Niq Global Intelligence Plc · NYSE:NIQ
Niq Global Intelligence — NielsenIQ — Category Management Webinar (November 2022)
30 slides from Niq Global Intelligence's conference presentation, November 2022
Slide 1: Make category management pivotal to your strategic growth in a consumer recession
Make category management pivotal to your strategic 5 growth in a consumer recession , WANN Wanna 3'¢ November 2022 B -iuiy) jus NielsenIQ
Slide 2: Meet today's presenters and speakers
NN Meet today's presenters and speakers.... Regan Leggett Agnes Szucs-Villanyi Simon Trott Foresight Lead - NIQ Advanced Analytics Leader, Advanced Analytics Leader, Eastern Europe Western Europe Declan Carolan Suzy Ford Gilles Ballot Co-chair of ECR Global Category Director of Merchandise, communit
Slide 3: What does the remainder of 2022 and beyond look like?
What does the remainder of 2022 > \ and beyond look ike 1, oe 3 NielsenIQ
Slide 4: Business and consumers are faced with unprecedented disruptive change
Business and consumers are faced with unprecedented disruptive change Supply chain delays Continued Rising raw & disruptions Worker Increased pandemic Ukraine crisis Soaring inflation material costs (China lockdown) shortages interest rates conditions \, g Qo ¥ P + tot ] | 2. «cll : © &£ $ Se Curren
Slide 5: Increasing grocery prices are noticed by majority
Increasing grocery prices are noticed by majority 63% 56% Dec 2021 June 2022 say normal weeklyshop costs more than it did six months ago Source: NielsenQ 2022 Consumer Outlook Survey, Dec 2021 vs June 2022 Q. Which of the following best describes your normal weekly grocery spend compared to 6 months
Slide 6: Recessionary times are already here for majority
Recessionary times are already here for majority Do you think your country is in a recession at the moment? % While the circumstances Q. Do you think your country is in a recession at the moment? Yes history shows just how high 66% 81% 95% 67% 42% 84% 88% 88% 53% 89% 33% 73% 36% 86% 37% 69% 33% H220
Slide 7: Future wallets will continue to be reshuffled with more cut backs
Future wallets will continue to be reshuffled with more cut backs than anticipated at the start of the year @home discretionary spend looks to be focus off future cut backs Spending intentions for next 12 months Nett change in spending Utilities Groceries Education - self / children's Childcare Tran
Slide 8: Consumer priorities have pivoted since COVID impacting purchase behavior
Consumer priorities have pivoted since COVID impacting purchase behavior What is more important in next 12 months? More likely to buy: Nett - more important minus less important Purchase preference change over the last 2 years (More - less likely to buy) s | y Mental wellness 1 ¢ Affordable / lower
Slide 9: It is not the 1st time for consumer recession
It is not the 15t time for consumer recession
Slide 10: Shoppers alter their behavior and scale back
Shoppers alter their behavior and scale back Dy ‘ Lifestyle changes >) Grocery savings tactics m Eat out less m Minimize waste m Spend less m Plan more m Frequency changes m Buy in bulk m™ Buy on promotion m Switch brands and opt for Private Labels m Stop buying from certain categories m Shop across
Slide 11: Retailers are working to answer the new shopper behaviors
As a result, retailers are working to answer the new shopper behaviors Carrefour in France is freezing prices for Although Christmas is traditionally The fight over shopper wallet is driving the 100 days on 100 everyday products from perceived a “brand season”, Edeka in retailers to use “gloves off’
Slide 12: Manufacturers stop the supply to retailers in a dispute over pricing
Manufacturers stop the supply to retailers in a dispute over pricing Heinz stops supplying Tesco, UK: Mars has stopped supplying Edeka and Rewe, biggest retailers “The firm always looked at how it could "provide value through in Germany in a fight over higher prices. Experts discuss the price, size
Slide 13: Changing shopper behavior creates challenges for business
Changing shopper behavior creates challenges for business € os . Lower sales Whether shoppers move for PL or choose to indulge less frequently — the sales are going down Obsolete assortment Some of the items becomeirrelevant to the shoppers in the current realities Inefficient production With lower
Slide 14: You can do nothing, or you can do something
66 You can do nothing, or you can do something 14
Slide 15: Category management provides the building blocks for success
Category management provides the building blocks for the success v¥+%+®)X ii = ¥ Data — tools & Process Partnerships Shopper focus Success insights Category managementis a joint trade business process between retailers and manufacturers of managing categories as strategic business units, producing e
Slide 16: The four levers of category management
The four levers of category management 16
Slide 17: Portfolio optimization can drive better results
Portfolio optimization can drive better results July 2020: Mondelez plans to eliminate 25% of its SKUs to boost supply chain efficiency, meet retail demand for cleaner shelf presence and provide more space for better-selling products, said CEO Dirk Van de Put. Streamlining SKU distribution during th
Slide 18: But it can also backfire if not done properly
But it can also backfire if not done properly After alienating customers by culling too many products from shelves, Wal-Mart is bringing the variety back by adding 8,500 items to stores. Flags will appear next to the revived brands later this month that say, "It's back." "We're bringing back product
Slide 19: More SKUs do not necessarily bring more sales
More SKUs do not necessarily bring more sales Portfolio optimization can drive better results Chilled vegetables Assortment change (%) Value growth, % urce: NielsenIQ RMS Scantrack data Greece, 67 food categories 19
Slide 20: But this realization does not have to be post factum
But this realization does not have to be post factum — Portfolio optimization can drive better results Drinks: Category analysis, Spain, Feb 2022 AGUAS ‘CERVEZA @ BEBIDAS REFRESCANTES vinos. ESPUMOSOS BEBIDAS ALCOHOLICAS Store-Week ROS Incrementality © 2022 Nielsen Consumer LLC. All Rights Reserved,
Slide 21: But this realization does not have to be post factum
But this realization does not have to be post factum Portfolio optimization can drive better results Drinks: Category analysis, Spain, Feb 2022 a Evolution of # of SKUs LL] +4,0% Sales Alco drinks Beer Water Sparklings Soft drinks Juices Wines Sales (obsolute) (optimal) 21
Slide 22: Deodorants category in hypermarkets
Deodorants category in hypermarkets Maintain 28 SKUs Push 6 SKUs Remove 17 SKUs Decreased number of SKUs by 10,3% » » Supplier value sales: Category value sales: Supplier value sales: Category value sales: +7% +9% +11,5% +11,4% ll 22
Slide 23: Tremendous pressure post covid
Tremendous pressure post covid Sales decline in double digits New launches putting pressure on shelf space Wide brand portfolio with a long tail; Saturated category with low incremental sales Current # of S y current sales. BER OF ITEMS Assortment analysis showed an opportunity to reduce assortment
Slide 24: Stretch the s-curve
Stretch the s-curve % Cumulated value sales ar Value price Number of SKUs. Product duplications. Price point relevance comparedto competitors. Market share within each price point. 80 Price index 120 Adapting the product range based on target shopper profile. Centric Category Management Workshop for
Slide 25: Things to remember when optimizing assortment
Things to remember when optimizing assortment = Know the current situation: ]. Analyze shopper needs 2. Understand what products cover the same needs without bringing unique benefits 3. Understand assortment potential: what happens to the sales if we add an SKU? = When optimizing: ].. Know who buys
Slide 26: Innovation must be relevant to the consumer
Innovation must be relevant to the consumer Beyond saving... Attributes that today's consumer is looking for + ¢ & » Health & Hygiene = Sustainability Origin Practicality Fresh products +27 Sustainability +26 Local origin +21 Improve +10 manufacturers consumption at home Health and +16 Social +16 Pr
Slide 27: In extraordinary times, exceptional decisions must be made
66 In extraordinary times, exceptional decisions must be made 27
Slide 28: Expect the unexpected
Expect the unexpected 1. Inflationis considered as a total basket, the most inflationary categories will not be the only ones to see their volumes decline 2. Know the profile of consumers of your categories and your brands: the categories typified consumers, modest, family and weakened by the last 2
Slide 29: Meet the expert panel
NN Meet the expert panel... Declan Carolan Suzy Ford Co-chair of ECR Global Category community Management Lead, Unilever © 2022 Nielsen Consumer LLC. Al Rights Reserved Gilles Ballot Director of Merchandise, Carrefour 29
Slide 30: Thank you
THANKYOU nielsenig.com/global/en/landing-page/advanced-analytics/ Stay ahead by staying connected inj] ¥] fo About NielseniQ Arthur C. Nielsen, who founded Nielsen in 1923, is the original name in consumer intelligence. After decades of helping companies look tothe future, we are setting the foundat
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