NIQ Global Intelligence plc · NYSE:NIQ
NIQ Global Intelligence — NielsenIQ — NielsenIQ and POI Webinar (2022)
19 slides from NIQ Global Intelligence's conference presentation, 2022
Slide 1: The Year of Price and Inflation: A Risk and Opportunity
The Year of Price and Inflation: A Risk and Opportunity 1 © 2022 2021 Nielsen Nielsen Consumer ConsumerLLC. LLC.All All Rights Rights Reserved. Reserved.
Slide 2: The complete view from NielsenIQ
The complete view from NielsenIQ 2 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 3: Inflation drivers are always complex and map to longer-term shifts
Inflation drivers are always complex and map to longer-term shifts Market pressures Rising costs of shipping Rising costs of raw ingredients Rising costs of labor Rising delivery volumes Underlying factors Shipping Extreme weather Reverse migration Added cross border More labor Increased demand Labo
Slide 4: But inflation is affecting each market differently
But inflation is affecting each market differently Global FMCG inflation reaching a double-digit increase in the latest quarter at +11.2% vs. Year Ago %Weighted price growth vs. Year Ago 12.2 United States 28.8 Ukraine 12.1 Mexico 14.2 Poland 16.8 Brazil 11.0 Czech 67.1 Argentina 24.9 Russia 17.1 Ch
Slide 5: Price elasticity evolution varies by country
Price elasticity evolution varies by country World | Regular Price Elasticity % Change vs EQ % price change YA by country | Aug 2022 15% Low price Belgium High price Regular Price Elasticity % Change increase increase 10% Elasticity France Elasticity increases increases 5% Germany 0% Canada Brazil I
Slide 6: Complexity also through various category trends
Complexity also through various category trends Europe | EQ Change % vs EQ % price change YA | Aug 2022 4% Non-alcoholic bev. Low price High price increase increase 2% Volume Volume increases increases Health & 0% Beauty EQ % Change Confectionary & Food perishable Snacks -2% Alcoholic FMCG Food ambi
Slide 7: Every item in the category has a different elasticity
Every item in the category has a different elasticity Specific pricing strategies, especially on key anchor items, are critical to mitigate volume risk BE Beer | Range of regular price elasticity per items Average category Regular Price elasticity Only 16% of Products share the average elasticity of
Slide 8: Inflation reshuffles price elasticity decomposition, reinforcing price comparisons
Inflation reshuffles price elasticity decomposition, generally reinforcing the weight of price comparisons When everyone is taking price, own price elasticity is primarily used to estimate the impact of price increases Regular Price Elasticity Decomposition by country – Total FMCG External Internal
Slide 9: Consumers could feel a higher impact of inflation in the next months
Consumers could feel a higher impact of inflation in the next months As producers are yet to pass on the full impact of price increases Producer price index vs consumer price index Change from July‘21 to July‘22 40 35 30 25 20 15 10 5 0 Producer price index Consumer price index Source: NielsenIQ Glo
Slide 10: Current crisis thus putting profit pool under a strong pressure
Current crisis thus putting profit pool under a strong pressure Retail Shelf Price Net Price Cost of Manufacturer Retailer Price Inflation goods Margin Margin War Profit Pool 10 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 11: It's a game of price and value for brands
It’s a game of price and value for brands… Latest data from NielsenIQ Barometer shows the merging relationship between Price and Value 90% 80% France ; 75% Germany ; 77% UK ; 80% India ; 75% South Africa; 75% Poland; 77% Chile; 72% 68% of consumers across all 12 70% USA; 70% South Africa; 71% Brazil
Slide 12: Companies that invest during tough economic times grow market share
“Companies that invest during tough economic times are the ones that grow their market share 12 © 2021 Nielsen Consumer LLC. All Rights Reserved.
Slide 13: Building for the future
Building for the future 13 © 2022 Nielsen Consumer LLC. All Rights Reserved.
Slide 14: Coping strategies – shopper perspective
Coping strategies – shopper perspective Implication: Requirement to set your strategies using pricing analytics that will reflect recent shifting purchase patterns Premium Seeking Economy Seeking ▪ Shoppers Double-Down on Same ▪ Shoppers Limit Frequency of Purchase Purchases Patterns Expect shoppers
Slide 15: Coping strategies – retailer perspective
Coping strategies – retailer perspective Side with shoppers Compete in price battle Reset vendor partnerships Absorbing price increases Shifting to EDLP price Actively delisting products includes accepting lower matching strategy on key ‘where price increases are not margins in the short term items
Slide 16: Coping strategies – manufacturer perspective
Coping strategies – manufacturer perspective Foundational Strategic ▪ Cost Plus / Margin ▪ Competition ▪ Customer ▪ Consumer Value Set price based on Set price based on price Set price based on retailer Set price based on profit margin targets index to competition margins and profit pool consumer va
Slide 17: Coping strategies – manufacturer perspective
Coping strategies – manufacturer perspective Pricing Team Negotiation Team Sustain Team Set the Price & Get the Price Negotiate and defend Scale out RGM analytics Set optimal price targets and 'war- Sell-in price increases, innovation plan, Deploy data and analytic game' price up execution strategy
Slide 18: Abraham Neme
Abraham focuses on Insights, Market Analytics, AI implementations. Prior to BSI, Abraham worked at Coty, RB and Colgate-Palmolive in various insight and data analytics roles. He has over 20 years of experience in the AlBev, beauty, and fast-moving consumer goods industries. Abraham Neme Global Head
Slide 19: Scan the QR to access more insights into building a growth mindset
Scan the QR to access more insights into building a growth mindset About NielsenIQ Arthur C. Nielsen, who founded Nielsen in 1923, is the original name in consumer intelligence. After decades of helping companies look to the future, we are setting the foundation for our future by becoming NielsenIQ.