The future for shellfish products in retail markets and how to handle the challenges?

jonathan@jonathanbanks-associates.co.uk+44 (0)7764 635379

Horse, frog, or…?

4,5 4,1 5,1 4,57,5 7,9 7,9

20,8

5,80,5 1,5 0 1,7

0 0,3 0,6

-0,6

15,4

InflationUnemployment

Are we happy?

5.0 5.6 5.1 6.2

8.5

20.2 21.2

Misery Index

Sources: Haver Analytics/The Economist March 2016

8.27.5

Changing needs…

142%

236%

311%

4+11%

60

45

32

1980 1990 2013

Cooking timeHousehold composition

Source: Kantar Worldpanel

Chilled Ready Meals £1.5bn% change v last year

16

8

7

6

-11

-11

Premium

Standard

Branded

Total

Healthy

ValueSource: Kantar Worldpanel 52 we 31/1/16

1.383 754

501 Fresh

Frozen

Canned

Your context: Total Seafood £2.6bn; +0.2%

Source: Kantar Worldpanel 52 we 31 Jan 2016

£m

+3%

-7%

=

Source: Kantar Worldpanel 52 we 31/1/16

Lower trip volume offset by increased price

Shellfish: lower trip volume offset by higher £

There may be trouble ahead…

85

89

91

92

99

108

118

Fish/Seafood

Bacon

Lamb

Beef

Pork

Turkey

Chicken

% under 25s consumption indexed on all foodsSource: Kantar Worldpanel 52 we Jan 2016

The growth of modern retailing and economic development are highly correlated

GD

P P

er C

apit

a, U

S $

Modern Format Retailing

India Indonesia

Malaysia

ThailandPhilippines

Korea

Argentina

Taiwan

Singapore

U.K.Germany

France

Brazil

33% 66% 100%

China

Sources: CIA, Nielsen

Private Label evolution: brand architecture

Basic

Regular

PremiumBetterfor you

Better for the planet

Health &Wellness

Value for money

Responsibleconsumption

Retailer issues• Profit and shareholder returns

• Low/no inflation

• Growing competition from discounters, on-line

• Changing shopping habits:

– convenience, top-up, more frequent

• Declining shopper loyalty

• Corruption, abuse of power, perceptions

Retailer responses

• Increased space for private label

• SKU reduction

– e.g. Tesco Project Reset removes 20-30%

– Share increased in only 20% of categories

• Increased transparency

• Reduce number of ways of taking money from suppliers

• Groceries Code compliance

The way forward

• Increased use of data

• Supply chain

• RMS, CPS, loyalty cards, qual and quant

• Insight led

• Category Management led

Category management

• Right range

• Right store

• Right price

• Right promotion

• Right new product development

Category vision

• Penetration

• Frequency

• Weight of purchase

People will pay more for what they want…

• 5% more for health

• 19% more to save time

– Convenient/ready meals

• 25% more for taste

• 87% more when it’s a special meal

4 megatrends

Health/Well-Being

Ethical

Convenience/Practicality

IndulgencePleasure

The consumer is not necessarily the shopper

NPD strategy options - Ansoff matrix

E x is t in g N e w

Existing

New

P r o d u c ts

Markets

M a r k e t D e v e lo p m e n t

M a r k e t P e n e t r a t io n

P r o d u c t D e v e lo p m e n t

D iv e r s if ic a t io n

Export, SnacksNew category to brand

Added ingredientsPackagingSmaller sizes

???Pet food

Beyond 2 in 1…

Top 20 innovations of the 20th Century1. Frozen food

2. Pasteurised milk

3. Sanitary products

4. Microwaveable food

5. Tea bags

6. Instant coffee

7. Ring pull cans

8. Sliced bread

9. Plastic bottles

10.Disposable nappies

11.Powdered baby milk

12.Chilled food

13.Ready meals

14.Vacuum-packed food

15.Disposable razors

16.Gravy granules

17.Artificial sweeteners

18.Tetra Pak cartons

19.Pre-packed meat and fish

20.Screw-top wine bottlesSource: The Grocer/HI Europe online survey December 2004

How to turn 17.5p/100g into 35.5p/100g

Source: http://www.mysupermarket.co.uk/Heinz_-_Tomato_Ketchup_In_Tesco.html 15/10/11

80% of CEO’s believe their brand provides a superior customer experience

8% of their customers agree

Source: Bain & Company

Closing thought: Profits, people, planet...

“It is not your duty to finish the work, but neither are you free to neglect it.”

Source: Rabbi Tarfon, Pirke Avot, The Talmud