GREY Food Trends 2009 GREY Food Trends Holistic Food

Outlook 2009 The "Credit Crunch Cuisine"

Recession trends 2009 The food industry defies the crisis

The food industry defies the crisis

Grocery retail sales rise despite recession Verdict Research UK Forecast 2009: Retail: -0.6% Retail Food: +3.3% Asda Stores Ltd: 9 new stores, 7000 new jobs Tesco 200 new stores, 10 000 new jobs Sainsbury: 5000 New Jobs Aldi: One new store per week Source: twnetwork.de, Jan 2009

Verdict Research UK Forecast 2009:

Retail: -0.6%

Retail Food: +3.3%

Asda Stores Ltd: 9 new stores, 7000 new jobs

Tesco 200 new stores, 10 000 new jobs

Sainsbury: 5000 New Jobs

Aldi: One new store per week

Food and household products resist the recession Premier Foods sales: +10% in the second half of 2008 Largest British food producer Source: The Guardian 2008

Recessions trends 2009 1. The food industry defies the crisis 2. Consumers cut on restaurant spendings

The situation is getting serious British pubs have lowest beer sales since the “Great Depression ” Beer sales in supermarkets and kiosks rise by 4% Source: British Beer Barometer 2008

Restaurants pay the price Technomic foodservice consultancy Forecast USA: Fullservice Restaurants: -6,0% Quick Service Restaurants: +/- 0 Source: Penton Business Media 2009

Recession trends 2009 1. The food industry defies the crisis 2. Going out becomes an opportunity for savings 3. Consumers retreat to their homes

Staying in is the new going out Lovefilm DVD Rental has 40% more members since summer 2007 Source: The Observer, Jan 2009

Success of premium ready meals as a restaurant substitution Source: The Observer, Jan 2009, Technioom 2009 Waitrose "As good as going out", sales: +30% in 2008 Ready meals growth USA 2008: +6%

Commuters are learning to prepare a lunchbox Source: timesonline.co.uk, Sept 2008 Tupperware lunch box : +40% Sandwich bag sales: +34% Thermos flask sales : +100% Sainsbury‘s sales numbers year to year Sept 2008

Recession trends 2009 1. The food industry defies the crisis 2. Going out becomes an opportunity for savings 3. Consumers retreat to their homes 4. Consumers seek savings without compromising on quality

Two phases of the credit crunch down grade „ In past times it served as a restaurant substitute when consumers were under spending pressure, but increasingly the mainstream supermarkets compete effectively on premium ranges" Sir Stuart Rose Executive Chairman, Waitrose

Private premium labels under increasing price pressure Spectacular success of Marks & Spencer "Dine for Two for 10 Pounds" promotional campaign Copy of the campaign by Waitrose: Plus bottle of wine on top

Mainstream private labels were starting the price battle "Feed Your Family For a Fiver” campaign by Sainsbury's discount chain. Weekly planner sends online recipes with cheap meal suggestions. Large sales increase after each recipe suggestion: e.g. +300% sausage sales

Recession trends 2009 1. The food industry defies the crisis 2. Going out becomes an opportunity for savings 3. Consumers Retreat to their Homes 4. Consumer seek savings without compromising on quality 5. The better world has to wait for better times

Consumers replace premium fruit juices by premium private labels Innocent Smoothies Sales: -20% between April 2008 and Sept 2008 Main competitor PJ Smoothies lost even more. Source: Drink Business Review, Dez 2008

„ Deep greens“ stay loyal to organic, „Light Greens“ change sides UK organic Nov 2008: +2% year to Year (Nov 2007 +16%) U.S. organic Dec 2008: +5,8% year to year (Dec 2007 +27%) German organic Dec 2008: +10% year to year (Dec 2007 +14%) Source: BOLW, Nielsen in Reuters News Jan 2009

Local production becomes more relevant than organic Consumers who prefer locally produced food, almost doubled in the last year to 27%. Consumer who are preferring organic decreases from 24% (Jan 2008) to 19% (Jan 2009) IGD Shopper Trends 2009 Source: Igd.com, Jan 2009

Recessions trends 2009 1. The food industry defies the crisis 2. Going out becomes an opportunity for savings 3. Consumers retreat to their homes 4. Consumer seek savings without compromising on quality 5. The better world has to wait for better times 6. In bad times consumers turn to nostalgic worlds

Success Formula for 2009: comfort, nostalgia and humor Grocery Magazine Top 14 Food Brands 2008 "Brands that offer comfort and nostalgia thrive in a tough climate as well as brands that have humour.“ Claire Nuttall, Grocery Magazine Source: Grocery Magazine Top Brands 2008

Revival of nostalgic 1980s food brands . In difficult times successful food brands embody the comfort of mother's kitchen table Birds Eye Potato Waffles +67% Baked beans + 32% Fish fingers + 29%

In difficult times successful food brands embody the comfort of mother's kitchen table

Birds Eye Potato Waffles +67%

Baked beans + 32%

Fish fingers + 29%

Longing for homeland and familiarity . Source: Grocery Magazine Top Brands 2008 Walker crisps has been part of British snack culture for generations 2008-2009 sales growth by 9.5%

British tradition offers orientation to UK consumers Hovis Bread is positioned as part of British history 13% sales growth in 2008 Source: The Guardian 2008

Recession trends 2009 1. The food industry defies the crisis 2. Going out becomes an opportunity for savings 3. Consumers retreat to their homes 4. Consumer seek savings without compromising on quality 5. The better world has to wait for better times 6. In bad times consumers escape in nostalgic retro worlds 7. Consumers are looking for comfort in “good mood food”

Rescession food has to balance moods and feelings UK chocolate sales rise by 42% (Aug 2008 to Nov 2008) Source: The Sun, Nov 2008

The end of lifestyle advertising and comeback of sentimentality “ Open Happiness” replaces “Coke Side of Life” Focus on basic product line in US. Coke wants to offer a small time out from the sorrows of the recession. Source: Associated Press Jan 2009

How to navigate a food brand through the recession? In a climate of crisis, food brands have to offer an immaterial value to a sentimental consumer who is longing for security, simplicity and comfort.

Bon Appetit!

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Contact Alessandro Panella Head of Strategic Planning Grey Worldwide GmbH Platz der Ideen 1 40476 Düsseldorf T +49.211.3807-444 M +49.172-663-4941 alessandro.panella@grey.de Sebastian Brunner Strategic Planner Grey Worldwide GmbH Platz der Ideen 1 40476 Düsseldorf T +49.211.3807-7614 F +49.211.3807-367 [email_address]

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GREY Worldwide GmbH Platz der Ideen 1 | D-40476 Düsseldorf | T +49 211 3807-0 | F +49 211 3807-367 | duesseldorf@grey.de | www.grey.de

GREY Worldwide GmbH

Platz der Ideen 1 | D-40476 Düsseldorf | T +49 211 3807-0 | F +49 211 3807-367 | duesseldorf@grey.de | www.grey.de