Shopper Insight Focus Report, Flour

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Shopper Insight Focus Report, Flour

• Rachael Arding, Project Executive
• HGCA and VCR² Kent Business School Report

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Contents

• Providing Shopper Insights
• Objectives
• Data Sharing Restrictions
• Executive Summary
• Analysis
• Appendix

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Health Warning!

• The dunnhumby data offers unparalleled breadth
  and depth but it does not tell us why shoppers
  behave the way they do
• Further research is warranted in order to
  understand the purchasing drivers (e.g.
  attitudes, perceptions, motivations) before
  changes are made to the marketing mix (product,
  price, place, promotion) or resources are
  deployed for the development of new products

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Providing Shopper Insights
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Providing Shopper Insights

• Collaboration between HGCA and the Centre for
  Value Chain Research at Kent Business School
  since 2005
• Sponsorship of PhD students
• Access to panel of 1.4 million supermarket
  shoppers
• Provide generic and tailor made insight reports
  for the industry free of charge

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Centre for Value Chain Research
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Objectives
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Objectives

• Provide an overview of shopper behaviour and
  shopper segmentation for Flour category
• Identify opportunities for market/product
  development
• Highlight potential areas for further research
• Demonstrate the breadth and depth of shopper
  insight that is available to farmers and small
  food producers

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Data Sharing Restrictions
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Data Sharing Restrictions

• This information is supplied by Kent Business
  School on the strict understanding that
  recipients use it exclusively as part of their
  own marketing and product development activities.
  Under no circumstances should the information
  provided be shared with third parties, without
  our prior consent. Failure to comply with these
  requirements will result in the organisations
  involved being denied further (subsidized) access
  to the dunnhumby data and may jeopardise this
  service provision for farmers and small food
  producers in the future.

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Executive Summary
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Executive Summary (1)

• Shopper Behaviour
• Specialty flour including bread mixes is the
  largest category share, by value, at 41 of the
  category.
• Impressive sales growth for the Free from range
  which may be the result of the increasing
  interest of shoppers for health issues. However,
  due to a still low figure for penetration, there
  may be opportunities to launch new products and
  or adapt the offer to shoppers.
• Customer penetration figures are all lower than
  50, indicating that such a basic cooking
  ingredient as flour is not widely used.
• Repeat rates are fairly strong suggesting there
  are some loyal customers who buy these products.
  However there are still room for increasing these
  figures for example in the Organic subgroup.
• Regional Hotspots
• The best performing store has a penetration
  figure of just above 33 which denotes how the
  category struggles to attract more shoppers.

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Executive Summary (2)

• Shopper Segmentation
• Life-stage
• Pensioners and Older shoppers enjoy cooking
  activities are the segments of shoppers more
  likely to buy flour products
• Specialty products and Free from range are
  appealing to younger shoppers
• Lifestyle
• Less Affluent shoppers are mostly appealed by
  Plain and Self raising alternatives
• With a value added and a corresponding premium
  the specialised ranges attract the more affluent
  shoppers.
• Region
• East England county dominates the Plain and Self
  raising categories.
• Northern Ireland and Scotland perform best for
  the specialised range

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Executive Summary (3)

• Basket Analysis
• Other ready meals and convenience foods are
  closely associated with purchases of Flour
  products.
• Yeast and other baking products are mostly bought
  alongside flour products which indicates a clear
  purpose for a shopping mission.
• The difference in products bought along with
  organic flour products only, is not that widely
  marked.

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Analysis

• Composition of Flour Category

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Composition of Flour Category
Free From Range Flour (4 products)
Organic Flour (10 products)
Plain Flour (15 products)
Self Raising Flour (14 products)
Specialty Flour (50 products)
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Analysis

• Key Measures

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Key Measures

• Category Share
• The share of sales for each product sub-group as
  a of total category sales
• (Highlights the relative importance of
  different product sub-groups)
• Sales Growth
• Year on year growth of sales, by volume and value
• (Illustrates performance of different
  sub-groups over time)
• Penetration
• of shoppers who have made at least one purchase
  in the last 52wks
• (Indicates scope for attracting new buyers).
• Frequency of Purchase
• The average number of times a purchase as been
  made in the last 52wks
• (Indicates scope for increasing product usage)
• Repeat Purchase Rate
• of shoppers who have made at least two visits
  to the category in the last 52wks
• (Gives an indication of product performance and
  shopper loyalty)

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Key Measures Flour (52 wks to 28-Dec-08)

• Specialty flour including bread mixes is the
  largest category share by value at 41 of the
  category.
• Impressive sales growth for the Free from range
  which may be the result of the increasing
  interest of shoppers for health issues. However,
  the penetration of the subgroup is still very low
  therefore the impact on the overall category
  growth remains limited.
• Flour being a basic commodity we would expect a
  higher figure for Customer Penetration for these
  products. This may denote the disappearance of
  the traditional shopper type cooking from
  scratch.
• Repeat rates are fairly strong suggesting there
  are some loyal customers who buy these products.
  However there are still room for increasing these
  figures for example in the Organic subgroup

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Weekly Sales Trends Flour categories (104 wks to
28-Dec-08)
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Analysis

• Shopper Segmentation

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Shopper Segmentation

• Shopper profiles are presented in index form,
  with 100 representing the average for all
  supermarket shoppers
• Over-indexing segments purchase a
  disproportionately high share they find them
  appealing
• Under-indexing segments purchase a
  disproportionately low share they find them
  less appealing.
• In looking for potential target segments (those
  which are under or over performing) attention is
  drawn to those which over-index or under-index by
  at least 10
• Further segmentation, by geo-demographics and
  detailed lifestyle can be provided upon request

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Lifestage Segmentation Total flour (12 weeks to
15.02.2009)
Young adults are less buying into the flour
category
Young families are more likely to buy flour than
other shoppers
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Lifestyle Segmentation Total flour (12 weeks to
15.02.2009)
Mid market shoppers are slightly less appealed by
Flour than other lifestyles
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Regional Segmentation Total flour (12 weeks to
15.02.2009)
Thighs are the only chicken part to appeal to
Pensioners
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Lifestage Segmentation Plain and Self raising
flour (12 weeks to 15.02.2009)
Self raising flour appeal strongly to Pensioners
Young families are more likely to buy Plain flour
than other shoppers
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Lifestyle Segmentation Plain and Self raising
flour (12 weeks to 15.02.2009)
Plain flour appeals to Up market shoppers whilst
Self raising products tend to be preferred by
Less Affluent shoppers
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Regional Segmentation Plain and Self raising
flour (12 weeks to 15.02.2009)
Both types of flour are most likely to be bought
in East England and South West.
Thighs are the only chicken part to appeal to
Pensioners
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Lifestage Segmentation Free from range, organic
and specialty flour (12 weeks to 15.02.2009)
These types of flour are most likely to be bought
by Young families and appeal less to Pensioners
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Lifestyle Segmentation Free from range, organic
and specialty flour(12 weeks to 15.02.2009)
These types of flour are more likely to be bought
by Up market shoppers very weak appeal to
less-affluent shoppers
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Regional Segmentation Free from range, organic
and specialty flour(12 weeks to 15.02.2009)
Northern Scotland and South West are the counties
where these subgroups are the most likely to be
bought
Northern Ireland shoppers are not buying into the
Organic range flour,
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Analysis

• Areas for potential further research

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Areas for Potential Further Research

• This report reveals several areas which might
  warrant further research
• Would marketing campaigns of Free from range
  products be likely to increase the customer
  penetration?
• Northern Ireland shoppers are not buying into the
  Organic range flour, it might be interesting to
  look further this issue as to identify reasons
  and adapt marketing strategies.
• How can the category appeal to other than
  Pensioners shoppers and encourage cooking from
  scratch activities.
• Central Scotland county under performs for every
  subgroup, would a focussed awareness campaign
  appeal to new shoppers?

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Appendix
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the dunnhumby data

• 2yrs of weekly supermarket purchases
• 1.4 million shoppers
• Representative of 40 of UK households
• Over 30,000 food products
• Segmented by
• Lifestage (young adults, young families, older
  families, older adults, pensioners)
• Lifestyle (Up-market, Mid-Market and Less
  Affluent shoppers)
• Region (13 TV advertising regions)

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The dunnhumby data Lifestage Segmentation
shoppers
Lifestage segment
Age family
Adults aged 20-39 with no children
Young Adults
16
Adults aged 40-59 with no children
Older Adults
14
Adults with all children under 10
Young families
15
Adults with one or more child over 10
Older families
16
Adults over 60 with no children
Pensioners
9
Multigenerational households
Mixed
28
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The dunnhumby data Lifestyle Segmentation
shoppers
Key Characteristics
Lifestyle segment
time conscious, enjoy luxury products and are
willing to experiment
Finer Foods
17
interested in organic, environmental benefits,
low fat/sugar and calorie conscious
Healthy
9
regard food as fuel, are busy and rely heavily on
the microwave
Convenience
22
look primarily for value and rely on staple foods
Price Sensitive
16
have broad tastes, favour established brands and
are influenced by the needs of children
Mainstream
26
enjoy the art of cooking but rely on a fixed
shopping list so less likely to buy on impulse
Traditional
10
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The dunnhumby data Regional Segmentation
ISBA (TV advertising) regions

• North Scotland STV North (Aberdeen, Dundee)
• Central Scotland STV Central (Glasgow,
  Edinburgh)
• Borders Border Television
• North East Tyne Tees Television
• North West/ Lancashire Granada Television
• Northern Ireland - UTV
• Yorkshire Yorkshire Television
• Midlands Carlton Central
• East England Anglia Television
• London LWT
• Wales and the West HTV Wales HTV West
• South and South East Meridian Broadcasting
• South West Carlton West Country

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The dunnhumby data Regional Segmentation
shoppers
shoppers
Region
Region
Scotland
London
20
9
15
8
Midlands
Yorkshire
11
4
Southern England
South West
Lancashire (NW)
10
North East
3
9
East of England
3
Northern Ireland
9
Wales the West
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Contact Details HGCA

• For further Information about how your business
  can obtain more information like this please
  contact
• Rachael Arding
• HGCA Market Development Project Executive
• Email Rachael.Arding_at_hgca.com
• Telephone [phone]

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Contact Details VCR² and Kent Business School

• For further information about the Centre for
  Value Chain Research at Kent Business School,
  please contact
• Melanie Felgate
• Centre for Value Chain Research, Kent Business
  School, University of Kent, Canterbury, CT27PE
• Email m.felgate_at_kent.ac.uk
• Tel [phone]
• Website www.kent.ac.uk/kbs/cvcr

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Contact Details VCR² and Kent Business School

• For further information about the Centre for
  Value Chain Research at Kent Business School,
  please contact
• Professor Andrew Fearne
• Centre for Food Chain Research, Kent Business
  School, University of Kent, Canterbury, CT27PE
• Email a.fearne_at_kent.ac.uk
• Tel [phone]
• Website www.kent.ac.uk/kbs/cvcr

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Thank you