Consumer and Retail Trends

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Consumer and Retail Trends

• March 3, 2006

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Todays Consumer

• The traditional American household has changed
• More than 66 percent of Americans live in one or
  two-person households, while 34 percent are
  families with children with the highest at-home
  consumption
• Of the smaller households 24 percent are young
  singles or Gen X 42 percent are empty nesters or
  active elderly or Baby Boomers
• Considered the most influential consumer segment
  for food products approximately 50 percent of
  total spending power in the U.S.
• More diverse than previous generations in terms
  of lifestyle, health, family size and income

Source USPB, FMI, Packer Fresh Trends research
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Todays Consumer

• Household size decreased the average household
  size is 2.5 people

Husband and wife with children under 18 19 of
total households
Source Demographics of Consumer Food Spending
2004, The Food Institute
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Todays Consumer

• Because households have changed shopping
  patterns have changed
• Purchase of convenience foods has increased 50
  percent
• The growth of value added items is a key
  indicator
• Time spent preparing dinner is down from 49 to 31
  minutes
• Shopping occurs across multiple formats, multiple
  trips
• Only one in three households now conduct a
  primary weekly shopping trips, down by 50
  percent
• Consumers making multiple quick trips which
  often favor retail segments other than
  supermarkets
• Greater focus on natural products and organics

• Source What America Eats, 2005

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Shopping Behavior Trends

• Most trips are for immediate needs

Source ACNielsen Homescan
Total US - ACNielsen Homescan Shopper Missions
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Shopping Behavior Trends

• Consumers have a large number of retail channels
  from which to choose

Source ACNielsen Homescan
Includes Kmart, Target Wal-Mart Supercenters
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Shopping Behavior Trends

• Basket size varies widely

Supercenters driving sales from both sides of the
store
Source ACNielsen Homescan
Includes Kmart, Target Wal-Mart Supercenters
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Shopping Behavior Trends

• Consumer trip patterns vary greatly by retail
  channel

Source ACNielsen Homescan
Total US - ACNielsen Homescan 52 w/e 3/26/05
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Todays Consumer

• The U.S. senior population is rapidly growing,
  especially among 65

Source US Census Bureau
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Todays Consumer

• The share of spending by U.S. seniors will
  increase with population growth

ACNielsen Homescan estimate Source US Census
Bureau ACNielsen Homescan ASP
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Todays Consumer

• Hispanic Consumer Opportunity
• By 2020, the Hispanic population in the U.S. will
  top 60 million, about 20 percent of the total
  population
• The average Hispanic spends more on groceries
  than Anglos (133 vs. 91). This is true for all
  Hispanic acculturation segments and income
  groups.
• Hispanics put a premium on fresh foods causing
  them to shop more often (26 more trips).
• Hispanics visit more stores and spend 34 percent
  of food dollars outside their primary
  storedouble the national average.
• Their primary store is likely to be a traditional
  grocery store, but Hispanics shop all types of
  stores.

Source FMI/ACN NewsletterFebruary 14, 2005
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Todays Consumer

• Consumers and Nutrition
• While 87 percent of consumers believe that
  healthy eating is a better way to manage illness
  than medication, their shopping habits are driven
  by convenience, cost and nutritional information.
• Children have strong influence on the supermarket
  purchases
• Parents managing their own diets and those with
  healthy weights are more likely to make the
  effort to keep their kids diets nutritious.
  Overweight parents are more likely to compromise
  on nutritional quality to have a complaint-free
  dinner.
• Organic foods continue to increase in popularity
  as shoppers seek healthier diets. The most
  popular organic foods are fruits and vegetables
  with 37 percent of consumers purchasing regularly

Natural Marketing Institute, LOHAS Database, 2004
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Food Trends

• Portion Control Dieting
• New 100-calorie packages from food manufacturers
  such as Kraft Foods, Coca-Cola Co. and Procter
  Gamble Co.
• Expected to extend to cereals, ice cream, juice
  and other products
• Experts say portion control dieting is healthier
  than low-fat and low-carb dieting

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Food Trends

• Manning the Stove Family men are the new foodies
• A new survey found the number of men who cook for
  fun at least twice a week has increased 36
  percent the last 10 years
• TVs the Food Network reports a definite
  increase in male viewership
• Real Men Cook is a nation wide cooking for
  charity event
• This year 1,000 male cooks will feed 30,000 in 10
  cities
• Source Mediamark Research