Transcript Marketing innovation in the development of new nutrition

Innovation in Consumer Products
Nutrition, Health and Well-being
MIDA 2011 Annual Convention
Agenda
• Understanding our new reality
• Why is it important to innovate?
• Characteristics of a good innovation
• What is happening in the innovation arena
• Final Comments
2
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Key 21st Century Macro Trends – World
Slowing
Population
Growth
Older
Consumers with
New Needs
Declining
% of HHs with
Children
Income Declines
& Concentration
Immigration
& Growth in
Ethnic Families
Rising Rate of
Obesity & Cost
of Healthcare
3
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Key 21st Century Macro Trends – Puerto Rico
Slowing
Population
Growth
Older
Consumers with
New Needs
Declining
% of HHs with
Children
Income Declines
& Concentration
Emigration
Rising Rate of
Obesity & Cost
of Healthcare
4
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
A challenging future between…
Very diverse consumer segments…
- Smaller
- Aging
- Economically distressed
…and a shrinking pie
5
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Population Growth Rate continues to decline...
World Population Growth Rate 1950–2050
3
1.16%
2
Annual Growth Rate
0.91%
1
0
1950
0.16%
2007
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
-1
-2.2%
-2
-3
Source: U.S. Census Bureau, March 2008; indexmundi.com
6
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Reversing the age Pyramid.
USA Population Change by Age Group 2000-2009
46%
45%
40%
32%
35%
22%
25%
15%
5%
13%
11% 12%
11%
-2%
4%
13%
6%
-3% -9% -7%
-5%
-15%
<5
5-13 14-17 18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-74 75-84 85 >
years years years years years years years years years years years years years years years
Source: US Census Bureau – The 2011 Statistical Abstract
7
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
And even more noticeable in PR, where age
ranges above 45 years are all estimated to
increase.
Puerto Rico
Population Change by Age Group – 2000 to 2010 (Est.)
40%
36%
31% 31%
30%
27%
20%
20%
11%
7%
10%
4%
-6% -5% -5% -4% -1%
7%
-4% 1%
0%
-10%
<4
5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75 >
years years years years years years years years years years years years years years years years
Source: Proyección de Población por Edad y Sexo, Puerto Rico, Años: 2001 al 2010
8
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
…Big cities loosing their population as
smaller cities becoming more important
Puerto Rico
Population Change by Municipality – 2000 to 2010
Source: US Census Bureau
9
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
A combination of a 5 year recession, almost no job
creations & lost equity has put the island into an even
more challenging position
Population and Employment Evolution 2000 - 2010
4100
3900
4022
3809
3725
3700
1266
1300
1200
3500
3300
1400
1100
1150
1103
3100
1000
2900
900
2700
800
2500
2000
2001
2002
2003
2004
Projected Population
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
2005
2006
Census
2007
Employees
2008
2009
2010
10
In the end, these changes are creating opportunities
in the market…
Health & Wellness
Comfort
Aging Population
Convenience & Value
Conservation
11
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Why is it important to innovate?
The world of innovation has changed
significantly in the past decade…
more sophisticated consumers
media & shelf clutter
consumer generated media
greater globalization
shorter time to prove success
stronger retailers
growing complexity
more competition
emergence
of
the
internet
accelerated development timelines
The Changing Face of
Innovation
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
13
Page 13
Investing during a recession helps you emerge
from the recession in a stronger position
• During the early 1980’s recession, companies that maintained
aggressive sales and marketing efforts during recessions enjoyed more
growth after the recession
275%
Revenue
Growth % in
First Five
Years After
Recession
19%
Companies that maintained sales
and marketing efforts during
recession
Companies that cut sales and
marketing efforts during
recession
Source: McGraw-Hill Research
14
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
The United States experienced both periods of growth
and recession from the early 80’s through the mid 90’s
Misery Index = Unemployment Rate + Inflation Rate
16
Misery Index
Denotes Period
of recession
(i.e. decline in
GDP) in the US
Unemployment Rate
14
Inflation Rate
12
%
10
8
6
4
2
0
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
Year
* Misery Index is the sum of the inflation rate and unemployment rate. **official US recession periods
15
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Perhaps surprisingly, the success rate of new
products is similar regardless of economic climate
Success Rate of new products & the Misery Index
16
BASES Success Rate
Denotes Period of
recession (i.e. decline
in GDP) in the US
14
Average Success Rate by Year
Misery Index
12
%
10
8
6
4
2
0
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
Year
* Misery Index is the sum of the inflation rate and unemployment rate.
16
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Looking into these facts the only thing to do
is: Continue to Innovate
• Innovation is key to your growth
• Consumers are still willing to buy new products as long
as it meets a need
• Your new product introductions can be successful even
during economic slowdown
• Investing in innovation now, will put you in an even
stronger position after the economic slowdown is over
• To make consumer pay premium price you need to put
something on the table
17
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Characteristics of a Successful Launch
Two ways to achieve growth
• Attract new buyers:
– Highly differentiated brands (truly “breakthrough”)
– Superior benefits to existing products
– Tremendous spending behind launch
– Innovate in low penetration categories
– Create a new category
– Growth due to consumer trends
• Expand Consumption among current buyers:
– Create a need to buy more often
– Create a proposition that encourages consumers to trade up
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
19
Taking a brief look into some innovation
from the retail landscape
Top consumer themes
Aging Population
21
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Older and younger segments of the population shop and
spend differently – USA and Puerto Rico
Total Retail Channels
175
Shopping Trips Per Household
USA
125
Shopping Trips Per Household
Puerto Rico
150
100
125
100
75
Greatest Gen
$55
Boom ers
Gen X
Millennials
Basket Ring Dollars Per Trip
USA
More than 50 years
36 to 50 years
Until 35 years
Basket Ring Dollars Per Trip
Puerto Rico
$40
$50
$45
$35
$40
$35
$30
$30
Greatest Gen
Boom ers
Gen X
Millennials
More than 50 years
36 to 50 years
Until 35 years
Greatest Generation: Prior to 1946; Boomers: 1946-1964, Gen X: 1965-1976, Millennials: 1977-1994
Source: Homescan®, a service of The Nielsen Company; Total U.S. 52 weeks ending 12/25/2010; excludes gas on or Rx only trips 22
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Retailers are focused on Seniors
Kroger: Seniors receive a 10%
discount OFF of your total purchases
on the first Wednesday of every month.
All Seniors, 60 years and older are
eligible! (southern Illinois, southern
Indiana, select KY & Nashville, TN
area stores Only!)
Rite-Aid offers 20% off your purchases the
first Tuesday of the month, plus all your
favorite benefits, including:
10% off your purchase all other Tuesdays
10% off Rite Aid Brand products every day
10% off cash prescriptions every day
Enrollment in Living More is free and easy
If you're 55+, you can save an
additional 10% on your food bill (less
V.I.P savings, taxes, and coupons)
the first Wednesday of every month.
Source: Company websites
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
23
A simple solution from Target – large print
on prescription medications
Source: Target
24
U.S. Consumer Trends
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Senior focus seen in H&B products and
smaller portion sizes in Food products.
Source: MultiAd Kwikee
25
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
In the end is important to remember that
Puerto Rico pyramid is shifting
Puerto Rico
Population Change by Age Group – 2000 to 2010 (Est.)
40%
36%
31% 31%
30%
27%
20%
20%
11%
7%
10%
4%
-6% -5% -5% -4% -1%
7%
-4% 1%
0%
-10%
<4
5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75 >
years years years years years years years years years years years years years years years years
Source: Proyección de Población por Edad y Sexo, Puerto Rico, Años: 2001 al 2010
26
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Top consumer themes
Comfort
Convenience & Value
27
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Winning & experimenting with technology
Source: Company websites; Progressive Grocer, Pittsburgh Post-Gazette & CincySavers.com
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
28
Technology & sustainability – I’ll drink to that!
Self-Serve Tanks
Bring Wine to
French
Supermarkets
Source: Dr. Vino
29
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Tesco unveils drive-through concept
Customers are able to drive to a
dedicated area in a Tesco store
at a set time and pick up their
shopping without having to leave
their car for a flat fee of £2
Source: Daily Mail / Masons News Service
30
U.S. Consumer Trends
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
E-Commerce sales have been steadily
gaining share for a decade
Quarterly US Retail E-commerce Sales
Source: US Census Bureau
Source: U.S. Census Bureau
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
31
Competition from companies who know
how to sell online
Source: Company websites
32
U.S. Consumer Trends
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
iPhone applications to simplify lives & make
smarter shoppers
Source: Apple
33
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Shoppers now can locate more than
100,000 items in Meijer Supercenters
Source: Meijer
34
U.S. Consumer Trends
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Convenient solutions for
breakfast
lunch
dinner!
Source: MultiAd Kwikee
35
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Convenient solutions for cleaning
Source: MultiAd Kwikee
36
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
With the great convenience of nearby stores, retailers need to
work on developing relationships with the consumer
•
•
•
•
•
•
•
•
•
•
8 Walgreens
4 Ind Drugstores
3 Amigo
3 Econo
3 Kmart
2 Supermax
2 Pueblo
2 Sup Independientes
2 Capri
1 Pitusa Discount
30 STORES!!!
37
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Top consumer themes
Health & Wellness
38
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Healthy label claims: Sales range from $ 5 billion
for Organics claims to $47 billion for fat claims
Billions
USA Dollar Sales by Label Claim
$48
$45
$42
$39
$36
$33
$30
$27
$24
$21
$18
$15
$12
$9
$6
$3
$0
52 Weeks Ending 04/16/2011
Fat Presence
Preservative Presence
Cholesterol Presence
Organic
Natural
Salt or Sodium Presence
Calcium Presence
Calorie Presence
Sweetener Presence
Caffeine Presence
Vitamin/Mineral Presence
Grain Type
Gluten Free
Source: Nielsen Scantrack & Nielsen LabelTrends Total U.S - Food/Drug/Mass Stores (excl. Walmart)
39
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Claim Labels in PR with most growth are the
100 Calories, w/ Vitamins & Sensitive.
PR Value Sales % Change by Label Claim
vs. Same Period LY
Wheat
W/Vitamins
Sugar Free
Sensitive
Organics
Light
Integral
Diet
100 Calories
-20% -10%
0%
10%
RY 2010 vs 2009
20%
30%
40%
50%
60%
RY 2011 vs 2010
Source: Nielsen Retail Index PR May 2012
40
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
There are struggling label claims, but others growing,
presenting opportunities.
Unit % Change vs. Year Ago
-14.1
-6.0
-4.9
-4.6
-2.7
-2.6
-2.5
-2.5
-1.3
-0.6
0.0
0.8
0.9
1.0
1.0
1.1
1.4
1.7
1.9
2.1
Sterol
Probiotic
Flax Or Hemp
Cholesterol Presence
Calorie Presence
Fat Presence
Multigrain
Soy
Preservative Presence
Caffeine Presence
Fiber Presence
Fortified
Sweetener Presence
Grain Type
CARB Conscious
Calorie 100
Vitamin Mineral Presence
Salt Or Sodium Presence
Iron Presence
Calcium Presence
Source: Nielsen Scantrack & Nielsen LabelTrends Total U.S - Food/Drug/Mass Stores
(excl. Wal-Mart) 13-weeks Ending 4/16/2011 vs. YAGO
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
47.8
38.1
22.7
14.4
13.9
12.9
12.4
11.5
9.5
8.7
8.5
8.4
7.6
4.4
4.0
Stevia
Low Glycemic
GMO Free
Omega Presence
High Fructose Corn Syrup Free
Hormone Antibiotic Free
Gluten Free
No MSG
Natural
Protein Presence
Fruit and Veg Presence
Organic
Lactose Presence
Oil Presence
Antioxidants
41
In the USA with the economy recovery in progress,
wellness is taking again one of the front seats
Sales Sales
in Dollar
Change
%%
USA
Change
in Dollar
30
25
20
15
10
5
0
-5
May-07 Aug-07 Nov-07 Jan-08 Apr-08 Jul-08 Oct-08 Dec-08 Mar-09 Jun-09 Sep-09 Nov-09 Feb-10 May-10 Aug-10 Oct-10 Jan-11 Apr-11
Organic Labels
All Nielsen Measured Categories FDMxWM
Source: Nielsen Scantrack & Nielsen LabelTrends Total U.S - Food/Drug/Mass Stores
(excl. Walmart) 4-Week Increments vs. YAGO
42
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
“In-store retail health clinics are saving patients
between $279 and $460 per visit, compared to
emergency room visits, and have the potential of
saving people as much as $4.4 billion a year.”
Source: Drug Store News, Company Websites
43
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
USDA proposing healthier standards for
federally subsidized school lunches
The new USDA guidelines would:
• Establish calorie limits in school meals
• Gradually reduce the amount of sodium in the meals over 10 years,
with the eventual goal of reducing sodium by more than half
• Ban most trans fats
• Require more servings of fruits and vegetables
• Require all milk served to be low fat or nonfat, and require all
flavored milks to be nonfat
• Incrementally increase the amount of whole grains required,
eventually requiring all grains to be whole grains
• Improve school breakfasts by requiring schools to serve a grain and
a protein, instead of one or the other
Source: Associated Press & USDA
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
45
Grocers stressing health & wellness solutions in
store layout, assortment, labels & advertising
Source: Company Websites
46
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Healthy eating education for kids
Source: giantfoodstores.com/kidhealthyideas
47
U.S. Consumer Trends
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
“Better for you” items
Source: MultiAd Kwikee
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
48
Health & Wellness
• Consumers respond to Claim Labels, seeking products that support a
healthy lifestyle.
• Retail efforts, New Product Developments and Advertising show news
ways of targeting the health & wellness focused consumers, by
providing them healthy solutions and targeted messages.
Puerto Rico
Population Change by Age Group – 2000 to 2010 (Est.)
40%
Major health problems
in Puerto Rico
36%
31% 31%
30%
27%
20%
20%
11%
7%
10%
4%
-6% -5% -5% -4% -1%
7%
-4% 1%
0%
-10%
1) Heart problems
2) Diabetes
3) Obesity
4) Hypertension
<4
5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75 >
years years years years years years years years years years years years years years years years
Source: Proyección de Población por Edad y Sexo, Puerto Rico, Años: 2001 al 2010
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
49
Top consumer themes
Conservation
50
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Sustainability in corporate messaging
Source: Company Websites
51
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Strong sustainability messaging
Source: The Coca-Cola Company
52
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
“Eco-friendly" shelf tags with small LCD displays
Source: http://www.zbdsolutions.com/aboutus/unique.html
53
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Kroger cutting store energy consumption & letting
shoppers know, so is Wal-Mart locally
Source: Kroger, Wal-Mart’s Wal-Paper Year 5, Q2
54
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Safeway takes their store brand natural
household cleaning line on the road
Source: Safeway
55
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Summary
& closing
thoughts
56
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Consumers share enduring themes
• Health & wellness
• Value
• Convenience
• Comfort & enjoyment
• Green
• Demographics
• Connected
• Global
57
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
What are you doing to take advantage of
these enduring themes?
• How do you innovate &
execute against
opportunities that are
evident to others & come
out ahead?
• How do you identify
opportunities where you
can provide unique
solutions?
58
Copyright © 2011 The Nielsen Company. Confidential and proprietary.
Thank you!
Alfonso Rivera
email: [email protected]
twitter: @arivera2020