CONSUMER & MARKET TRENDS Raluca Raschip – Consumer Goods & Retail Director 1 FMCG turnover growth across Europe [in %] FMCG development Value Price Volume 1,9 2,5 2,9 7,8 -0,1 3,2 -3,6 3,1 1,2 1,2 -1,8 -4,9 2,5 1,3 -1,2 0,4 -0,2 -0,1 7,0 2,2 1,1 -0,4 Quelle: Europanel (GfK, KWP), MAT 6/2014 -2,4 0,8 -0,1 -1,6 -2,5 -2,5 2 What Drives FMCG evolution in Romania? Top 4 Drivers Food Inflation Savings Confidence Employment Source: GfK Pulse Syndicated Study 3 People-related values are very important for Romanians 1 2 3 Family Trust Honesty 4 Freedom 5 Sense of duty 6 Friendship 7 Origin 8 Financial Security 9 10 Knowledge Preserving the environment Consumer Panel Services, Romania, 2014 4 Some Values are becoming more important this year Fun +3 pp. Indulgence +5 pp. Stimulating Experiences +5 pp. Consumer Panel Services, Romania, 2014 vs. 2013 5 Growth Brands are matching consumer values to a high extent In case of Growth Brands, the level of matching is high: 79% In case of Burnout Brands, the level of matching is high: 17% 6 Food products are driving the consumption growth in 2014 Food +6% 2% Value Change H1 2014 Fresh Food +1% Beverages +2% Home Care +2% Personal Care -2% Consumer Panel Services, Romania, H1 2014 vs. H1 2013 7 Mainstream brands continue to shrink in 2014 18 20 Premium Brands 44 41 Mainstream Brands Economy Brands Private Labels Home Made 22 22 13 4 14 H1 2013 H1 2014 Mainstream segment decreasing 4 Consumer Panel Services, Romania, Value Shares (%) 8 Promotions are now barely differentiating the Modern Trade Channels Traditional trade 2013 2014 Modern Trade vs. Traditional Trade 1.8 1.7 Hypermarkets vs. Supermarkets 1.5 1.2 Hypermarkets vs. Discounters 1.4 1.1 Modern trade Hypermarkets Supermarkets Discounters Modern Proximity Stores Traditional Trade 26% 21% 23% 11% 14% Consumer Panel Services, Romania, H1 2014 vs. H1 2013, Promo Value Share% for H1 2014 9 In Romania, the Potential for Innovations is very high Better chance for an innovation to be tried Fewer products on the ROMANIAN market Avg. number of active SKUs per category 900 Better chance to be tried 800 DE ES 700 UK 600 BE 500 AT 400 FR NL 300 SE 200 RO Fewer innovations on the ROMANIAN market 100 0 30 40 50 60 70 80 90 Avg. number of innovations per category Cross-country analyses | © Europanel 10 Modern Trade is covering 54% of FMCG expenditures Hypermarkets 26 28 27 Supermarkets Supermarkets Discounters 15 13 14 8 2 9 2 9 2 50 47 46 Cash & Carry Modern Proximity Stores Traditional Trade 2012 2013 54% Discounters Modern Proxy H1 2014 Consumer Panel Services based on till roll, Value Share%, Romania 11 Consumers are shopping more frequently Value Change % 2 FMCG KPIs Changes by FMCG Baskets Frequency Change % 7 1 Fresh & Dairy 8 6 Food 8 Value per Trip Change % -5 -7 -3 Beverages 2 3 -1 Home Care 2 3 -2 Personal Care -2 -2 -1 Consumer Panel Services, Romania I FMCG H1’2014 vs. H1 ’2013 12 Attracting more shoppers was the winning card for Supermarkets How many shoppers?* 76 76 94 68 72 63 64 18 Hypermarkets Supermarkets H1'2013 94 Discounters H1'2014 19 Modern Proximty For 78% of Romanians shopping is still a pleasure Traditional Trade How often do they buy?** 53 15 16 17 20 Hypermarkets Supermarkets 10 11 Discounters 10 57 13 Modern Proximity Traditional Trade *Penetration / **Frequency Consumer Panel Services, Romania, H1 2014 vs. H1 2013 13 Retailer and Brand Experience are the key touch-points Previous Experience Retailer Brand Shelf info Products samples or demos WOM-friends and family Consumers Opinions Sites Online shoppers reviews Coupons Social media Brand Website Manufacturer apps TV or print advertising Ability to pay with my mobile device Store flyers Geo-locater In store displays Retailer website Shopping/retailer apps up smartphone or tablet Product packaging Brochures/flyers General Shopping sites Online experts reviews Price comparison websites Product Online Advertising *Source: Futurebuy, 15-45 y.o, Urban. Internet Users, 2014 14 E-Commerce in FMCG across countries New buyers …and their basket is 3 of online times bigger …but they prefer branded products, but only where online is small …and they buy mainly Personal Care and Pet Food Cross-country analyses | © Europanel 15 THANK YOU FOR YOUR ATTENTION! Raluca Răschip, [email protected] Consumer Goods & Retail Director, GfK Romania 16