Transcript 360 Conference - Scion Advisors

Upcoming Webinars
• Fall 2010
–Retail Landscape, circa 2015
–New Product Development
–The New Demand Chain
Page 1
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Today’s Presenters
Danny Brager is Vice
President, Group Client
Director, The Nielsen Company
Jim Greco is Senior Vice
President, North America
Professional Services, The
Nielsen Company
Page 2
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Today’s Consumers and Generation Next
Myths and Realities
June 25, 2010
Confidential & Proprietary • Copyright © 2010 The Nielsen Company
Today’s Agenda
•
Impact of economy on Beverage Alcohol
–
–
Bev Al Report Card – what’s hot and not
Bev Al Consumer Myths and Realities
–
•
What consumers are “thinking and doing”
Uncovering Generational Opportunities
–
Here Come the Millennials (aka Generation Y, Generation Next,
Net Generation or Echo Boomers)
Page 4
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
The Economy Is a Bit Like This –
Can’t Make Up its Mind
Page 5
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
The News Is Inconsistent – Not All Good and
Not All Bad
Unemployment
DOW Rollercoaster
-7.8 m
9.7%
Underutilized
Jobs lost since
recession began
16.6%
Foreclosures (May)
-3% vs Apr
Total: +11% vs 6
>11K (Apr);
<10K (May),
>10K (Jun)
New:
mos ago
Building Permits
+10% vs YAG
Retail Sales (May)
-1.2% vs Apr
+6.9% vs YAG
Page 6
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
The Labor Picture Is Improving,
But Recovery Will Take Years
431K
411,000 temporary
workers for Census 2010
400,000
290K
300,000
Monthly Job Gains/Losses
200,000
208K
64K
100,000 41,000
35K
0
-26K
-100,000
-200,000
-144K
-109K
-128K
-137K-161K
-160K
-175K
-211K-225K-224K
-300,000
-321K
-400,000
-347K
-380K
-344K
-500,000
-504K
-600,000
-700,000
-800,000
-582K
-597K
-681K
-726K
-753K
-779K
Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May07
08
08
08
08
08
08
08
08
08
08
08
08
09
09
09
09
09
09
09
09
09
09
09
09
10
10
10
10
10
Source: Seasonally Adjusted U.S. Total Non-Farm Employment, U.S. Government
Page 7
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Momentous Events – Unpredictable or
Uncontrollable – Are Impacting the Consumer
Page 8
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Confidence Is Better, But Still Weak by
Historical Levels
120
2001
2002
2003
2004
2005
2006
2007
2008
2009 2010
110
100
90
80
70
60
50
40
30
20
Source: The Conference Board - Nine census regions, 5,000 US households; 1985 = 100
Page 9
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Consumers Still Saving, But Moving Toward
Some Discretionary Spending
Once you have covered your essential living expenses, what do you do with
your spare cash? I spend it on…
40%
U.S. Avg - 1Q09
U.S. Avg - 4Q09
U.S. Avg - 1Q10
35%
30%
25%
20%
15%
10%
5%
0%
Savings
Paying
Debts
No spare
cash
Home
Improv
Out of
Home Ent.
Vacations
Source: Nielsen Global Online Consumer Confidence and Opinion Survey, 1Q10
Apparel
Retirement Tech Prods Investing
Funds
Page 10
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Consumers Are Rephrasing Value
“I want what I
want, but at the
best price.”
“I’ll trade down
even if it means
sacrificing what I
really want.”
Page 11
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Pre-Recession, Premiumization Was the
Reigning Dynamic
22%
15%
14%
7%
3%
1%
-1%
<$6
>$20
Value
Ultra
Below
Imports
Premium Premium
Crafts
Annual 2007
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus/Dollars
Page 12
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Through the Recession, Trading Down
Dominated with the Exception of Crafts
22%
15%
13%
14%
9%
8%
7%
4%
3%
1%
-1%
-2%
-4%
-6%
<$6
>$20
Value
Annual 2007
Source: Nielsen Total U.S.
Food/Drug/Conv/Liquor Plus/Dollars
Ultra
Below
Imports
Premium Premium
Crafts
52 weeks to 10/17/2009
Page 13
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Now We See a “Trading Up” Comeback –
Or Do We?
22%
15%
9%
12%
10%
5%
3%
13%
14%
8%
4%
1%
-1% -1%
7%
5%
-2%
1%
-1%
-4%
-6%
<$6
>$20
Annual 2007
Value
Ultra
Below
Imports
Premium Premium
52 weeks to 10/17/2009
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus/Dollars
Crafts
26 weeks to 5/29/2010
Page 14
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Pricing Is a Factor in the Current Wine and
Spirits Trading Up
Spirits: Ultra Premiums
Wines >$20
12
20
$1.20
$2.50
$1.00
10
$2.00
15
$0.80
8
$1.50
$0.60
6
10
$0.40
4
$0.20
2
$0.00
$1.00
5
$0.50
0
$0.00
($0.20)
0
($0.40)
-5
($0.50)
(2)
($0.60)
-10
(4)
($1.00)
($0.80)
$ Volume % Chg vs YA
Source: Nielsen, Total US Food, 13 weeks rolling ending 5/29/10
Q2 ' 1
0
Q1 ' 1
0
Q4 ' 0
9
Q3 ' 0
9
Q2 ' 0
9
Q1 ' 0
9
($1.50)
Q4 ' 0
8
-15
Q3 ' 0
8
Q2
' 10
Q1
' 10
Q4
' 09
Q3
' 09
Q2
' 09
Q1
' 09
($1.00)
Q3
' 08
(6)
Avg Eq 750ml Price Chg vs YA
Page 15
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
‘Value vs. Volume’ Gaps Have Shrunk
From 2007 Levels
Value % Change vs Year Ago
Annual Lat 52
2007 weeks
Volume % Change vs Year Ago
Lat 26* Lat 13*
weeks weeks
Annual
2007
Lat 52 Lat 26*
weeks weeks
Lat 13*
weeks
Beer
+3.2% +0.7% +0.4% +0.4%
+0.5%
-1.3% -1.4%
-1.5%
Wine
+6.1% +3.1% +4.4% +4.9%
+2.9% +1.9% +3.1%
+3.4%
Spirits
+4.4% +0.3% +0.7% +1.8%
+2.2% +0.6% +0.9%
+1.9%
Source: Nielsen Tl U.S. Food/Drug/Conv/Liquor Plus through 5/29/2010 Lat 24 and Lat 12 for Beer/FMB’s only
Page 16
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Taking Price in Wine and Spirits Is Difficult;
Beer Is in a Better Place, for some Segments
Avg. Price Across 100 Key Items Per Category
108
107
106
105
104
103
102
101
Table Wine
Spirits
Source: Nielsen Total U.S. Food, Drug, Liquor (+ Conv for Beer)
/10
05
/01
/10
03
/06
/10
01
/09
/09
11
/14
/09
09
/19
/09
07
/25
/09
05
/30
/09
04
/04
/09
02
/07
/08
12
/13
/08
10
/18
/08
08
/23
/08
06
/28
/08
/03
05
/ 08
3/8
1/1
2/ 0
8
100
Beer
Page 17
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Summary
• Economic uncertainty still prevails; recovery likely modest
– Impact depends upon your products’ geographic development and
consumer demographics
• Consumers have re-phrased “value”
– Frantic trading down replaced by “I want what I want, on my terms”
• Trading up activity in Wine and Spirits at least partially tied
to decrease in pricing
Page 18
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Bev Al Report Card – What’s Hot and Not
Page 19
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Beer – Price Tiers/Origin
Crafts continue to lead the way, while mainstream Premiums
decline. Imports are now back to “flat”, and the only segment
down on price.
Value % Chg
Volume % Chg
Major SubCategory
Lat 52
Lat 12
Lat 52
Lat 12
100%
Ttl Beer
+0.7%
+0.4%
-1.3%
-1.5%
84.2
Domestic
+1.5
+0.6
-1.1
-1.8
49.1
--Premium
-1.1
-1.0
-3.2
-2.6
20.8
--Below Premium
+5.6
+1.8
+1.9
-1.6
6.1
--Craft/Microbrew
+13.4
+13.5
+10.6
+11.7
5.9
--Above Premium
-2.0
-1.9
-3.5
-1.9
15.8
Imported
-3.2
-0.8
-3.1
+0.1
53.8
Light
+1.4
+0.5
-0.6
-1.3
Lat 52
$ Share
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 20
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Beer – Country of Origin
The Import comeback is led by Mexican beer, and reduced Holland
losses albeit with reduced prices, coupled with Canada/Belgium gains.
Value % Chg
Volume % Chg
Lat 52
$ Share
Country of
Origin
Lat 52
Lat 12
Lat 52
Lat 12
15.8%
Ttl Imported
-3.2%
-0.8%
-3.1%
+0.1%
7.7
Mexican
-1.7
+0.7
-0.5
+2.0
3.6
Holland
-8.5
-5.0
-8.8
-3.6
1.1
Canadian
+1.2
+4.6
-0.7
+2.5
0.9
Germany
-5.9
-5.3
-7.7
-4.6
0.6
Belgium
+10.0
+10.8
+6.8
+9.4
0.6
Ireland
-1.6
-2.4
-3.4
-2.8
0.5
England
-0.2
-0.6
-0.3
-0.7
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 21
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Beer – Package Size
4 packs, as well as large 30 packs lead growth, with Kegs now bouncing
back. Prices are uniformly higher than year ago.
Value % Chg
Volume % Chg
Country of
Origin
Lat 52
Lat 12
Lat 52
Lat 12
100%
Ttl Beer
+0.7%
+0.4%
-1.3%
-1.5%
30.9
20.3
13.0
11.4
9.9
12 Pack
6 Pack
18 Pack
Singles
24 Pack
-3.0
-0.7
+3.3
+2.6
+0.9
-3.6
+0.9
+2.7
+2.8
-2.1
-5.6
-2.1
+1.1
-0.1
-1.5
-5.7
-0.6
+1.2
+0.2
-4.7
9.5
30 Pack
+7.5
+5.4
+4.4
+2.4
2.2
20 Pack
-8.1
-13.5
-10.0
-14.1
1.4
4 Pack
+10.6
+8.8
+10.0
+7.8
0.5
0.4
36 Pack
+0.8
-5.3
-0.5
+10.6
-3.0
-6.7
-3.5
+2.0
Lat 52
$ Share
Kegs
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 22
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Table Wine – Price Tiers
Trading down was a 2008/09 event. Now, price points $9-$15
and >$20 are in the best growth position, but have been
accompanied by price decreases.
Lat 52
$ Share
Price Segment
100%
Ttl Table Wine
Value % Chg
Volume % Chg
Lat 52
Lat 13
Lat 52
Lat 13
+3.1%
+4.6%
+2.0%
+3.5%
8.4
0-$2.99
+2.0
+0.5
-2.8
-2.1
25.7
$3-$5.99
+6.5
+5.4
+4.6
+4.7
24.4
$6-$8.99
-2.4
-1.3
-0.9
+1.4
18.9
$9-$11.99
+6.6
+8.4
+8.7
+11.4
11.2
$12-$14.99
+4.0
+8.3
+6.0
+11.7
6.4
$15-$19.99
+0.9
+4.8
+2.3
+4.4
4.8
>$20
+2.7
+13.6
+1.9
+11.8
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010; Pricing based
upon 750 ml Equivalent
Page 23
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Table Wine – Package
Growth is led by 750 ml (but with average price attrition), alternative
packaging such as 3 l Box and Tetra, and the 187 ml size.
Value % Chg
Volume % Chg
Lat 52
$ Share
Package Size/
Type Segment
Lat 52
Lat 13
Lat 52
Lat 13
100%
Ttl Table Wine
+3.1%
+4.6%
+2.0%
+3.5%
66.9
750 ml
+3.4
+5.5
+5.2
+6.7
21.5
1.5 l
+1.4
+2.2
+0.7
+2.7
4.3
5l
+5.0
+3.7
-0.4
+1.7
1.9
187 ml
+6.7
+8.2
+5.9
+8.7
1.6
3 l Prem Box
+19.6
+17.8
+12.9
+13.9
1.4
4l
-4.9
-9.6
-12.1
-15.4
1.3
3 l Glass
-3.3
-2.8
-8.0
-5.9
0.4
Tetra
+24.1
+28.3
+26.6
+31.3
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Price Trend based upon Tl U.S. Food
Page 24
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Table Wine – Country of Origin
Domestic growth is running well ahead of Imports, with all major wine-growing
states contributing.
Lat 52
$ Share
100%
Origin
Ttl Table Wine
Value % Chg
Volume % Chg
Lat 52
Lat 13
Lat 52
Lat 13
+3.1%
+4.6%
+2.0%
+3.5%
72.2
Domestic
+4.7
+6.2
+2.8
+4.3
65.9
--California
+4.7
+6.2
+2.7
+4.2
4.0
--Washington
+3.8
+4.6
+4.7
+6.1
0.7
--Oregon
+4.6
+17.9
+11.5
+24.1
0.3
--Texas
+3.1
+4.2
+1.2
+2.4
27.8
Imported
-0.9
+0.5
-0.6
+0.9
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 25
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Table Wine – Imports
Softness still from AU and FR, while clear growth leaders remain AR and NZ,
now ranked #5 and #6, but with opposite pricing trends.
Value % Chg
Volume % Chg
Lat 52
$ Share
Country of
Origin
Lat 52
Lat 13
Lat 52
Lat 13
27.8%
Ttl Imported
-0.9%
+0.5%
-0.6%
+0.9%
8.8
- Italy
-2.7
+0.8
-2.6
+1.2
8.2
- Australia
-6.8
-6.8
-4.7
-5.0
2.5
2.2
1.9
- France
- Chile
- Argentina
-6.6
+4.1
+35.0
-5.8
+6.6
+24.9
-7.1
+5.0
+27.8
-7.3
+10.1
+15.2
1.3
- New Zealand
+16.3
+19.0
+21.4
+27.0
1.2
1.1
- Spain
- Germany
+1.9
+3.0
-0.2
+4.8
+2.9
+2.0
+1.0
+5.6
0.3
- S. Africa
-6.1
-11.0
-5.8
-2.2
0.2
- Portugal
+3.4
+12.6
+4.1
+13.2
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 26
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Table Wine – Top 10 Varietals
Pinot Noir and Riesling lead the way, followed closely by Cab Sauv and Sauv
Blanc. Syrah/Shiraz continues to struggle.
Lat 52
$ Share
100%
Varietal
Ttl Table Wine
Value % Chg
Volume % Chg
Lat 52
Lat 13
Lat 52
Lat 13
+3.1%
+4.6%
+2.0%
+3.5%
22.0
Chardonnay
+2.0
+2.6
+3.2
+3.6
14.7
Cab Sauv
+5.2
+7.6
+6.4
+8.3
10.2
8.0
5.7
Merlot
P. Grigio/Gris
P. Noir
-2.7
+2.9
+8.4
-2.2
+4.1
+12.2
-0.4
+4.4
+11.8
-0.2
+6.0
+15.6
4.8
White Zin
-0.7
-1.8
-1.8
-1.7
4.3
Sauv Blanc
+7.3
+7.9
+7.2
+7.5
3.2
Syrah/Shiraz
-8.1
-8.6
-7.0
-7.1
2.5
Riesling
+8.9
+10.9
+11.0
+14.7
2.3
Zinfandel
+4.7
+6.9
+6.2
+7.2
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 27
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Several Lesser Known Varietals are on Fire – a
Reflection of the Adventurous Wine Consumer
Lat 52
$ Share
Varietal
Value % Chg
Volume % Chg
Lat 52
Lat 13
Lat 52
Lat 13
100%
Ttl Table Wine
+3.1%
+4.6%
+2.0%
+3.5%
1.3
Moscato/Muscat
+81.8
+110.0
+84.4
+117.4
1.2
Malbec
+54.6
+44.3
+62.7
+52.3
0.4
Petite Sirah
+16.7
+11.6
+20.5
+15.0
0.2
Tempranillo
+22.6
+22.7
+26.7
+27.3
0.2
Carmenere
+21.1
+19.9
+16.6
+13.6
0.2
Grenache
+26.4
+16.5
+28.6
+17.5
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 28
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Spirits - Sub-category
Vodka continues to grow, along with improved Whiskey, Tequila,
Cognac growth. Average price for some rising (Cognac, Whiskey),
and others falling (Vodka, Tequila)
Lat 52
$ Share
100%
29.1
26.1
8.6
8.3
6.1
1.9
1.1
12.3
11.4
6.8
6.5
4.3
2.7
Sub-category
Value % Chg
Lat 52
Lat 13
Volume % Chg
Lat 52 Lat 13
Ttl Spirits
+0.3%
+1.8%
+0.6%
+1.9%
Vodka
Whiskey
+2.7
-0.2
+2.8
+1.4
+4.1
-1.8
+4.2
-0.7
---Bourbon
---Scotch
---Canadian
---Blended
---Irish
+0.8
-2.8
-2.1
+5.6
+13.5
+1.5
+1.2
-1.8
+2.2
+14.2
-2.2
-5.4
-3.1
+7.0
+13.9
+0.1
-4.0
-2.6
+4.4
+14.8
Rum
Cordials/Schnapps
Tequila
Unflav Brandy/Cog.
Gin
Prep/RTD Cocktails
+0.3
-2.7
-0.2
+0.6
-2.7
-1.9
+1.0
-1.1
+3.4
+7.2
-2.7
+1.2
+0.6
-2.6
+2.5
-1.2
-2.7
-2.9
+1.5
+/-0
+6.7
+2.8
-2.6
+2.5
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010
Page 29
Price
Trend
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Vodka Flavors Gone Wild! Today’s Rising
Flavor Star could be Tomorrow’s Fading Glory
Lat 52 weeks
Flavored:
Unflavored:
Rank
Sales % Change
$ Share Dollars Volume
84.8% +10.2% +12.3%
15.2% +1.5% +3.1%
Rising Star
Fading Glory
1
Sweet Tea*
Orange*
2
Mango
Vanilla*
3
Pomegranate*
Citrus*
4
Cherry*
Apple
5
Pineapple
Peach
* Top 10 ranked flavor
Source: NielsenSource:
Total U.S. Food/Drug/Conv/Liquor
Plus;Food/Drug//Liquor
thru 05-29-2010
Nielsen Total U.S.
Rising Starts/Fading Glory based upon data to 02-06-2010
Plus; 52 weeks thru 03-06-2010 - Dollars
Page 30
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Spirits - Price Tiers
Trading down NOT the descriptive word any longer; premium and especially
ultra-premium leading the way but with reduced pricing.
Lat 52
$ Share
Price Tier
100%
Ttl Spirits
22.0
Value % Chg
Volume % Chg
Lat 52
Lat 13
Lat 52
Lat 13
+0.3%
+1.8%
+0.6%
+1.9%
Value
+0.1
-0.4
-0.5
+/-0
32.6
Mid Price
+/-0
+0.5
+1.1
+2.1
33.8
Premium
+0.1
+1.8
+1.3
+3.5
11.6
Ultra Premium
+1.8
+9.8
+2.4
+10.8
Price
Trend
Spirit Price Tiers Legend (equiv 750 ml)
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010; Pricing based
upon 750 ml Equivalent
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Ultra Premiums Generally Leading the Way,
with the Exception of Vodkas and Tequilas
TTL US Sales Volume % Chg – Lat 26 weeks vs Year Ago
Value
Mid
Premium
Ultra
Vodka
Scotch
Bourbon
Canadian Whisky
Rum
Cordials/Schnapps
Unflavored Brandy/Cognac
Tequila
Gin
Bottom box growth
Top box growth
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 05-29-2010; Pricing based
upon 750 ml Equivalent
Page 32
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Copyright © 2010 The Nielsen Company
Beverage Alcohol Consumer Survey
Objectives
Mechanics
• Examined a variety of
dynamics to gain insight into
today’s beverage alcohol
consumer/shopper
• April 20 – May 10, 2010
• Total U.S.
• # Bev Al responses: 7,500
– Consumer perceptions/attitudes
across multiple dimensions
– Trading down/trading up activity;
current/planned
– On- and Off-Premise channel
preferences; current/planned
– Beer :
– Wine :
– Spirits:
5,600
5,200
4,200
• Reporting levels:
–
–
–
–
–
Age group
Income level
Gender
Ethnicity
Major states: CA, NY, FL, TX, IL
Page 33
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Copyright © 2010 The Nielsen Company
#1. Myth or Reality?
Bev Al consumers are saying
that they are better off financially
than they were a year ago.
Page 34
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#1. Myth or Reality?
Bev Al consumers are saying
that they are better off financially
than they were a year ago.
Myth
Page 35
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
In the Consumer Mind, it’s Still Not Pretty,
But it’s Better Than it Was
Compared to a year ago, would you say that overall your household is?
47
47
40
2010 Net: Better
minus worse =
-18
36
18
13
Better off financially
Worse off financially
2009
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Same
2010
Page 36
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#2. Myth or Reality?
The majority of Bev Al
consumers traded down as a
result of the economic
downturn.
Page 37
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#2. Myth or Reality?
The majority of Bev Al
consumers traded down as a
result of the economic
downturn.
Myth
Page 38
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Majority Claim They Stayed the Course
How have your purchases changed in regards to price compared to before the
start of the economic downturn?
83
76
81
Trade Down Segment
Stand Pat Segment
1
1
16
23
18
1
usually purchase more
expensive products
not changed the products
I purchase
Beer
Wine
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
usually purchase less
expensive products
Spirits
Page 39
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Many “Stand-Pat” Consumers Experimented
But Returned; Some Adjusted Their Purchases
How have your purchases changed in regards to price compared to before
the start of the economic downturn?
83
81
• Tried less Expensive
but Returned
–20%*
• Buy Less Frequently
76
–25%*
Stand Pat Segment
not changed the products I purchase
Beer
Wine
Spirits
• Buy on Deal
–13%*
* Average across 3 categories
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Page 40
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#3. Myth or Reality?
In trading down, Bev Al
consumers say they ended up
with lower quality in exchange
for a lower price.
Myth
Page 41
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Trade Down Consumers Are Generally
Satisfied With Quality
Which best describes your experiences with less expensive products?
79
67
63
37
33
21
Beer
Wine
Spirits
Generally finding good quality products at lower prices
Generally finding quality is not as good, but willing to sacrifice to save
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Page 42
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Copyright © 2010 The Nielsen Company
Beer and Wine Consumers Find Good Quality at
Lower Prices; Not so Much for Spirit Consumers
Statement: “Category” that costs more is typically of better quality.
(Chart represents “completely or somewhat agree” minus “somewhat or completely disagree”)
32
3
Beer
-1
Wine
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Spirits
Page 43
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#4. Myth or Reality?
As the economy improves, the
Bev Al “trade down” segment
will continue to buy less
expensive products.
Page 44
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#4. Myth or Reality?
As the economy improves, the
Bev Al “trade down” segment
will continue to buy less
expensive products.
Reality
Page 45
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
“Trade Downers” Are Most Likely to Continue
That Behavior
As the economy improves, what best describes what you will do?
75
70
34
30
Beer
66
25
Wine
Spirits
I will continue to buy less expensive products
I will begin to buy more expensive products again
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Page 46
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#5. Myth or Reality?
Purchases are now more
planned than before.
Reality
Page 47
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
It’s Even More Important to Reach the Spirits
Consumer Before They Enter the Store
Statement: Compared to before the start of the economic downturn, my
purchases are more planned, less on impulse.
(Chart represents “completely or somewhat agree” minus “somewhat or completely disagree”)
16
7
2
Beer
Wine
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Spirits
Page 48
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#6. Myth or Reality?
Big, well-known brands are
favored by Bev Al consumers.
Depends
Page 49
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
The Beer and Spirits “Brand” Story Is Powerful;
Wine Consumers Prefer the Adventure
The “BRAND” Scorecard
Net: % Agree minus Disagree
Statement:
Beer
Wine
Spirits
I prefer to buy well-known brands
+34
+1
+46
I like brands with strong traditions
+19
+8
+33
I tend to stick with my favorite brands
+62
+39
+68
I like to explore new/different products
+5
+42
+12
I like to buy brands that are smaller or less
well-known
-21
+7
-28
-5
+11
-23
I like to buy locally made or produced
products
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Page 50
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
#7. Myth or Reality?
As the economy improves, ALL
trade channels will benefit
Myth
Page 51
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Some Channels Likely to Benefit from Improving
Economy; Some Will Be More Challenged
21
20
Average across Beer, Wine, and Spirits
18
-9
-11
15
-9
13
-9
-14
Wine only
Tasting
Room
OnLine
12
-11
10
10
8
7
-8
-13
-11
-19
Specialty
Grocery
Club
Liquor
stores
Will buy here more often
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Mass
Traditional
Grocery
C-Store
Drug
Limited
Assortment
Will buy here less often
Page 52
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
8. Myth or Reality?
Bev Al consumers say they are
going “out” more now compared
to before the start of the
economic downturn.
Myth
Page 53
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Copyright © 2010 The Nielsen Company
Majority of Consumers Say They Frequent
On-Premise Less Often
Thinking about your going out behavior now, compared to before the start of
the economic downturn, which describes how often you go out?
31
44
59%
59%
38
47%
28
15
2
4
9
2
Fine Dining
Casual Dining
Bar or Nightclub
Have been going out much less often
Have been going out somewhat less often
Have been going out more often
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Page 54
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Q1 2010 Same Store Sales Are Much Better
Than Last Year, But Are Against Easier Comps
Cheesecake Fac
Olive Garden
Texas Roadhouse
Q2-3, 2009
Current
Q1, 2010
Year Ago 2 Yr Ago
Ruby Tuesday
On the Border
J Alexanders
Carrabas
Grand Lux
Chillis
Longhorn
Steakhouse
Baham a Breeze
Mim is Café
Landrys
Applebees
Mexican Rest
Maggianos
Fam ous Dave's
O'Charleys
Red Lobster
CPK
Bonefish
PF Changs
Kona Grill
Dave & Busters
Outback
Mac Grill
Red Robin
Benihana
Current
-8.7% -4.2% +1.3%
McCorm . &
Schm icks
Cap Grille
-28
-26
-24
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
Year Ago 2 Yr Ago
-1.5% -7.5%
-1.2%
Ruth Chris
Bahama Breeze
Ruby Tuesday
Cap Grille
Landrys
Red Robin
Kona Grill
Applebees
CPK
PF Changs
Outback
Famous Dave's
On the Border
Chillis
Benihana
O'Charleys
Dave & Busters
Mimis Café
McCorm. &
Schmicks
Mexican Rest
Flem ings
Ruth Chris
Mortons
-30
Flemings
BJ's
Grand Lux
Mortons
Bonefish
Cheesecake Fac
Maggianos
Longhorn
Steakhouse
J Alexanders
Olive Garden
Carrabas
Red Lobster
Texas Roadhouse
Buff Wild Wings
Buff
Wild Wings
BJ's
-2
Source: Company Reports – Nation’s Restaurant News
0
2 -14 4
-12
-10
-8
-6
-4
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-2
0
2
4
6
8
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Overall Dining Is Close to Flat Now, But Well
Down vs. Two Years Ago
Dining Operators Same Store Sales Comps
2007
2008
Q2/3, 2009
Q4, 2009
Q1, 2010
0.8% 0.4%
0.1%
-1.5%
-5.0%
-8.2%
-7.3%
-8.7%
-14.4%
-17.1%
Total Dining
Source: Company Reports – Nation’s Restaurant News
Fine Dining
Page 56
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Copyright © 2010 The Nielsen Company
#9. Myth or Reality?
Bev Al consumers say they are
ready to go out more.
Reality
Page 57
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Copyright © 2010 The Nielsen Company
At the Same Time, Consumers Are Ready to
“Go Out More” to Eat
As the economy begins to improve, how will you change your going out habits?
37
Net: +28
27
Net: +15
16
Net: +4
12
12
9
Fine Dining
Casual Dining
Will go out more often
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
Bar or Nightclub
Will go out less often
Page 58
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
It Could Take at Least 4–5+ Years Before
Restaurant Sales Return to 2007 Levels
Illustration of Same Store Revenues
Assuming 2010 is +1%, and Following Years are +5%
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2007
2008
2009
2010
Total Dining
Source: Nielsen projections
2011
2012
2013
2014
Fine Dining
Page 59
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Copyright © 2010 The Nielsen Company
#10. Myth or Reality?
There are very little differences
by age group.
Myth
Page 60
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Copyright © 2010 The Nielsen Company
The Generational Divide Is Clear
Compared to a year ago, would you say that overall your household is?
(Chart represents “better off financially” minus “worse off financially”)
5
-2
-16
-18
Total
21-27
28-34
35-44
Source: Nielsen Beverage Alcohol Consumer Survey (May 2010)
-24
-24
45-54
55-64
Page 61
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65+
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Copyright © 2010 The Nielsen Company
Summary
• Diagnose the “myths vs. realities” for your business
– Do they work in your favor? If so, capitalize upon them.
– Do they work against you? If big, what are you doing about them?
• A minority of consumers claim to have traded down and their behavior
will persist going forward.
• On-Premise is improving, and needs your help, but has a long way to
go. Off-Premise remains a healthier environment.
• Generational divide – both by nature and due to the economy – is
significant; Millennials are in a very different place than Boomers
– How does that impact you? How are you addressing it?
Page 62
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The Millennial Mindset and Behavior
Is Quite Distinct
Compared to the general population, Millennials are
• More likely to trade back up as the economy improves
• More likely to equate product cost with quality
• More likely to explore and be open to new/different
products – both today, and as the economy improves
• More likely to be purchasing by “plan” than on “impulse”
compared to before the economic downturn
Page 63
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Copyright © 2010 The Nielsen Company
Uncovering Generational
Opportunities
Page 64
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Lots of People Are Trying To Understand
Millennials!
Amazon.com Search Results
(Books)
Baby
Boomers
Generation
X
Millennials
1347
954
1957
Page 65
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Copyright © 2010 The Nielsen Company
Our Aim Is to Provide a 360 View of
Millennial Consumers
What People Watch
What People Buy
Page 66
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Their Sheer Size Will Make Millennials an
Influential Generation
• Second largest population
cohort and still growing
– Legal Drinking Age (LDA)
Millennials already larger
than all of Gen-X
– ~55MM Adults
• How much attention
should they receive
relative to other
generations?
Source: U.S. Census Bureau
Greatest
Generation
Under 21
Baby
Boomers
Gen X
Millennials
(LDA 2133)
Page 67
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Copyright © 2010 The Nielsen Company
Established Industry Knowledge Suggests
that Beer Is Millennials’ Beverage of Choice
18%
36%
20%
13%
35%
9%
21%
32%
14%
Greatest
Generation
35%
41%
22%
23%
Baby Boomers
20%
Generation X
19%
27%
30%
35%
% Adults
% BevAl
Volume
% Beer
Volume
Source: Simmons/MRI
18%
% Wine
Volume
Millenials
31%
% Spirits
Volume
Page 68
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Copyright © 2010 The Nielsen Company
However, Millennials Are Redefining the
Bev–Al Landscape
Bev Al Volume Distribution (Drinks Equivalency, Off-premise)
Generation X - 1999
Generation X - 2009
15%
Beer
Wine
13%
10 yrs later
30%
49%
72%
Spirits
21%
Millennials - 2009
38%
42%
20%
Source: Homescan (2009)
10 yrs later
?
Page 69
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Millennials Will Make up 40%+ of the Total
21+ Population in the Next 10 Years
Millennials* as a % of Total Drinking Age Population (21+)
9%
17%
34%
33%
32%
2015
2020
2025
25%
2010
Post-Millennials
Millennials
Source: U.S. Census Bureau Projections
* Full Millennials Cohort
Page 70
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Copyright © 2010 The Nielsen Company
To Understand the Impact of Millennials on
Bev Al, We Simulated Two Scenarios
Scenario #1:
Scenario #2:
• Millennial preferences
between segments do not
change over the next 10
years
• Millennial preferences
between segments shift
in a similar way as
observed with Gen-X
over the next 10 years
– Important to note that
Hispanic population
projections are included
Page 71
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Copyright © 2010 The Nielsen Company
Results Were Illuminating
Bev Al Share (Share of Throat)
35%
31%
36%
Spirits
24%
24%
41%
45%
38%
Current
Scenario #1
Scenario #2
26%
Wine
Beer
Source: Theoretical share simulation based on Homescan (2009)
Page 72
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Copyright © 2010 The Nielsen Company
Results Were Illuminating
Bev Al Share (Share of Throat)
35%
31%
36%
Spirits
24%
24%
41%
45%
38%
Current
Scenario #1
Scenario #2
26%
Wine
Beer
Source: Theoretical share simulation based on Homescan (2009)
Page 73
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Copyright © 2010 The Nielsen Company
Results Were Illuminating
Bev Al Share (Share of Throat)
35%
31%
36%
Spirits
24%
24%
41%
45%
38%
Current
Scenario #1
Scenario #2
26%
Wine
Beer
Source: Theoretical share simulation based on Homescan (2009)
Page 74
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
What Are the Implications?
• Millennials have the potential to dramatically alter the Bev
Al landscape.
• The future is not yet set in stone.
• There are four big trends that matter – they represent
‘headwinds’ and ‘tailwinds’ for your categories/brands.
• “Future-Proof” your portfolios
Page 75
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“Future-Proofing” Millennials
• Multi-Cultural (especially Hispanics)
• Lower Income/Affluence; i.e., Value, Value, Value
• Tapping into Millennial Values: Be the “Social Accessory”
• Online/Mobile Engagement
Page 76
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Copyright © 2010 The Nielsen Company
Future-Proofing Millennials
Mastering Multi-Cultural (especially Hispanics)
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
21+ Is Majority Multi-Cultural by 2036
Distribution of the U.S. Population (21+)
70%
4%
13%
60%
65%
5%
14%
16%
2000
2010
2020
African American
46%
50%
9%
8%
15%
15%
23%
27%
30%
2030
2040
2050
14%
13%
Source: U.S. Census Bureau Projections
7%
6%
14%
20%
Hispanic
56%
Asian
White Non Hispanic
Page 78
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Copyright © 2010 The Nielsen Company
Is Your Portfolio Positioned to be Relevant?
$ Sales per MM ACV (Index)
Hispanic vs. Non-Hispanic Stores
Wine*
44
Spirits
Tequila = 228
Rum = 100
Vodka = 81
Whiskey = 74
Gin = 81
97
Beer
147
Source: Nielsen RMS
Wine (Domestic) = 36
Wine (Spain) = 171
Wine (Chile) = 118
Wine (France) = 67
Wine (Italy) = 50
* Weighted Average of Top 6 Hispanic Local Markets
Beer (Domestic) = 120
Beer (Import) = 224
Beer (Craft) = 54
Beer (Mexican) = 352
Beer (European) = 136
Page 79
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Copyright © 2010 The Nielsen Company
Future-Proofing Millennials
Online/Mobile Engagement
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
What Makes Your Generation Unique?
A Self-Assessment
Millennials
Generation X
Baby Boomers
Technology (24%)
Technology (12%)
Work Ethic (17%)
Music/Pop Culture
(11%)
Work Ethic (11%)
Respectful (14%)
Liberal/Tolerant (7%)
Conservative/
Traditional (7%)
Values/Morals (8%)
Smarter (6%)
Smarter (6%)
“BabyBoomers”
(6%)
Clothes (5%)
Respectful (5%)
Smarter (5%)
Pew Research Center (2010)
Source: Pew Research Center (2010)
Page 81
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Copyright © 2010 The Nielsen Company
Millennials Are Driving the Mobile Internet
Internet Penetration (by Access Point)
74
21-34
35-44
45-54
55-64
52
34
Internet Access Freq
(1+/Day)
Source: Nielsen Online (@Plan)
Primary Access Location =
Home
Any Access from
Phone/Wireless Device
Page 82
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
And a Large Percentage of Millennials’
Internet Time Is Spent with Social Media
39%
33%
28%
18-24
25-34
35-49
Entertainment
Technology
News & Info
Source: Nielsen Online
E-mail/ Messaging
Shopping
8%
50-64
65+
Social Media
Communities & Msg Bds
Page 83
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
There Is a Meaningful Opportunity for Bev Al
Brands to Leverage Social Media Platforms
• Millennials are comfortable
receiving advice on what to
drink.
“I make my choice regardless of what
other people are drinking.”
(% Top Box Agreement)
54
46
“If I’m trying a new beer, I’ll
talk about it with my buddies.”
(22-27 year old male)
“I ask other people for
suggestions on what to drink,
but that’s really only while I’m
out.” (22-27 year old female)
Source: Nielsen Consumer Research
39
34
Millennials
(1)
Millennials
(2)
Page 84
Gen-X
Boomers
Confidential & Proprietary
Copyright © 2010 The Nielsen Company
Key (High Level) Takeaways
1. Understand the implications of the ‘headwinds’ and
‘tailwinds’ presented by these four big trends.
•
They will differ by category, segment and brand
2. Brand-building is going to be a critical piece of the puzzle.
It is difficult to envision over-investing on this dimension.
3. Accelerate your experimentation with online/mobile
marketing. It is going to redefine marketing strategy.
Page 85
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Copyright © 2010 The Nielsen Company
Thank You and Cheers !
• If you have follow-up questions or want more
information about the Bev Al survey or Millennial project,
please contact your Nielsen Professional Services Representative.
• If you are not a current Nielsen client, please contact
us by phone or email:
– Phone: 800-553-3727 email: [email protected]
• OR if you have any questions regarding the content of this
Webinar, you can also contact:
– Danny Brager - email: [email protected] Phone: 949.716.0224
– Nick Lake - email: [email protected] Phone: 770.777.4310
– Jim Greco - email: [email protected] Phone: 773.698.8710
• Note: Consumer 360 highlights and select videos are available on NielsenWire.
Select presentations are available through your Professional Services Rep.
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