Retailers are hoping to lure gift
card holders with an even earlier introduction of spring merchandise
at full suggested retail prices as the items up to 70 percent off
begin to look more and more tired to savvy shoppers eyeing items for
themselves rather than gifts for others.
As expected, online sales soared over those from 2003 by several
billion dollars, as more and more consumers become comfortable buying
online, and more retailers see the benefit of offering access to
consumers both off and online. Still, veteran online purveyor
Amazon.com was the absolute star in online sales, posting $2.4
billion that included one record day of 2.8 million transactions. The
healthy sales reflect Amazon's continuous foray into worlds other
than books, DVDs, and CDs. With jewelry, house wares, and appliances
recording huge surges, Amazon.com is proving to be the place to shop
for many.
Diversifying appears to be the healthiest direction any retailer
can take, and many analysts who thought 2004 marked the demise of
mall shopping are rethinking their projections as consumers play
online research against in-store shopping.
One expected surge was continuous purchases of luxury items
throughout the season. In fact, most of the credit card sales noted
above for Christmas Eve were for items costing $1,000 or more,
further indication that high-end products spell high value for many.
Among these items were luxury accessories like purses and scarves for
women, laptops, gadgets for downloading music, flat screen
televisions, and a boost in fine wines and luxury automobiles,
primarily attributed to year end bonuses for traders on Wall Street.
The credit card companies also reported overall purchases, which were
not all gift items. The totals, impressive though they are, reflect
everything charged, from gifts to groceries to coffee or meals in
between shopping sprees.
Look for a recap of year-end CPG sales in the next issue of F3.
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Super Bowl: The "Other" Food Story
When Super Bowl XXXIX kicks off on Sunday February 6th many retailers
and brand managers will be hoping that the fans of what has become a
major at-home food event will include their products in the
festivities.
Advertising, coupons and in-store displays have already started
to appear, hoping to influence the 89.8 million Super Bowl television
viewers, reported by Nielsen Media Research, who are searching the
aisles for the perfect foods and beverages to accompany the big game.
But there's another sales story which has been overlooked: at what
point do shoppers buy which Super Bowl foods.
Last year's Super Bowl was held on February 1, 2004, and
conventional wisdom might suggest that shoppers stock up for their
Super Bowl party in advance. Not for all products.
Click on thumbnail to enlarge, or click here.
Looking at the index for weekly sales, as compared to the average
during the three weeks prior to the week ending 1/31/04, highlights
those items that are planned further in advance compared to those
that are bought on game day.
Items where freshness counts, such as refrigerated Dips and Dough
Products, saw their strongest sales spikes on game day, while items
with more staying power such as Nuts, Frozen Pizza/Snacks and
Crackers saw their strongest spikes the week leading up to game day.
Non-alcoholic beverages, such as soft drinks, saw nice sales
bumps during both weeks, while purchases of alcohol-based beverages,
such as beer and coolers, were strongest on game day.
Candy purchases were also especially strong on game day last
year, perhaps reflecting last-minute "planning" on the part of party
hosts.
For retailers who want to maximize their potential sales for
Super Bowl, a key element is in-store displays and setting them up as
early as possible to induce earlier purchases. Retailers should also
think beyond beer and snacks, and offer their customers a wider and
more interesting array of Super Bowl foods. Marsh supermarkets, for
example, tie their football food displays to their local team's
colors. Huge displays of "blue foods" are created to tie in with the
team color of the Colts.
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COUNTRY-TO-COUNTRY: A Look at the Fastest Growing Categories in the Mexican Grocery Channel
Convenience continues to play a major role in driving sales in the
U.S. Grocery Channel. Meal Starters, a category led by brands
including Betty Crocker Slow Cooker Helper, Banquet Meal Toppers,
DelMonte Casserole Bakes, Tony Chachere's and The Gluten Free Pantry,
continues as the number one fastest growing category. Notable is the
increase in "frozen" beef steaks and pork products, driven by
conveniences of packaging as well as price, as compared to similar
offerings in the fresh meat case. Dietetic candies, both chocolate
and non-chocolate also made the list, no doubt fueled by both
consumers dieting for appearance (i.e., to lose weight) as well as
those dieting for health reasons, such as those afflicted with
diabetes.
Just south of the border in Mexico, the U.S. influences continue
as we see Nutrition Bars in the number one slot. Three of the ten
fastest growing categories were beverages led by flavored milk and
milk modifiers, (i.e., fruit and chocolate flavors in liquid or
powder form) and followed by Isotonics. American retailers and brand
managers can use this information to help them merchandise their
product mix in those geographic areas where both non-acculturated and
acculturated Hispanic shoppers are settling.
The Category listing for Mexico includes self-service stores
(traditional stores and government stores are excluded).
Click on thumbnails to enlarge
Use this link if you've received the text version
for graph one (
http://www.factsfiguresfuture.com/enlarged/Jan05C2C1.jpg) and this
link for graph two (
http://www.factsfiguresfuture.com/enlarged/Jan05C2C2.jpg)
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The following slides use indices to compare retail channel
performance vs. year ago on three metrics: dollar sales, number of
shoppers, and shopping frequency. An index of 100 means there has
been no change. Among the key findings...
Dollar sales growth at Dollar Stores and Convenience/Gas
continues to outpace other channels.
Growth in Dollar Stores stemming primarily from more shoppers.
Mainline grocery stores continuing to lose shopping trips.
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Click on thumbnail to enlarge, or click here.
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Click on thumbnail to enlarge, or click here.
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Click on thumbnail to enlarge, or click here.
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Facts, Figures and the Future is copyrighted and may not be
reproduced without prior permission. For more information about the
publication, please contact Phil Lempert at 323-860-3070 or via
e-mail at
PLempert@FactsFiguresFuture.com
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