Building Upon Italy’s Export Program...Source: IRI CSIA Total Fresh Meat (FW & RW), Total U.S. All Outlet, 52 Weeks Ending 12/31/2015 MILLENNIALS SPEND MORE ON CHICKEN BUT OTHER

”Meat”ing Millennials!”

HOW MILLENNIALS ARE CHANGING THE MEAT CASE:

What to expect as Millennials mature

Larry Levin and Chris DuBois NAMI/FMI Meat Conference

3 Copyright © 2016 IRI. Confidential & Proprietary

1

3 4

Why Millennials matter

Millennial shopping behavior

Millennial impact on the meat department

5 Implications

2 Millennial myths


OUR METHODOLOGY

1 2 3 Time

Periods

Latest 104

Weeks

12/21/15;

Geography

MULO

Syndicated

Categories

Fresh and

Packaged Meats

4 Measures

Dollar Sales

The Shopper

National

Consumer

Panel

ShopperSights

The Voice of

Our Consumers

PEW Center

5


THE CONSUMER LANDSCAPE: DYNAMIC CHANGE; ENORMOUS OPPORTUNITY FOR GROWTH

Major Consumer/Shopper Trends

Changing family makeup and

decision making process

Importance of convenience and

shopping experience

Multi-channel shopping and

channel blurring

Increasing shift to mobile - $105B in ad

spend by 2020 on mobile platforms

alone

Quest for value = quality, price and

assortment

Increasing ethnic diversity among

US shoppers

eCommerce replacing brick & mortar with new business models (home delivery, click and pick)

From the 1970’s 500 to today’s 5,000 ads per

day

…with increasingly varied needs

…in a fragmenting

retail landscape

…with dramatically

more complex

media stimuli

Shoppers are more diverse

than ever

A tailored shopping experience including available product mix and availability plus specialized offers

The new path-to-purchase leverages

digital, social, mobile media

…requiring personalization


SILENT

BOOMER

GEN X

MILLENNIALS

DEMOGRAPHICS MATTER! MILLENNIALS BECAME THE LARGEST POPULATION SEGMENT IN 2015

Source: Pew Research Center tabulations of U.S. Census Bureau population projections released 12-2014

Projected Population by Generation (in Millions)

NOTE: Millennials refers to the population ages 18 – 34 as of 2015


MORE PRIME AGE WORKERS

Source: BLS / www.calculatedriskblog.com

+12MM by

2030


2 MILLENNIAL MYTHS


MILLENNIAL MEDIA BUZZ


MILLENNIALS ARE OF THE MOST NEGATIVELY STEREOTYPED GENERATIONS IN HISTORY

To connect emotionally with this generation, brands and advertisers must: Move past simplistic generalizations

Understand the misconceptions

Identify with Millennials as unique individuals


MILLENNIALS ARE THE MOST SELF-ABSORBED GENERATION EVER 1

90%

Equate success with being a good friend

68%

Equate success with working for a cause

they believe in

58%

Equate success with contributing to the

community

50%

Share information about causes on

social media


MILLENNIALS REJECT ‘TRADITIONAL’ LIFE PATHS 2

73% Employed

28% are Married

37% Own a Home

38% Have Kids

Timing of Lifestage Milestones Aren’t Linear

90% Work / Life Balance

83% Owning a Home

83% Being a Great Parent

75% Career Accomplishments

SUCCESS =


MILLENNIALS AREN’T BRAND LOYAL 3 44%

say they’re loyal to the brands they buy

41% GenX

45% Boomers

In the absence of meaningful differentiation, Millennials will switch for economical payoff.

62% store brands as good as

national brands

72% will switch

for the right price or deal

88% saving money

makes them feel smart

83% enjoy finding

the best deals

70% choose price over brand

54% GenX

58% Boomers

2in3 working with limited

grocery budgets

51% GenX

61% Boomers


0 10 20 30 40 50 60 70 80 90 100

Item Price

Requests from a Household Member

Shopper Loyalty Cards/Discounts

Recommendation from a Friend/Family Member

In-Store Coupons

Coupons Received in the Mail

In-Store Circulars

Product Label/Packaging

Signs or Displays In-Store

Coupons Downloaded on My Smartphone/Tablet

Product reviews online

Newspaper Circulars

Information or Promotion from a Retailer App on my…

Print Ads in Newspapers or Magazines

Information or Promotion from a Retailer Website or Email

TV advertising

Information or Promotion from a Manufacturer Website or…

Factors Influencing Millennials’ Brand Purchase Decisions

Millennials are strongly influenced by the

recommendations of others in person, on social and in product

reviews.

MILLENNIALS AREN’T INFLUENCED BY TRADITIONAL MARKETING 4


3 MILLENNIAL SHOPPING BEHAVIOR


MILLENNIALS ARE CHOOSING BRANDS THAT MATCH THEIR NEEDS AND BELIEFS

HEALTHY/NATURAL

COST SAVINGS INNOVATION


MILLENNIALS ARE USING DIGITAL TODAY

Own a smartphone

48%

say they’re unable to function

without their smart phone

6 hrs/day

average time spent online

45% say they’re

early adopters of technology

29% use a mobile app to pay for

purchases

52% prefer brand updates in email vs.

text


DIGITAL PLAYS A VARYING ROLE IN PRE-TAIL ACTIVITIES ACROSS CATEGORIES SIGNIFICANTLY MORE MILLENNIALS USED DIGITAL PRE-TAIL THAN SHOPPERS AGED 35+

xxx xxx

xxx

xxx

xxx

xxx xxx

xxx

% USING ANY DIGITAL DEVICE PRIOR TO GOING TO THE STORE

48% personal

care

46% frozen food

42% OTC

medications

37% non-alcoholic

beverages

36% meat/ poultry

35% snacks

29% dairy

26% beer/wine/

spirits


MORE MILLENNIALS (83%) MAKE GROCERY LISTS THAN OLDER SHOPPERS (72%)… …AND THE VAST MAJORITY HAND-WRITE THEM

xxx xxx xxx

80%+ OF SCHOOL SUPPLY, PAPER PRODUCTS AND PERSONAL CARE

SHOPPERS MADE LISTS

82% 83% 83%

xxx xxx xxx 62% 69% 74%

LIQUOR, SNACKS AND NON-ALCOHOLIC BEVERAGE SHOPPERS

WERE LEAST LIKELY TO MAKE LISTS


4 IMPACT ON THE MEAT DEPARTMENT


LIST MAKING AMONG MEAT/POULTRY BUYERS

81% Of Meat/Poultry

buyers made a list

Q14. Which of the following did you do before you shopped for insert category from S.2? Q15. Did you make a note (mental or written) to buy…?

YET 90% Do not list a brand


FINAL DECISIONS ON THE SPECIFIC MEAT/POULTRY ITEM(S) OFTEN HAPPEN AT SHELF

36%

32%

19%

13%

Base = Past Week Buyers of Meat/Poultry Products

Planning vs. Openness in the Item Decision Process

Decided what to buy before

shopping and bought the

planned item

Planned to buy category, but decided on exact item in store

Unplanned decision in

store

Decided what to buy before

shopping but was open to changing

mind at shelf

64% of Meat/Poultry buyers

are open to being influenced in store


MEAT/POULTRY BUYERS SHOPPING ON DEAL

34%

33%

28%

26%

23%

20%

14%

11%

10%

7%

4%

Looked for special/sale pricing at the shelf

Selected a product because it was on sale

Checked the in-store circular/flyer for sales/deals

Looked for special promotions

Selected a product because it had the lowest price per unit/volume

Selected a product because it was the lowest-priced item

Looked for special displays

Selected a product because I had a coupon for it

Looked for coupons at the shelf

Used a digital device (smart phone, tablet) during the shopping process

Interacted with/asked questions of store personnel

In-Store Activities Among Past Week Meat/Poultry Buyers

Base = Past Week Buyers of Meat/Poultry Q21. Which of the following did you do while you were shopping for category from S.2 ?


23.0%

8.1%

14.9%

EDIBLES

26.0%

11.3%

14.7%

MILLENNIALS W/KIDS ARE A LARGER PERCENTAGE AND ARE GROWING FASTER THAN THOSE W/O KIDS

TOTAL POPULATION

+0.8

+0.2

MILLENNIALS MILLENNIALS NO KIDS MILLENNIALS W/KIDS

+0.6

TOTAL STORE

+0.8

+0.1

+0.7

24.1%

8.2%

15.9%

+1.0

+0.2

+0.8

Source: IRI CSIA Total Store View, Total U.S. All Outlet, 52 Weeks Ending 12/31/2015

Total U.S. All Outlet


98% 91% 90%

81% 74%

60%

-0.3

-0.4 -0.6 -0.4

-0.4

+0.3

Total

CHICKEN BEEF/VEAL TURKEY SEAFOOD/

FISH

Source: IRI CSIA Total Fresh Meat (FW & RW), Total U.S. All Outlet, 52 Weeks Ending 12/31/2015

THE PERCENT OF HOUSEHOLDS BUYING MEAT HAS DECLINED SLIGHTLY

% Households Buying Total U.S. All Outlet

PORK


$502

$107

$190

$90 $79

$36

+6%

+4%

+6%

-0.3

-0.0 -0.9

Total

CHICKEN

BEEF/VEAL

TURKEY

SEAFOOD/ FISH

HOWEVER, SPENDING REMAINS STRONG

+9%

+1% +7%


$ Per Buyer Total U.S. All Outlet

PORK


$473

$125

$167

$81 $65

$35

+10% 91

+4% 117

+10% 84

+13% 90 Total

CHICKEN

BEEF/VEAL

TURKEY

SEAFOOD/ FISH


MILLENNIALS SPEND MORE ON CHICKEN BUT OTHER PROTEINS ARE SEEING FASTER GROWTH

+17% / 79

+4% / 97


PORK


$522

$137

$191

$90 $67

$37

+17% 103

+9% 128

+16% 100

+18% 100 Total

CHICKEN

BEEF/VEAL

TURKEY

SEAFOOD/ FISH


MILLENNIALS W/KIDS SPEND AVERAGE ON ALL FRESH MEAT EXCEPT CHICKEN

+27% / 85 +11% / 102


PORK


MILLENNIAL SPEND MORE THAN DOUBLES WHEN FRESH MEAT IS IN THE BASKET

$39 out of basket

$81 in basket

108% More $ Spent

per Trip



Total


MILLENNIALS W/KIDS

99% 92%

52%

35%

12%

98% 93%

45%

35%

9%

MILLENNIALS W/KIDS INDEX HIGHEST AT WALMART AND OTHER MASS

TOTAL HHs

-0.3

-0.7

+2.3

-1.3

ALL OUTLET GROCERY X WALMART CLUB M SC X

IRI: CSIA Total Fresh Meat (FW & RW), Total U.S. All Outlet, 52 Weeks Ending 12/31/2015

+0.6

MILLENNIALS

97% 91%

46%

31%

11%

-0.6 -1.5

+4.5

+1.7

-2.0

99 98

101

88

126

-0.4

-1.8

+3.9

+2.0

-2.2

101 99

115

99

135

% Households Buying Total U.S. Total


MILLENNIALS SEEKING PROTEIN


MILLENNIALS SEEKING HIGH PROTEIN CLAIMS, INDEX AT 114 TO TOTAL EDIBLES


11%

42% 23%

24%

Generation X Baby Boomers

Retirees Seniors Millennials

10%

39% 24%

27%

Generation X Baby Boomers

Retirees Seniors Millennials

% OF EDIBLE $ SALES % OF EDIBLE $ SALES W/PROTEIN CLAIMS


24%

27% 26% 25%

14%

% of $ Spent

Total Edibles

+1.0

+0.7 +1.8 -0.1

+0.6

MILLENNIALS MAKE UP A HIGHER % OF TOTAL DOLLARS IN MANY HIGH PROTEIN CATEGORIES

100

112 106 105

58

Yogurt Peanut Butter

Jerky Snack nuts



SOURCES OF PROTEIN CONTINUE TO EXPAND


Activating a Key Millennial Segment

“New Traditionalists”


Free Spirits

Young, Single, Involved, Hispanic, College, Social, Impulsive, Trendsetter, Success =

Things/Power/Admiration/Entrepreneurship

Struggling Wanderers

Not Highly Educated, Struggling Financially, Many Not Employed, Store Pricing Drives

Purchasing, Not Strongly Digitally Connected

New Traditionalists

Affluent, Educated, Married, Faith-Involved, Values-Driven, Healthy, Role

Model, Good Financial Habits

Concerned Aspirationalists

Female, Struggling Financially, Moms, Worried, Smokers, Time-Strapped, Social

Media Devotee, Convenience Driven, Shopping is Therapy, Price Driven

Conscious Naturalists

Female, Moms, Happy but Often Overwhelmed, Eco-Conscious, Minimal Processed Food,

Homeopath, Planner, Buys Natural/Organic, Locally-grown, Fiscally Responsible

Confident Connectors

Affluent, Ethnically Diverse, Positive, Confident, Social, Successful, Leader, Socially Conscious, Success = External Validation, Healthy, Foodie,

Specialty Store Shopper, Digitally Savvy

13% 21

%

21%

13%

15%

17%

MILLENNIALS ARE NOT A ONE-SIZE-FITS-ALL GENERATION, SIX DISTINCT SEGMENTS EMERGE


Conscious Naturalists

13% 21

%

13%

Involvement with Purchasing Refrigerated and Frozen Chicken

Free Spirits

% purchasing: 9% 69 Index

Struggling Wanderers


15%


Confident Connectors 17%



Concerned Aspirationalists

New Traditionalists

21%



21%

MEET THE NEW TRADITIONALIST SEGMENT DREAM BIG. PLAN WELL. WORK HARD. ENJOY LIFE.


START ACTIVATING WHERE NEW TRADITIONALISTS LIVE

ShopperSights 6.4 TV Markets

Target Definition: Experian Mosaic Segments where MilleniaLink Segment HH Penetration 120+

Salt Lake City, UT 47.2%

195

Austin, TX 39.6%

164

Top 10 Markets Ranked on Pen. Index & where Target HHs 150K+

Dallas/Ft. Worth 32.5%

134

Denver, CO 35.0%

144 Las Vegas, NV

33.5% 139

Kansas City, MO 31.0%

128

Portland, OR 30.7%

127

Phoenix, AZ 30.7%

127

Minneapolis/St. Paul 30.9%

128

Columbus, OH 30.8%

127

Highest Indexing Markets

2nd Highest Indexing Markets

3rd Highest Indexing Markets


Sports Stadiums & Arenas Elevator Ads Bus Ads

Outdoor & Alternative

Ads

Source: ShopperSights 6.4 – Simmons National Consumer Survey Dec 2014

START ACTIVATING NOW IN MEDIA NEW TRADITIONALISTS CONSUME



Preferred Websites




Favorite Cable TV Networks





Preferred Magazines


ShopperSights 6.4 Chain Store Guide & InfoScan Major Food-Club-Mass–Drug-Dollar Retailers

START ACTIVATING NOW WHERE NEW TRADITIONALISTS SHOP

Selected Representative Retailers Target ACV $1B Top Indexed Retailers

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCMHF1Omsi8gCFQmlHgodDngOaA&url=http://fontsinuse.com/uses/7888/albertsons-logo-and-signs&bvm=bv.103388427,bs.2,d.dmo&psig=AFQjCNFc4PGEkz0EtFXGiwVYn1hD4Rud8Q&ust=1443035643486134


5 IMPLICATIONS


WAYS TO CAPTURE THE MILLENNIAL SHOPPER

Increase focus on in-store marketing;

both digital and conventional

1 2 Aggressively

shift marketing spend

into digital


3 4 Invest in social

media marketing and capabilities

WAYS TO CAPTURE THE MILLENNIAL SHOPPER

Move beyond demo groups to activate targeted segments


5 WAYS TO CAPTURE THE MILLENNIAL SHOPPER

Scream “the

original source of protein”


Larry Levin 818.450.7614

[email protected]

Chris DuBois 312.342.8916

[email protected]

Documents

Building Upon Italy’s Export Program...Source: IRI CSIA Total Fresh Meat (FW & RW), Total U.S. All Outlet, 52 Weeks Ending 12/31/2015 MILLENNIALS SPEND MORE ON CHICKEN BUT OTHER