Niq Global Intelligence Plc · NYSE:NIQ

Niq Global Intelligence — NielsenIQ — ENG Crisis Strategies Webinar (April 2022)

42 slides from Niq Global Intelligence's conference presentation, Apr 1, 2022

  1. Slide 1: Consumer VS Crisis: how are shopping strategies evolving?

    Consumer VS Crisis: how are shopping strategies evolving? Saltanat Nyssanova Marina Volkova Client Director, Analytics and Consulting NielsenIQ Russia Director, NielsenIQ Russia © 2022 Nielsen Consumer LLC. All Rights Reserved.

  2. Slide 2: Crisis background: what you need to know?

    Crisis background: what you need to know? © 2022 Nielsen Consumer LLC. All Rights Reserved.

  3. Slide 3: Previous crises were followed by periods of restorative growth

    Previous crises were followed by periods of restorative growth while current crisis is overlapped by the Covid-19 pandemic consequences Covid-19 pandemic and World Financial Crisis Anti-Russian Sanctions external factors 1 8 13.3 12.9 ХХ 1 3 11.4 8.8 8.8 8.4 6.1 6.6 6.5 5.4 8 4.3 4.9 2.5 3.0 5.6 4.5

  4. Slide 4: Existing threats have materialized, new issues appeared

    Existing threats have materialized, new issues appeared — resulting in the long-term effects on FMCG Geopolitical issues Logistical issues Inflation Shrinking income levels Labor market issues Changing consumer behavior 4 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  5. Slide 5: Consumer optimism decrease in response to crisis is usually delayed

    Consumer optimism decrease in response to crisis is usually delayed in time 200 points Anti-Russian Sanctions Covid-19 pandemic Crisis 2022 99 93 90 86 91 86 89 90 91 81 75 66 62 66 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2020 Q2 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 0 poin

  6. Slide 6: Majority of Russian consumers think that the country is in economic crisis

    Majority of Russian consumers think that the country is in economic crisis Yet, their number is smaller than during the previous crises Anti-Russian Sanctions Covid-19 pandemic Crisis 2022 84 84 88 89 83 80 75 74 73 75 76 70 70 Q4 2014 Q1 2015 Q3 2015 Q4 2015 Q4 2019 Q1 2020 Q2 2020 Q4 2020 Q1 2021

  7. Slide 7: Currency exchange rates influence how consumers perceive consequences of crisis

    Currency exchange rates influence how consumers perceive consequences of crisis What do you think the consequences of the currency exchange rates volatility will be? Worse living Worse economic Inflation «Everything is fine» conditions crisis December 2014 12% 13% 45% 11% December 2015 55% 42% 25% 2

  8. Slide 8: Saving strategies are similar among crises

    Saving strategies are similar among crises 2009 69% 61% 48% 41% 37% Out of home New clothes Upgrading Home Dining out Consumers in Russia have entertainment electronics improvements been tightening their belts for 2014 a few years now. As a results they try to find new and combine existing saving 48

  9. Slide 9: Average prices for staple groceries already demonstrated double-digit growth

    Three column Average numbered prices for staple grocerieslist already demonstrated double-digit growth in early 2022 Price growth pet l./kg., % 38% 36% 31% 26% 25% 24% 21% 17% 18% 14% 15% 14% 12% 13% 11% 10% 9% 8% 8% 8% 8% 6% 6% 6% 5%5% 4% 4% 5% 4%5% 3% 1% -3% -4% -3% Sugar Oils Buckwheat Flour Choc

  10. Slide 10: 98% of Russian consumers notice FMCG price growth

    98% of Russian consumers notice FMCG price growth Source: NielsenIQ Shopper Trends, December 2021 10 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  11. Slide 11: Over the past three years the number of consumers who know all prices tripled

    Over the past three years the number of consumer who know all the prices have tripled Price monitoring How well do you know the prices on FMCG you buy regularly? 4% 3% 3% 2% 9% I do not pay attention to prices 25% 29% 36% 37% 44% Do not remember all prices, but notice increases 48% 43% 73% I know pr

  12. Slide 12: Consumers exercise different saving strategies, often combining several

    Consumers exercise different saving strategies, but most often combine several of them in current realities Saving strategies How have your shopping patters changed in these categories? (%) Fresh fish and seafood 31 18 27 8 22 5 Fresh meat, poultry 35 22 26 9 24 4 Cheese 27 17 26 7 28 8 Fruits and v

  13. Slide 13: What about sales?

    What about sales? © 2021 2022Nielsen NielsenConsumer ConsumerLLC. LLC. All All Rights RightsReserved. Reserved.

  14. Slide 14: What is the difference between Covid-19 crisis and 2022 crisis?

    Two column What is numbered the difference list crisis and 2022 crisis? between Covid-19 Volume sales explosion of the 2022 crisis equals Covid-19 levels Weekly sales change during Covid-19 and now Volume sales change (items), 2020 = 8–16 weeks, 2022 = 4–11 weeks 24% 17% 14% 10% 8% 8% 8% 9% 6% 7% 5%

  15. Slide 15: Current sales peak caused by both familiar and new factors

    Current sales peak caused by both, already familiar and new factors Weekly sales change versus same week YA Food Non-Food Alcohol Tobacco During Covid-19: 53.0 09.03 - 15.03 36.1 16.03 - 22.03 31.2 29.2 30.6 31.6 25.5 24.5 23.03 - 29.03 18.0 22.1 21.1 20.8 23.8 20.7 14.1 14.3 15.2 15.9 30.03 - 05.04

  16. Slide 16: Current sales change by channel and how it differs from Covid-19

    Current sales change by channel — and how it is different from Covid-19 Volume sales change (items) 51% 54% 23% 17% 36% 34% 7% 6% 16% 5% 11% 3% 2% 6% 1% 1% 0% 1% -1% -2% -6% -5% -9% -8% Total Offline Discounters Hypermarkets Minimarkets Supermarkets E-com Average price per package change 74% 70% 67%

  17. Slide 17: E-commerce keeps getting more popular

    E-commerce keeps getting more popular Number of people who primarily do FMCG shopping online is still growing Primary shopping channel 4,5% 2019 51% 33% 13% 2020 44% 37% 17% share of FMCG e-commerce in Russia at the end of 2021 2021 34% 39% 25% Mostly buy FMCG offline Equally use both Mostly buy FMC

  18. Slide 18: Consumers compare prices in offline and online stores

    73% of consumers in Russia compare prices in offline and online stores 48% of consumers in Russia think they can find cheaper prices online Source: NielsenIQ Shopper Trends, 2021 18 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  19. Slide 19: Despite many similarities, latest crises are very different

    Despite many similarities, latest crises are very different Covid-19 pandemic Crisis 2022 Price sensitivity was less prominent, Price is the key factor of choice in light of Prices moreover, it almost ceased to play a role worsening economic conditions and need during the panic buying period to save

  20. Slide 20: How to interpret market signals?

    How to interpret market signals? © 2022 Nielsen Consumer LLC. All Rights Reserved.

  21. Slide 21: Regular sales drive FMCG market; majority of categories reduced discounts

    1 2 Regular sales drive FMCG market Majority of categories reduced discounts during the crisis 3 4 Promo and regular elasticities Sales unequally distributed through the city go down © 2022 Nielsen Consumer LLC. All Rights Reserved.

  22. Slide 22: Offline sales growth is primarily caused by regular sales

    Offline sales growth is primarily caused by regular sales Pantry stock up 76% — contribution of Anti-Russian sanctions 27 during COVID-19 sales without discounts 25 — 8 week (4 weeks of March 2020) 17 17 14 14 22 12 11 10 10 11 9 10 13 6 9 6 5 6 12 8 7 13 9 6 8 8 7 4 5 6 5 4 3 3 3 1 1 2 -1 2020 2021

  23. Slide 23: Regular sales grow across all channels except e-commerce

    Regular sales grow across all channels except e-commerce Value sales change by channel versus same period YA, % Discounters Hypermarkets Supermarkets Minimarkets E-commerce 86 83 76 40 65 30 31 28 28 16 26 27 25 48 15 14 13 18 27 11 23 21 49 48 53 8 27 7 6 13 8 9 9 1 6 2 0 6 6 2 5 -2 2 3 2 3 4 3 4 -

  24. Slide 24: Growth of regular sales pushes promoted sales down in offline channels

    Growth of regular sales pushes amount of promoted sales down in all offline channels Share of promoted sales in modern FMCG Discounters Hypermarkets Supermarkets Minimarkets E-commerce 35 31 36 42 43 44 40 46 50 48 48 51 51 52 52 52 66 74 79 86 65 69 64 58 57 56 60 54 50 52 52 49 49 48 48 48 34 26 2

  25. Slide 25: Discount size and share of promoted sales decrease during latest weeks

    Discount size and share of promoted sales decrease during the latest weeks Food Non-food 6 0.0 22.7 23.1 2 4.0 28.0 22.5 Discount, % 26.7 8 0.0 5 5.0 21.8 21.3 2 3.0 25.6 2 8.0 2 2.0 7 0.0 24.0 2 6.0 22.2 2 4.0 5 0.0 2 1.0 6 0.0 45.8 46.1 46.1 47.3 2 2.0 Share of promo, 4 5.0 42.2 2 0.0 5 0.0 43.7 4

  26. Slide 26: Discount size and share of promoted sales decrease during latest weeks

    Discount size and share of promoted sales decrease during the latest weeks Food Non-food 6 0.0 22.7 23.1 2 4.0 28.0 22.5 Discount, % 26.7 8 0.0 5 5.0 21.8 21.3 2 3.0 25.6 2 8.0 2 2.0 7 0.0 24.0 2 6.0 22.2 2 4.0 5 0.0 2 1.0 6 0.0 45.8 46.1 46.1 47.3 2 2.0 Share of promo, 4 5.0 42.2 2 0.0 5 0.0 43.7 4

  27. Slide 27: Price reductions decrease in majority of categories

    Price reductions decrease in majority of categories Category size (Rub.) Meat Beer Detergents Cheese Energy drinks 59% Noodles Toilet paper Coffee Smaller Bigger discount discount Salty Liquid soap snacks of categories reduced After shave Gum discounts by up to -5 p.p. Instant soups 13% Waffles Sani

  28. Slide 28: Price elasticity — demand response to price change

    Price elasticity — demand response to price change +1% Price increase -2.0 elasticity -2% unit sales change 100 units 98 units (befor price change) (after price change) High response to price Low response to price change <-1.5 change >-1.5 28 © 2022 Nielsen Consumer LLC. All Rights Reserved.

  29. Slide 29: Despite decrease of elasticities…

    Despite decrease of elasticities… Elasticity change, 2021 vs 2019 Promo Regular Vodka - 1.3 - 0.4 - 0.9 Beer - 0.2 - 0.6 - 0.4 Brandy - 0.6 - 0.1 Yoghurt drinkable - 0.4 - 0.2 Deodorants - 0.3 - 0.2 Yoghurt - 0.3 - 0.2 Juice - 0.3 - 0.2 Shampoo - 0.3 - 0.2 Tea (packs) - 0.1 - 0.5 - 0.0 Detergents -

  30. Slide 30: …promotion is still effective for these categories!

    …promotion is still effective for these categories! Elasticity change, 2021 vs 2019 Elasticity quadrant, 2021 Promo Regular 4.0 Vodka - 1.3 - 0.4 - 0.9 3.5 Beer - 0.2 Vodka - 0.6 - 0.4 Brandy Milk - 0.6 - 0.1 Beer 3.0 Yoghurt drinkable - 0.4 Tissues - 0.2 Deodorants Juice - 0.3 - 0.2 Regular Elastic

  31. Slide 31: Take into account elasticity of your category for pricing strategy

    For an effective pricing strategy, it is important to take into account the elasticity of your category and products 4.0 EDLP EDLP or HI-LOW 3.5 Growth through Depends on brand strategy and low regular prices spending structure Водка Молоко Beer 3.0 Tissues Juice Yoghurt 2.5 Drinkable yoghurt Brandy

  32. Slide 32: Elasticity decrease in high-inflation countries is a pattern

    Elasticity decrease in countries with high inflation rates is a pattern Turkey Argentina Russia Inflation Inflation Inflation 54% 51% 48% 36% 36% XX% 20% 26% 15% 8.4% 12% 12% 4.3% 4.9% 2.5% 3.0% 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2020 2021 2021* 2022* 202

  33. Slide 33: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 -11% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved.

  34. Slide 34: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved.

  35. Slide 35: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 4% -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved.

  36. Slide 36: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 4% 2% -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved.

  37. Slide 37: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 21% 4% 2% -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved.

  38. Slide 38: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 204% 21% 4% 2% -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Reserved

  39. Slide 39: Diapers sales in Moscow soared on week 9

    Diapers sales change (offline) volume change versus similar week YA -50% -30% -15% +0% +50% +100% +150% +200% Diapers sales in Moscow soared on week 9 204% 173% 21% 4% 2% -11% -8% 4 5 6 7 8 9 10 4 5 6 7 8 9 10 Week 2022 vs 2021 Source: NielsenIQ Nano-areas © 2022 Nielsen Consumer LLC. All Rights Res

  40. Slide 40: Key takeaways and recommendations

    76% is contribution of regular sales 72% of categories decreased discounts to total FMCG growth during the crisis Assess effectiveness of your regular Analyze discount sizes on your brands shelf prices -0.2 p.p. promo elasticities Sales unequally distributed -0.3 p.p. regular elasticities throughout

  41. Slide 41: How can NielsenIQ help your business?

    How can NielsenIQ help your business? NielsenIQ solutions were used in this presentation: § Weekly data § Promo analytics Hyperlocal analytics Shopper survey Total Store Read § Online promo Nano-Areas «Russian Consumer § Retail audit data analytics in the new economic Scantrack § Analysis of price D

  42. Slide 42: Consumer VS Crisis: how are shopping strategies evolving?

    Consumer VS Crisis: how are shopping strategies evolving? If you have questions or need additional information, please, reach out to you NielsenIQ contact or email us at nielseniqrussia.info@smb.nielseniq.com Follow our latest updates on Telegram: t.me/nielsenrussia © 2022 Nielsen Consumer LLC. All

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