NPD Presentation

The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential
Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary
and Confidential and may not be disclosed in any manner, in whole or in part, to any third
party without the express written consent of NPD.
Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary
and Confidential and may not be disclosed in any manner, in whole or in part, to any third
party without the express written consent of NPD.
State of the Plate:
Fruit & Vegetable
Consumption Trends
March 2015

Trends in
Fruits & Vegetables
Consumption
2

Is Fruit & Vegetable Consumption Growing?
3

The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential
736
710 706
726
740 746
733 730 729
714
697
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trend in Total Fruit & Vegetable Consumption
(Annual Eatings Per Capita)
-7% over the last 5 years
Both categories are declining…
4

427 431
402
2004 2009 2014
Total Vegetables
187
204 201
2004 2009 2014
Total Fruit Excl. Juice
123 111 96
2004 2009 2014
Fruit Juice
But the decline in fruit is primarily driven by fruit juice.
-2% -14%
-7%
Trend in Fruit vs. Vegetable Consumption
5

9
16
51
Berry/Combo Juice
Apple Juice
Orange Juice
Fruit Juice:
12
13
14
24
32
46
Grapes
Melons
Oranges
Berries
Apples
Bananas
Total Fruit:
Top Fruit/Fruit Products Consumed
The large juices are driving the decline while the larger
non-juice forms are growing.
DRIVING GROWTH
(Pt.  ’14 vs. ‘09)
Berries (+4 vs. 2009)
Bananas (+2 vs. 2009)
DRIVING DECLINES
(Pt.  ’14 vs. ‘09)
Orange Juice (-6 vs. 2009)
Apple Juice (-2 vs. 2009)
Berry Juice (-2 vs. 2009)
96 AEPC (-14%, ‘14 vs. ‘09)196 AEPC (-2%, ‘14 vs. ‘09)
6

Staple side dishes like lettuce, green beans, and corn
are leading the decline in consumption.
25
28
29
39
44
69
75
Green Beans
Corn
Carrots
Tomatoes (Excl. Cherry)
Onions
Lettuce/Vegetable Salads
Potatoes
Top Vegetable/Vegetable Products Consumed
DRIVING GROWTH
(Pt.  ’14 vs. ‘09)
DRIVING DECLINES
(Pt.  ’14 vs. ‘09)
Carrots (+1 vs. 2009) Lettuce/Salad (-9 vs. 2009)
Spinach (+1 vs. 2009) Green Beans (-4 vs. 2009)
Avocado (+1 vs. 2009) Corn (-4 vs. 2009)
Kale (+1 vs. 2009) Onions (-3 vs. 2009)
Mixed Veg (-3 vs. 2009)
Total Vegetables:
402 AEPC (-7%, ‘14 vs. ‘09)
7

44.9%
33.6%
84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11 12 13 14
Beef/Pork/Poultry/Seafood
(% of In-Home Main Dishes at Dinner that included a piece of Meat/Poultry/Seafood)
The days of animal meat as the main entrée are fading.
8

1
-8 -5
2004 vs. 2014:
+20 AEPC
2004 vs. 2014:
+8 AEPC Vegetables
Fruits
FRESH PROCESSED FROZEN HOMEGROWN DRIED
5 Year Trend by Form
(Point Diff. in Annual Eatings Per Capita, 2009 vs. 2014)
Store fresh fruits and vegetables have both grown.
JUICE
6
-2 -2 -2 -14
N/C N/C N/C
N/C
PROCESSED FROZEN HOMEGROWN DRIED JUICEFRESH
9

119
111
2009 2014
Lunch
Total In-Home & Away-From-Home Prepared Vegetables
292
269
2009 2014
Dinner
-8% vs. ‘09
-7% vs. ‘09
Dinner and lunch are driving the decline in vegetables.
10

Dish Position for Total In-Home Vegetables
173 182
172
2004 2009 2014
Side Dish
(-5% vs. ‘09)
85
94 97
2004 2009 2014
Used as an Add/Ing to a
Main Dish
40 40 37
2004 2009 2014
Eaten "as is“ as part of
Main Dish
(+3% vs. ‘09)
(-8% vs. ‘09)
Most vegetables are eaten as a side dish but this behavior
is declining. Ingredient usage has grown.
11

1.79
1.59
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Number of Side Dishes Served When a
Side Dish is Present at Dinner
The number of side dishes served at an in-home dinner
meal is at an all time low.
12

55
60 59
27 27
20
2004 2009 2014
(-2% vs. ’09)Carried/Snack
(-26% vs. ’09)Dessert
Fruit consumed either as a side dish or main dish has
grown, while that eaten as a dessert has lost favor.
41
50
56
28
32
36
2004 2009 2014
(+10% vs. ’09)Side Dish
(+13% vs. ’09)Main Dish
Dish Position for Total Fruit Excl. Juice
13

67% of Fruit Juice is consumed at the breakfast occasion, which has the largest declines (-16% vs. 2009).
Daypart Consumption of Total Fruit Excl. Juice
Fruit is up both at breakfast and as a snack, but these
gains are offset by losses at both lunch & dinner.
-8% vs. ‘09-10% vs. ‘09
56 61 56
2004 2009 2014
Lunch
38 39 35
2004 2009 2014
Dinner
+5% vs. ‘09
53
61 64
2004 2009 2014
Breakfast
+5% vs. ‘09
(driven by a.m. snacking)
40 43 45
2004 2009 2014
Snacks
14

26%
13%
6%
Morning Occasions Lunch Occasions Dinner Occasions
Percent of Occasions Motivated Primarily By Health
Health motivations are most prevalent in the morning,
fueling fruit’s growth at breakfast and morning snack.
15

15%
13%
10%
8%
5%
5%
5%
4%
4%
3%
1. Candy
2. Fruit
3. Gum
4. Chips
5. Breath Mints/Strips
6. Ice Cream
7. Nuts
8. Cookies
9. Bars
10. Crackers
Top Snack Foods Eaten as a Between-Meal-Snack
(% Eatings)
Fruit is the second most popular snack so should benefit
from the changing mindset on snacking.
16

250
270
290
310
330
350
370
390
410
430
'06 '07 '08 '09 '10 '11 '12 '13
Better-For-You Snacks
+ 14% vs. 2006
Sweet Snacks
- 6% vs. 2006
Savory Snacks
+ 3% vs. 2006
Better-For-You Snack Foods is the growth area.
Ready-to-Eat Snack Foods
(Annual Eatings Per Person)
17

In summary, changes in fruit and vegetable consumption
have been driven by several factors:
Losses for …
• In-home
• Processed/Canned Fruit, Homegrown
• Lunch, Dinner, Dessert Use
Fruit Juice: -14% vs. 2009, driven by breakfast
-30 AEPC vs. ‘09 (-7%)-4 AEPC vs. ‘09 (-2%)
Losses for …
• In-home and Away-from-home
• Lettuce/Salad, Green Beans, Corn,
Onions, Mixed Vegetables
• Processed/Canned, Homegrown
• Dinner, Lunch
• Side Dish Use
• Eaten “As Is”
Total Fruits Total Vegetables
Gains for …
• Berries, Bananas
• Store Fresh Fruit
• Breakfast, Snack (Morning Snack)
• Side Dish Fruit, Main Dish Fruit Gains for …
• Store Fresh Vegetables
• Additive/Ingredient use in Main Dishes
18

Consumer
Demographics
19

364 374 376 351 358 374 439 487 378 384 418 456 489
< 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+
Total Fruit excl. Juice
Total Vegetables
305 227 180 128 130 135 199 267 172 171 196 238 296
< 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+
Adult Males Adult Females
Adult Males Adult Females
Individual Age of Eater (annual eatings per capita)
Fruit juice age of eater is similar to Total Fruit Excl. Juice.
20

-80 -60 -40 -20 0
Females 65+
Females 55-64
Females 45-54
Females 35-44
Females 18-34
Males 65+
Males 55-64
Males 45-54
Males 35-44
Males 18-34
13-17
6-12
<6
Total Vegetables
-75 -50 -25 0 25 50
Females 65+
Females 55-64
Females 45-54
Females 35-44
Females 18-34
Males 65+
Males 55-64
Males 45-54
Males 35-44
Males 18-34
13-17
6-12
<6
Fruit Excl. Juice
-50 -25 0
Females 65+
Females 55-64
Females 45-54
Females 35-44
Females 18-34
Males 65+
Males 55-64
Males 45-54
Males 35-44
Males 18-34
13-17
6-12
<6
Fruit Juice
Trend of Individual Age of Eater
(Pt. Diff. in Annual Eatings Per Capita, 2009 vs. 2014)
21

Total Fruits (including juice)
-56 -17 -14 -36
-64
Singles
Working
Women
Traditional
Families Empty Nester Seniors 65+
Total Vegetables
Singles
Working
Women
Traditional
Families Empty Nester Seniors 65+
-29
23 24
-28
-66
Trend by Lifecycle
(2009 vs. 2014 Point Difference in Annual Eatings Per Capita)
Working Women/Traditional Family HH’s are consuming
more fruit per capita over time. Older consumers declining.
Greatest declines for fruit juice led by Seniors
22

348 394 387 475 473
118
158 211
270 259
62
86 91
98 96
Fruit Juice
Total Fruit excl Juice
Total Vegetables
Consumption by NET® Segment
Natural Health Embracers and Traditional Health
Followers consume the most while Short Cut Fuelers
consume the least.
Health
Strugglers
Natural
Health
Embracers
Trad’l
Health
Followers
Family
Pleasers
Short Cut
Fuelers
23

-26 -19
-58 -60 -44
Total Vegetables
2 1 -38 -38 -26
Trend by NET® Segment
(2009 vs. 2014 Point Difference in Annual Eatings Per Capita)
Natural Health Embracers and Health Strugglers have
shown the greatest declines in fruit & vegetables over time.
Greatest declines for fruit juice led by Health segments.
Health
Strugglers
Natural
Health
Embracers
Trad’l
Health
Followers
Family
Pleasers
Short Cut
Fuelers
Total Fruits (incl. Juice)
Health
Strugglers
Natural
Health
Embracers
Trad’l
Health
Followers
Family
Pleasers
Short Cut
Fuelers
+2 +1
24

The Future of
Fruits & Vegetables
25

TREND EFFECT
NPD’s Cohort Aging Analysis & Forecast:
POPULATION
EFFECT
AGING EFFECT
GENERATIONAL
EFFECT
5 or 10 Year Forecast
Identify opportunities & risks associated with changing
consumer behavior before they occur.
26

1. TREND EFFECT
427 431
402
309 315
296
187
204 201
175 183 183
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Trend of Total Fruit & Vegetable Consumption
‘04 vs. ’14: -7%
‘04 vs. ’14: - 5%
‘04 vs. ’14: +7%
‘04 vs. ’14: +3%
Total Vegetables
Total Fruit
Total Fresh Vegetables
27

2. POPULATION EFFECT
364 374 376 365 372 397 448 488
305 227 180 152 153 167
220
282
158
119 107 83 73 76
92
115
< 6 6-12 13-17 18-34 35-44 45-54 55-64 65+
Total Vegetables Total Fruit Excl. Juice Fruit Juice
-20%
0%
20%
40%
60%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78+
Overall Growth- 2019 vs. Today
Percent Change in Population by Age
Trend of Total Fruit & Vegetables Project Eatings
28

3. AGING EFFECT
Aging Curve
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Age of Eater
Pop '19 Pop '14 Total Vegetables Total Fruit
29

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+
Total Fruits
(AEPC Indexed to Total)
2004 2014
102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149
0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+
Total Vegetables
(AEPC Indexed to Total
2004 2014
67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124
4. GENERATIONAL EFFECT
30

3.8%
3.9%
0.8%
-0.9%
Forecasted Impact of the Cohort Effects
(over the next 5 years)
Overall
Population
effect
Age Effect
Trend
Effect
What is the forecast for Total Fruit consumption?
AEPC 296 289 289
85,887,414
91,505,701
95,002,270
2004 2014 2019
Total Fruit
(Actual and Projected Annual Eatings)
% Change
today vs. 10
years ago:
+6.5%
% Change
forecast vs.
today:
+3.8%
Fruit consumption will
stay on par with
population growth.
31

85,887,414
91,505,701
95,002,270
2004 2014 2019
Total Fruit
AEPC 296 289 289
% Change
today vs. 10
years ago:
+6.5%
% Change
forecast vs.
today:
+3.8%
What is the forecast for Fruit consumption when Juice is
excluded?
51,367,840
61,094,398
66,690,699
2004 2014 2019
% Change
today vs. 10
years ago:
+18.9%
% Change
forecast vs.
today:
+9.2%
AEPC 177 193 203
32

4.3%
3.9%
1.4%
-0.9%
Forecasted Impact of the Cohort Effects
(over the next 5 years)
Overall
Population
effect
Age Effect
Trend
Effect
What is the forecast for Total Vegetable consumption?
AEPC 411 393 395
119,304,506
124,398,668
129,800,889
2004 2014 2019
Total Vegetables
% Change
today vs. 10
years ago:
+4.3%
% Change
forecast vs.
today:
+4.3%
Vegetable consumption
will slightly outpace
population growth.
33

AEPC 411 393 395
119,304,506
124,398,668
129,800,889
2004 2014 2019
Total Vegetables
% Change
today vs. 10
years ago:
+4.3%
% Change
forecast vs.
today:
+4.3%
What is the forecast for Fresh Vegetable consumption?
48,829,851
55,888,416
60,052,259
2004 2014 2019
Total Fresh Vegetables
% Change
today vs. 10
years ago:
+14.5%
% Change
forecast
vs. today:
+7.5%
AEPC 168 177 183
34

What to Focus on Next
35

What to focus on next:
1. Reposition Fruits & Vegetables
2. Extend Partnerships
3. Remember Pricing Strengths
4. Advance Away-From-Home Opportunities
36

Reposition
Fruits and
Vegetables
Your core essence
regarding health
has lost meaning in
the world of health.
1.
37

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+
Total Fruits
(AEPC Indexed to Total)
2004 2014
102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149
0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+
Total Vegetables
(AEPC Indexed to Total
2004 2014
67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124
4. GENERATIONAL EFFECT
38

The decline in fruit & vegetable is being driven by ‘health’
oriented consumers.
2%
5%
-16% -12% -12%
-5%
-1% -14% -9% -7%
Trend by NET® Segment
(2009 vs. 2014 % Difference in Annual Eatings Per Capita)
Health
Strugglers
Natural
Health
Embracers
Trad’l
Health
Followers
Family
Pleasers
Short Cut
Fuelers
Health
Strugglers
Natural
Health
Embracers
Trad’l
Health
Followers
Family
Pleasers
Short Cut
Fuelers
Total Vegetables
Total Fruits (incl. Juice)
39

Summary of NET® Segment Descriptions:
o Driven by convenience
o Tend to repetitively eat same foods
o Least likely to try new foods
o 45+, No kids <18 in HH
o Lower income
o Tend to have health condition
Health
Strugglers
o Driven by health and nutrition
o Not driven by convenience
o Prefers natural/herbal remedies
o Preferences for organic foods
o Younger, female
o Lower income
o Less to report health condition
Natural Health
Embracers
o Driven by health & nutrition
o Like to try new foods
o Less sensitive to food prices
o Older 65+
o Upper income
o Educated
o Tend to have health condition
Trad’l Health
Followers
Short Cut
Fuelers
o Lives are hectic & rushed
o Driven by convenience
o View food as just “fuel”
o Skews male
o Less concern w/ price, health
Family
Pleasers
o Influenced by kids
o Focus on pleasing the family
o Lives feel hectic & rushed
o Tend to be females 18-34
o Food choices not driven by
health/convenience
40

LUNCH
■ Easy to prepare
■ Quick to clean up
■ Make quickly
■ Didn’t cost a lot
■ Could eat quickly
■ My favoriteDINNER
■ Taste
■ Easy to prepare
■ Fills me up
■ Something everyone likes
■ Requires little planning
■ Quick to clean up
MORNING
■ Easy to prepare
■ Routine
■ Taste
■ Fills me up
■ Requires little planning
■ Make quickly
Top Motivations Driving Food and
Beverage Selections At-Home and
Away-from-Home Combined
Your positioning must differentiate in health
and meet broader needs of the occasion.
41

3. AGING EFFECT
Aging Curve
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Age of Eater
Pop '19 Pop '14 Total Vegetables Total Fruit
42

DRIVER BARRIERTRUTH
I wish…
I hate...

Extend
Partnerships
Continue to work with
core partners who
can use your help…
but also look to new
partnerships.
2.
44

• Poultry Entrees
• Sandwiches
• Beef Entrees
• Fruit Eaten “As Is”
• Bread
• Rice
• RTE Cereal
• Poultry Entrees
• Eggs/Omelettes
• Vegetables & Legumes
• Potatoes
• Salads
MAIN DISHES
SIDE DISHES
MAIN DISHES
SIDE DISHES
Accompaniments to
Vegetables Eaten “as is”
Accompaniments to Fruit
Excl. Juice Eaten “as is”
Overdeveloped Accompaniments to
Vegetables and Fruit Eaten “As Is”
(Based on Index >120)
Main dish affinities to vegetables tend to be dinner
oriented items while breakfast foods such as cereal and
eggs are popular accompaniments to fruit.
45

Top Host Foods to
Add/Ing Total Vegetables:
Salads
26 AEPC, -18% (2009 vs. 2014)
Sandwiches
24 AEPC, -7%
Hmde Variety Dishes
16 AEPC, +3%
Italian Dishes
15 AEPC, -4%
Top Host Foods to Add/Ing Fruit
Excl. Juice:
RTE Cereal
8 AEPC, -11% (2009 vs. 2014)
Hot Cereal
5 AEPC, N/C
Salads
4 AEPC, -14%
Top Host Foods to Additive/Ingredient
Total Vegetables and Fruit Excl. Juice
(% Eatings)
35% of Total Vegetables are used as an
Additive/Ingredient to another dish
17% of Total Fruit Excl. Juice is used as
an Additive/Ingredient to another dish
However, usage in these key host foods are declining
and can use your help.
46

12.5
10.7
9.6
9.0
8.3
7.0
6.7
6.2
6.1
5.3
1. Yogurt
2. Bottled Water
3. Pizza
4. Poultry Sandwiches
5. Mexican Food
6. Fresh Fruit
7. Bars
8. Frozen Sandwiches
9. Chips
10. Pancakes
Top Ten Foods/Beverages that are Part of
More American Diets
(Pt. Change in % of Americans Consuming At Least Once in Two Weeks)
And while our diet changes slowly, there are shifts happening.In addition, you may want to look to these new partners
that have enjoyed solid growth during the past decade.
2014 vs. 2004
47

Remember
Your Pricing
Strengths
Think broader
about your pricing
decisions.
3.
48

23.4
’30s ’40s ’50s ’60s ’70s ’80s ’90s
1929 2012
Food Spending as Percent of U.S.
Disposable Personal Income
’00s
10.0
We do not let food costs rise faster than our incomes.
9.5
9.7 9.7 9.8
10.0
2008 2009 2010 2011 2012
49

Cost of Average Meal per Eater
Restaurant meals cost more than those made at home.
$6.96
$2.24
Purchased at Restaurant Made in-home
50

$4.62
$5.25
$5.89
$6.48
$6.96
$1.44 $1.60
$1.93 $2.08 $2.24
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Average Cost of Restaurant
Meal per Person
Average Cost of Meal Made
In-Home per Person
Trended Cost of Average Meal per Eater
Has your pricing outpaced the cost of away from home
meals to garner a larger share of wallet?
51

Advance Away-
From-Home
Opportunities
Focus primarily on
home but efforts
to increase presence
at Foodservice are
still needed.
4.
52

32%
64%
49%
21%
12%
22%
27%
14%
9%
Fast Food Family/Coffee Shp Highr Pricd Rest. School
% of Indiv. Who Visit in 2 wks % of Indiv. Who Consume AFH Fruit/Veg in 2 wks
Away-From-Home Sources of Fruits and Vegetables
(2 week % Penetration)
Fast Food presents an opportunity for growth.
Opportunity
53

(Share of Traffic)
19% 9% 14% 20% 22% 16%
Most likely to have kids
Notable cut backs continued for consumers 25-49,
while visits increased for those 65+
146
178
216 215 219
200
149
193
206 205
215
204
150
188
200
191
213 219
Under 18 18-24 25-34 35-49 50-64 65+
YE Nov'12
YE Nov'13
YE Nov'14
Restaurant Meals and Snack Occasions Per Capita
54

6% 6%
9% 8% 7%
QSR
YE Nov'14 Traffic 0%
YE Nov'10 YE Nov'11 YE Nov'12 YE Nov'13 YE Nov'14
0% 1% 1% 0% 1%
-1%
0% 1% 0% 0%
F.C. Unit PCYA 4% 6% 7% 7% 6%
Fast Casual is the only QSR segment that has shown
consistent growth year over year.
QSR
excluding Retail and
Fast Casual
(77%)
Retail
(17%)
C-Stores
Morning Meal
Fast Casual
(6%)
47%
CTG
Traffic % Change vs. Year Ago
55

In summary, there has never been a better time to be in
the fruit and vegetable business:
The demographics are favorable
There is a consumer need
Though fighting inertia…advanced innovation
and marketing can pay big dividends
56

Sometimes it’s hard to see!
Joe.Derochowski@npd.com
57

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