IRI´s Jose Carlos Gonzalez Hurtado says: "Retailers and manufacturers can reduce assortment and still grow sales if they closely monitor assortment with big data analytics and technology” View his presentation as a speaker at the CGFsummit on June 15th about ‘Shrink to Grow: how to use analytics and technology to optimise your line-up’

1. SHRINK
TO GROW
USE ANALYTICS AND
TECHNOLOGY
TO OPTIMISE YOUR
LINE-UP
Brenda Koornneef
Business Executive, Group Marketing
& Corporate Strategy, Tiger Brands
José Carlos González-Hurtado
President of IRI International
15th-17th June 2016,
Consumer Goods Forum Global
Summit 2016

2. AGENDA
CONTENTS
1 HOT TOPIC ON YOUR AGENDA
2
THE TIGER BRANDS SUCCESS
STORY
3 HOW TO WIN

3. HOT TOPIC ON
YOUR AGENDA

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CHOICE IS A KEY DRIVER TO WIN CLIENTS
"WHY HAVE YOU SELECTED THIS SHOP TODAY FOR YOUR GROCERY
SHOPPING?"
Source: IRI Shopper Survey France 2015
Price Selection of
products
Point of sales
comfort and
clarity of the
offer
Promotions Private labels New products
* Except proximity from your home or work
30%
25%
20%
15%
10%
5%
0%

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BUT CURRENT OVERABUNDANCE OF PRODUCT
OFFERING…
In suppliers price list
In a large hypermarket
In a supermarket
Bought in a year by
household
In an average basket
SM/HM
Number of FMCG items available – average per store (supermarkets) Europe and US
400.000 SKU’s
(US = 970 000)
20.000
to 50.000 SKU’s
6.000
to 9.000 SKU’s
300 SKU’S
(US 600)
10 to
50 SKU’s
MARKET SITUATION

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AND THE MULTI-CHANNEL REVOLUTION…
M-commerce for a
rebirth of loyalty
programs and in-
store
personalization
Demand for fresh
products and short
time delivery is
increasing
Different trip
missions with
different banners
at different times
of the week
Online/Click &
Collect (Drive)
growth
Convenience is
growing
in importance
On-the-go
shopping
with QR code -
Shopping
walls is growing
Emergence of
pure players in
FMCG

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AND THE MULTI-CHANNEL REVOLUTION…
M-commerce for a
rebirth of loyalty
programs and in-
store
personalization
Demand for fresh
products and short
time delivery is
increasing
Different trip
missions with
different banners
at different times
of the week
Online/Click &
Collect (Drive)
growth
Convenience is
growing
in importance
On-the-go
shopping
with QR code -
Shopping
walls is growing
Emergence of
pure players in
FMCG

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FORCES RETAILERS
TO RETHINK
ASSORTMENT
TESCO CUTS RANGE
BY 30% TO SIMPLIFY
SHOPPING
BY REDUCING NUMBER OF
PRODUCTS FROM 90,000,
SUPERMARKET WILL BE ABLE
TO CUT PRICES AND IMPROVE
AVAILABILITY ON ITS SHELVES
Friday 30 January 2015

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…AND
MANUFACTURERS
TO FACE NEW
CHALLENGES
 LIMITED SHELF SPACE
 RETAILERS REJECT "ME
TOO" PRODUCTS
 SHOPPER IS MORE
DEMANDING
 THE PRIVATE LABEL
PRESSURE
 MORE DIFFICULT TO
STAND OUT OF THE
SHELF

10. THE TIGER BRANDS
SUCCESS STORY

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11
A top 40 JSE (JHB
Stock Exchange)
listed company
Leading FMCG
Manufacturer in SA:
• Baby Care
• Beverages
• Grains
• Groceries
• Perishables
• Personal Care
• Home Care
• Snacks & Treats
Present in > 22
African countries
Founded in 1921
16,800
employees
across Africa
KOO won
favourite brand
in SA in 2015
“LEADING MANUFACTURER
IN ALMOST EVERY CATEGORY IN WHICH WE PLAY”

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GROWTH THROUGH FOCUS
Portfolio complexity is often the root cause of symptoms faced by consumer goods companies
in developed markets
BRANDS
SKUs
SPECS
CHANGES
High Overheads
Low Speed
(decisions,
launches)
Low
Marketing
ROI
Poor in Store
Execution
Low Purchasing
Scale
Low Supply
Costs
High
Capex

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GROWTH THROUGH FOCUS
High speed
implement-
ation
High
marketing
ROI
High purchasing
scale
Competitive
supply chain
costs
Capex for
Growth
Perfect in
Store
execution
Optimum
overheads
GROWTH
THROUGH
FOCUSED
PORTFOLIO

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HALF THE JAMS SOLD IN THE MARKET*
WILL BE A TIGER BRANDS JAM
*Defined Market i.e. formal trade & wholesalers
“Tastes real good,
like good food
should”
Most valuable jam
brand in SA
Within top 5 jam
brands in SA
Discontinued
in 2015

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THE BURNING
QUESTIONS
 How do we drive growth in
a mature segment?
 What is the optimum
assortment for each of our
brands within the different
retailers?
 Can we launch new
products without one brand
cannibalizing the other?
 Which product attributes
(flavour, size, format etc.) do
our products need and which
do shoppers want?

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17% 12%
28%
51%
22% 29%
77%
79%
64%
48%
75% 66%
6% 9% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Spar PnP Checkers Shoprite Makro Total Mkt
Quality Grade Attribute Importance by Retailer: Latest Year
Economy Everyday Premium
THERE IS A CLEAR DISTINCTION IN THE TYPES OF JAMS THAT
DIFFERENT RETAILERS SELL
Source: IRI
Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5 Total Market
Brand + FlavourBalancedPrice + Size Dependant

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METHODOLOGY: HOW DO WE DO IT?
Sales Figures
+ Distribution Figures
Product Attributes
+ Store Level
+ Dynamic Product Mix
Importance per Attribute
+ Incremental Sales
Incremental
Volume
Transferable
volume
TRADITIONAL APPROACH COMPETITIVE EDGE
25%
75%
New Performing Approach

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ASSORTMENT OPTIMIZATION 2.0 TO SPOT
INCREMENTAL AND TRANSFERABLE SALES
25%
75%
Incremental Sales
Non transferable
(Drives market size)
Transferable
(Drives market share)
Gains from the
added item
(uniqueness)
Sales substitutable
with other
products
Total new item’s
sales

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ATTRIBUTE IMPORTANCE DIFFER BY RETAILER
22.0
16.9
15.5
14.4
14.1
9.7
7.4
Packtype
Flavour
Brand
PriceBin
Size
SKU‐Count
Consiste…
32.2
23.8
16.3
9.8
8.9
6.3
2.7
Lifestyle
Flavour
Brand
Size
PriceBin
Consist…
Packtype
25.5
21.8
19.3
15.2
12.2
3.2
2.9
Brand
Size
Flavour
PriceBin
Lifestyle
Consisten…
Packtype
28.6
19.9
18.2
15.7
9.6
4.9
3.1
Brand
Lifestyle
Flavour
PriceBin
Size
Packtype
Consist…
19.1
18.7
16.9
14.1
13.3
11.6
6.3
Size
Brand
Flavour
Lifestyle
Packty…
Consist…
PriceBin
Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5

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PLANETARY SYSTEM INDICATES UNIQUENESS AND
INTERCHANGEABILITY OF BRANDS
Uniqueness: Brand map
Product mapping is a visual representation of attribute interaction, where proximity of attribute values implies strong interaction. Bubble
sized by value share.
All_Gold
Spar_Brand
Rhodes
Hugo_S
KOO
Hazeldene Weigh_pm_Less
Thistlewood
Product Mapping by Brand
All_Gold Spar_Brand Rhodes Hugo_S KOO Hazeldene
Goldcrest St_Dalfour Weigh_pm_Less Hillcrest Hilton Thistlewood
Other_Brands Melissa_S Naturelite Dursots
Premium brands in this
retailer are highly
interchangeable
Mainstream brands are
quite unique
Brand 1 Brand 3
Brand 2
Brand 4
Brand 6
Brand 5
Brand 7
Brand 8
Brand 9
Brand 10 Brand 12
Brand 11

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All_Gold
Hugo_S
KOO
Product Mapping by Brand
Rite_Brand All_Gold Hugo_S Rhodes Sunshine Hazeldene
Pot__O_Gold KOO Danish_Choice Naturelite Other_Brands Dursots
Goldcrest Thistlewood Weigh_pm_Less Housebrand St_Dalfour Hillcrest
BRANDS INTERACT DIFFERENTLY IN DIFFERENT
RETAILERS
Uniqueness: Brand map
Product Mapping is a visual representation of attribute interaction, where proximity of attribute values implies strong interaction. Bubble
sized by value share.
Premium brands do not
play a major role in this
retailer
Brand 1
Brand 4
Brand 2
Brand 3
Brand 5
Brand 6
Brand 7
Brand 8
Brand 9
Brand 10
Brand 11
Brand 12
Brand 13
Brand 14
Brand 15

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THE BURNING
QUESTIONS
 How do we drive growth in
a mature segment?
 What is the optimum
assortment for each of our
brands within the different
retailers?
 Can we launch new
products without one brand
cannibalizing the other?
 Which product attributes
(flavour, size, format etc.) do
our products need and which
do shoppers want?

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RESULTS
Reducing the products by 37% will
drive 1.1% ($270k) value growth for the
retailers and 3.4% ($440k) value
growth for Tiger Brands
New launch has the potential to drive additional
revenue of approx. $600K across markets
Additional benefits:
 De-cluttered range
 Less complicated merchandising
 More efficient distribution & supply chain
ROI x 12
NEW

24. HOW TO WIN

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FOCUS ON WHAT MATTERS
Traditional view:
Focus on the shelf
Assortment optimisation 2.0:
Starts with the shopper
 Sales rotation only
 Product isolation view
 Look at the at the category as a
dynamic product mix
 Use the incrementality
Use the incrementality from attributes’ attractiveness

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ASSORTMENT OPTIMIZATION 2.0 FOCUSES THE
DRIVERS OF THE PURCHASE DECISION
SHOPPER CHOICE
Packaging
Brand
Category
Ingredient
Flavor
Product
Form
Price
Value
Pack
Type
Marketing
Mix

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ASSORTMENT OPTIMIZATION 2.0 IDENTIFIES
ATTRIBUTE IMPORTANCE AND ATTRACTIVENESS
Brand:
Sub-category:
Pack type:
Pack size:
Sugar:
Red
Classic
Metal Can
330ml
12%
Each product has a set
of attributes (features):

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ASSORTMENT OPTIMIZATION 2.0 SIZE OF THE PRIZE
Category revenue % change between optimized scenario and actual revenue across different
regions/stores within each country
Category revenue gain with the optimized scenario versus actual revenue
0
2
4
6
8
10
12
14
16
Netherlands - Hot Sauces France - Frozen Fish Spain - Margarines
Non Optimized Store Group 1 - Optimized Store Group 2 - Optimized
+1.2
+4.2 +4.6
+14.2
+9.5
+2.3

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Copyright © 2016 Information Resources, Inc. (IRI). Confidential and Proprietary.
IN OUR INCREASINGLY COMPLEX WORLD,
COMPANIES NEED SIMPLICITY AND SCALABILITY TO
TURN OCEANS OF DATA INTO ACTION AND GROWTH
The Market
Is Changing
Every Day
No 2 Countries
Are The Same
Data Is Now
Disparate
Win Local,
Track Global

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THE TRADITIONAL MARKET READING MODEL IS NOT
ADAPTED TO THE BIG DATA ERA
THE TRADITIONAL MODEL TRANSLATES PRODUCT CATEGORIES
INTO RIGID HIERARCHIES
Hair Shampoos Hair Conditioners Hair Colorants
Hierarchy 1 Hierarchy 2 Hierarchy 3

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SO, MR. RETAILER
MRS. MANUFACTURER
IN THE FUTURE…
WHAT WILL YOU NEED
TO GROW?

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1. BREAK SKUS INTO ATTRIBUTES = THE END OF
RIGID HIERACHIES
Move from rigid hierarchies to multidimensional analysis
of all consumer – product data

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1. BREAK SKUS INTO ATTRIBUTES = THE END OF
RIGID HIERACHIES
Move from rigid hierarchies to multidimensional analysis
of all consumer – product data

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34
1. BREAK SKUS INTO ATTRIBUTES = THE END OF
RIGID HIERACHIES
Move from rigid hierarchies to multidimensional analysis
of all consumer – product data

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35
2. HAVE A 360O VIEW OF CONSUMERS / SHOPPERS
AND YOURSELF
Liquid DataTM
Technology Platform
Data integrated and aligned across
multiple dimensions of brand,
customer, segment, geography,
channel, store and time.
You need to have a super powerful IT platform

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3. MAKE IT EASY
SIMPLE VISUALISATION
, MAKE IT FAST

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3. MAKE IT EASY
SIMPLE VISUALISATION
, MAKE IT FAST
15.000 USERS
GLOBALLY
1MILLION
QUERY A MONTH
EXECUTED
95%
OF WHICH ANSWERED
IN LESS THAN
10 SECONDS
“ON THE FLY“

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THE FUTURE IS NOW

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WHAT YOU WILL NEED TO GROW…AND WIN
Observe
& Understand Reality
• Analytics on Oceans of Data
• Analytics on Attributes
2 Make Sense of It
Super Powerful
Integration Platform
3 Be Able to Act Fast “On the Fly”
1

40. Thank you!
Find out more at iriworldwide.com