• Save
2013 horsemeat brief patricio hidalgo analysis
Upcoming SlideShare
Loading in...5
×
 

2013 horsemeat brief patricio hidalgo analysis

on

  • 388 views

 

Statistics

Views

Total Views
388
Views on SlideShare
388
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

2013 horsemeat brief patricio hidalgo analysis 2013 horsemeat brief patricio hidalgo analysis Presentation Transcript

  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. By Patricio M. Hidalgo The Silent Crises Broadcasted1
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. Industry in Brief in the UK Historically, the UK Meat reputation held high-standards of quality and trust. The Supply Chain was simple and transparent: Meet Rancher Abattoir Retailers Processor Overtime, the rise of cost of food has put pressure on retailers and processors to find cheap suppliers, not always praising quality. Today, the UK Meat Supply Chain is complex: Retailers Meet Rancher Abattoir Broker Wholesaler Processor Food Service As a consequence, Meat processors and retailers lost traceability where the Meat they purchase originated from. 2
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. Impact of Horse Meat in the Category UK moved away from a traceable Supply Chain in search for “Cheap Food.” Retailers and Manufacturers do not have transparency the meat origin. This complex Supply Chain is prone-risk. Since the broadcasting of the crisis (Jan. 16, 2013), Meat sales volume decreased by 54% (overtime) and 44% of consumers felt misled by the labels. 1/3 of interviewed consumers are less likely to purchase processed meat. The UK government stated that “Horse Meat Scandal posts no health risks” to avert a consumer confidence crises. As a result, DNA testing are now required from the meat processors and/or retailers, affecting margins on meat ecosystem players. 3
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. How about the Consumer? The scandal of the Horse Meat generated an immediate consumer trust damage and uncovered questions on Processed Meat quality standards. As a result, sales declined in particularly on Frozen Meats, Beef Burgers and Ready Meals and Pies. Consumers shifted to Frozen Fish (+2.7% YA), Poultry (+7.3 % YA) and Poultry Burgers (+48.4%). According to Richard Dodd, British Retail Consortium spokesman (representing 85% of the UK Retail industry), stated: “ Our members tell us that the issue is not having an impact. People are clear that it is not a health issue, therefore not producing a change in consumer shopping habits (in the long-term).” From data, we can confirm that the negative trend in sales has reverted one month after the news breaking. Positive sales are moving upward and no major shifts on consumers behaviour overtime. The short-term sales declined in some food lines, other categories have benefitted, therefore, there is little net loss overall. 4
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. 2012 – 2013 Percentile E- Point of Sales Change Frozen Meat (Beef, Prepared & Treaded Red Meat, Burgers) Frozen Ready Meals Frozen Pies & Sausage Rolls 20.0 10.0 0.0 -10.0 -20.0 -30.0 FROZEN BEEF -40.0 FROZEN PREPARED TREATED RED MEAT -50.0 FROZEN RED MEAT BURGERS -60.0 FROZEN READY MEALS ∆12.01.2013 ∆ 26.01.13 ∆ 09.02.13 ∆23.02.13 ∆ 09.03.13 FROZEN PIES AND SAUSAGE ROLLS ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆ ∆12.01. 19.01.1 26.01.1 02.02.1 09.02.1 16.02.1 ∆23.02. 02.03.1 09.03.1 16.03.1 2013 3 3 3 3 3 13 3 3 3 FROZEN BEEF -0.2 -6.6 -24.2 -34.4 -32.0 -38.3 -36.0 -34.4 -33.6 -29.6 FROZEN PREPARED TREATED RED MEAT 13.2 -5.3 -19.5 -22.8 -24.9 -34.9 -27.7 -26.4 -25.6 -26.3 FROZEN RED MEAT BURGERS 8.7 -18.2 -35.4 -37.9 -41.8 -53.1 -49.3 -47.4 -44.0 -45.5 FROZEN READY MEALS 0.2 0.3 -2.4 -5.7 -3.2 -13.5 -19.3 -19.3 -16.8 -11.9 5 FROZEN PIES AND SAUSAGE ROLLS 11.0 14.8 4.7 -3.6 0.8 -7.3 -4.3 0.2 3.6 5.5
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. How about the Retailers? The “Testing Regime” is being implemented and becoming the norm, with quarterly reporting to the Food Standards UK Agency. A new costs represent £1 – 1.8 Million per year to assure Meat quality Due to the Horse Meat scandal, Tesco lost for the first time in history, 30% of its market share (according to Interbrand) creating an reputation issue that will need to be rebuilt overtime. Data shows that overall Retailer KPI’s were affected in the short-term with declines on: • Expenditures (-43.6%) • Sales Volume (-54%) • Average of Purchase Weight (-11.7%) – a key performer indicator in FMCG shares • Amongst others (Penetration -36.1%, Frequency – 8.8% and Trip Spent -3.2%) 6
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. Our View for Beefy Burt’s After one month of the news breaking, a positive trend can be seen on Frozen Burgers (-49.3% end of Feb. to -45.5% mid-March). However, Frozen Beef and Meat Burger categories are taking longer to show signs of recovery on the last term (Beef end of Feb. -24.2% to mid-March -29.6% and Meat Burgers -35.4% end of Feb to mid-March -45.5%). 7
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. Recommendations In order to address transparency, traceability and trust issues with both consumers and costumers, I recommend: • Trade Communications • Consumer Communications • Digital Brand Campaign – not an advertising message nor a theatrical add featuring bucolic scenes, instead a genuine representation of the sourcing of BB meat. These tactics are effective in the short-term and will address the slow down of Frozen Beef and Meat Burgers sales and turn it around. 8
  • Copyright ©2012 The Nielsen Company. Confidential and proprietary. 2013 – 2012 FROZEN MEAT & MEALS – Vol. Sales 60,000,000 60,000,000 50,000,000 50,000,000 40,000,000 40,000,000 30,000,000 30,000,000 20,000,000 20,000,000 10,000,000 10,000,000 0 0 WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE 12.01.13 12.01.12 19.01.13 19.01.12 26.01.13 26.01.12 02.02.13 02.02.12 09.02.13 09.02.12 16.02.13 16.02.12 23.02.13 23.02.12 02.03.13 02.03.12 09.03.13 09.03.12 16.03.13 16.03.12 WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE 1 .1 2.01 3 1 .1 2.01 2 1 .1 9.01 3 1 .1 9.01 2 26.01 3 26.01 2 02.02.1 02.02.1 09.02.1 09.02.1 1 .1 .1 3 2 3 2 6.02.1 1 3 6.02.1 23.02.1 23.02.1 02.03.1 02.03.1 09.03.1 09.03.1 1 2 3 2 3 2 3 2 6.03.1 1 3 6.03.12 FROZEN BEEF FROZEN LAMB FROZEN PORK FROZEN SAUSAGES FROZEN BEEF FROZEN LAMB FROZEN PREPARED TREATED RED MEAT FROZEN RED MEAT BURGERSFROZEN PORK FRZ RED/PORK OFFAL STANDARD FROZENFROZEN FISH SAUSAGES FROZEN POULTRY FROZEN POULTRY BURGERS FROZEN MEAT FREE FROZEN PIZZA & BREAD 9 FROZEN PREPARED TREATED RED MEAT MEALS FROZEN READY FROZEN RED MEAT BURGERS PIES AND SAUSAGEFRZ RED/PORK OFFAL STANDARD FROZEN ROLLS FROZEN FISH