U.S.

Retailing & Consumer Trends
Jeff Gregori The Nielsen Company October 23rd, 2008

Confidential & Proprietary • Copyright © 2008 The Nielsen Company

Agenda
• Economic Outlook
• U.S. Retail Trends

• Key Consumer Trends
 Health & Wellness

• Key Insights & Recommendations

U.S. Retailing & Consumer Trends

December 19, 2012

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Confidential & Proprietary Copyright © 2008 The Nielsen Company

Overall Cost of Living Rising Sharply
Consumers Can Not Keep Up With Necessities
12 Month Percentage Increase, Selected Items (March 2007 vs. March 2008)

48% 35% 27% 16% Fuel Oil Gasoline
Gallon Gallon

13% Milk
half gallon

10%

7%

3% Wages - 8% Housing

Eggs
dozen

Bread
pound

Chicken Ground pound Beef
pound

Source: U.S. Department of Labor Statistics (Consumer Price Index; U.S. City Average); USDA, NAR, BLS

U.S. Retailing & Consumer Trends

December 19, 2012

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Confidential & Proprietary Copyright © 2008 The Nielsen Company

Consumers Combining Trips, Eating Out Less, Staying Home, Cutting Spending @ Alarming Levels!
78% combining shopping trips & errands (+ 10 pts from YAGO), 52% eating out less (+ 14 pts), 51% staying home more often (+ 12 pts) & 63% of U.S. consumers are reducing spending (+ 18 pts)!

Saving Money in What & How they Buy & Where They Shop
Impact higher gas prices had on driving & spending habits? Check all Buy less expensive grocery brands
Use more coupons

Jun/Jul ‗05 17%
20%

Jun/Jul ‗06 22%
24%

Jun ‗07 19%
21%

Jun ‗08 35%
32%

Shop more @ Supercenters
Buy Larger, Economy Size
Nielsen Homescan Gas Impact Study

22%
10%

26%
11%

23%
10%

28%
16%

U.S. Retailing & Consumer Trends

December 19, 2012

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Confidential & Proprietary Copyright © 2008 The Nielsen Company

So, Tough Times for Growth & How Important Are Value, Variety & Convenience to You?

• How are you equipped to compete against Value, Variety or Convenience? • Are you providing Value, Variety & Convenient solutions to category consumers & retail shoppers? • An integral part of these themes is innovation

U.S. Retailing & Consumer Trends

December 19, 2012

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Confidential & Proprietary Copyright © 2008 The Nielsen Company

Retailing Trends U.U.S. 2012 Page 6 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S. Retailing & Consumer Trends December 19.

S.178 13.624 U.516 145. services of The Nielsen Company 907 1.151 19.660 37. Store counts Warehouse Clubs Supercenters Dollar Stores Mass Merch Supermarkets Drug Convenience Source: Trade Dimensions® & TDLinx®.399 2001 Mid-2008 Supermarkets have not grown at the rate of other retail channels – no wonder the channel has lost shopping trips! 124.584 30.027 39.167 1.S.421 6.583 3.Value & Convenience Winning As Evidenced By Increased Store Count U. 2012 Page 7 Confidential & Proprietary Copyright © 2008 The Nielsen Company .682 32.805 6. Retailing & Consumer Trends December 19.

S. 2012 Page 8 Confidential & Proprietary Copyright © 2008 The Nielsen Company .Shopping Behavior Trends • Retailers can grow their sales by: – Increasing their shopper base – Driving shopping frequency – Building baskets • Leveraging categories & brands that impact one or more of these components • Driving ―need state‖ trip opportunities – Health & wellness – Meal occasions – Large versus small trips – Time-starved consumers Source: Homescan®. Retailing & Consumer Trends December 19. a service of The Nielsen Company U.

8 45 41 50 51 51 59 68 64 81 81 86 2001 Mid-2008 Benefits from new store openings 95 100 99 *Includes Kmart.Value Winning As Evidenced By Consumer Acceptance % US household penetration Military Conv/Gas Warehouse Supercenters* Dollar Drug Mass Merch Grocery Source: Homescan®. Retailing & Consumer Trends December 19.S.6 3. a service of The Nielsen Company ** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables 3. 2012 Page 9 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Target & Wal-Mart Supercenters U.

2012 Page 10 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S. Retailing & Consumer Trends December 19. a service of The Nielsen Company ** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables 20 10 11 11 13 15 14 15 14 15 20 24 -17% 2001 Mid-2008 Grocery & Mass trips continue to drop 24 26 59 72 -18% *Includes Kmart.Value Channels Grabbing Trips Trips per household Military Warehouse Dollar Conv/Gas Drug Mass Merch Supercenters* Grocery Source: Homescan®. Target & Wal-Mart Supercenters U.

a service of The Nielsen Company ** Note: Conv/Gas channel behaviors understated because of the high level of gasoline only buys & purchases of immediate consumables $59 $63 $11 ** $14 $10 $19 $19 $23 $32 $40 $39 $49 $51 $64 $82 One Stop Shopping A Key Strength For Military 2001 Mid-2008 $98 *Includes Kmart. 2012 Page 11 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Target & Wal-Mart Supercenters **Source: Progressive Grocer U.Value Retailing Driving Price Compression Average $ basket ring—total expenditures Military Dollar Conv/Gas Drug Grocery Mass Merch Supercenters* Warehouse Source: Homescan®. Retailing & Consumer Trends December 19.S.

2012 Page 12 Confidential & Proprietary Copyright © 2008 The Nielsen Company .Military Channel mostly competing for Larger Stock Up Trips (>$64) very similar to Club % of channel dollars by trip type Military $ Stores C-Stores Drug Grocery Mass Merch Supercenters Warehouse Clubs 22 14 7 16 Immediate Total US—Nielsen Homescan—52 weeks ending 7/1/2006 12 18 73 55 51 32 28 24 30 29 41 18 23 24 10 13 26 28 32 47 Routine Stock-up Immediate = <$31 Fill In = >$31 <= $64 Routine = $64 .S.$125 Stock Up = >$125 6 3 11 11 12 23 30 30 Fill In U. Retailing & Consumer Trends December 19.

a service of The Nielsen Company―Total US—52 weeks ending 6/28/2008 U.Next to Club.S.$29.$99. 2012 Page 13 Confidential & Proprietary Copyright © 2008 The Nielsen Company .H hl G ro D ol M % U .$69.9k $30 .9k < $20k D ru Su g pe rc en te r .9k $20 .$49. no channel appeals more to higher income households than the Military Channel % sales from all shoppers 100 80 60 40 20 0 $100k + $70 .S Source: Homescan®.9k $50 . Retailing & Consumer Trends M ilit ar What can the Military Channel learn from Club retailers? ds b la r ce ry C lu as s y December 19.9k $40 .$39.

Retailing & Consumer Trends Confidential & Proprietary Copyright © 2008 The Nielsen Company December 19.Value channel (Dollar. 2012 Page 14 .By Income Group Dollar Stores Total Mass Grocery Club Drug 20 10 Flat 0 -10 Low Income Mid-Income High Income Source: MY 2008 Vs.9K. Mid Income $20K-$99. High Income >$100K U.S. Mass & Club) growth coming from ALL income segments! $ % Chg V. MY 2007 Account Shopper Profiler Low Income = < $20K. Year Ago .

9K. Retailing & Consumer Trends December 19.S.Low income households unlikely to trade up. 2012 Page 15 Confidential & Proprietary Copyright © 2008 The Nielsen Company . High Income >$100K U. Mid Income $20K-$99. but high income households will trade down Penetration By Income Group 11 Million HH‘s 84 87 78 78 63 65 47 40 75 50 30 79 81 83 68 46 41 33 Dollar Stores Wal-Mart Target Club Drug C-Stores Low Income Source: Mid-Year 2008 Homescan Mid-Income High Income Low Income = < $20K.

S.Dollar Stores Expanding Assortment U. 2012 Page 16 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.

Retailing & Consumer Trends December 19.S. 2012 Page 17 Confidential & Proprietary Copyright © 2008 The Nielsen Company .Retailers – How Are the Winners Winning? Convenient Shopping Solutions BAG & CHECKOUT AS YOU SHOP! ANTICIPATE SHOPPER NEEDS U.

Retailing & Consumer Trends December 19.com U.000-20.000 Square Feet of Selling Space – Half the Size of a Neighborhood Market This new banner allows Wal-Mart to attract upscale shoppers without the Wal-Mart name or the ―Big Box‖ image. Chandler – 838 W. 2012 Page 18 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Tempe • 15. Mesa – 910 E.Marketside – Wal-Mart’s Newest Banner • First 4 Locations Near Phoenix.S. Elliott Road. Baseline Road. Elliott Road.marketside. McQueen Road. Gilbert – 950 N. AZ – 7561 E. http://www.

Retailers Performing Well In Tough Economy • Costco July sales rose 14%. same-store up 10% • BJ‘s July same-store sales up 16.8% without • Family Dollar July sales rose 7. comp-store up 6.S.1%.5% increase in sales during fiscal 2nd qtr.5% • Kroger 1st qtr sales up 11.7%. same-store up 7% • Dollar Tree posted 12. same-store up 4. July sales up 10.2% with fuel & 5. same-store up 4. same-store up 4.1% • Wal-Mart 2nd qtr sales up 10.5%. Retailing & Consumer Trends = Stock-up & Save December 19. 2012 Page 19 Confidential & Proprietary Copyright © 2008 The Nielsen Company . identical supermarket sales up 9.6% • Walgreen Co.5% Consumer Motivation Source: Industry e-newsletters & company web sites U.7%.2%. excluding gasoline.

2%.S. July sales up 10.8% without • Family Dollar July sales rose 7.1% • Wal-Mart 2nd qtr sales up 10.1%. same-store up 7% • Dollar Tree posted 12. same-store up 10% • BJ‘s July same-store sales up 16. same-store up 4.5%.5% Consumer Motivation Source: Industry e-newsletters & company web sites U.7%. excluding gasoline. 2012 Page 20 Confidential & Proprietary Copyright © 2008 The Nielsen Company .2% with fuel & 5.6% • Walgreen Co. same-store up 4. Retailing & Consumer Trends = Value Seeking December 19. comp-store up 6.5% • Kroger 1st qtr sales up 11. identical supermarket sales up 9.5% increase in sales during fiscal 2nd qtr.7%. same-store up 4.Retailers Performing Well In Tough Economy • Costco July sales rose 14%.

Retailing & Consumer Trends = Value & Convenience December 19. July sales up 10.8% without • Family Dollar July sales rose 7. 2012 Page 21 Confidential & Proprietary Copyright © 2008 The Nielsen Company .5% Consumer Motivation Source: Industry e-newsletters & company web sites U.1%. same-store up 7% • Dollar Tree posted 12. comp-store up 6.5% • Kroger 1st qtr sales up 11.2%. excluding gasoline.7%. identical supermarket sales up 9.6% • Walgreen Co. same-store up 4.2% with fuel & 5.1% • Wal-Mart 2nd qtr sales up 10.7%. same-store up 4.S. same-store up 10% • BJ‘s July same-store sales up 16.5%.Retailers Performing Well In Tough Economy • Costco July sales rose 14%.5% increase in sales during fiscal 2nd qtr. same-store up 4.

same-store up 10% • BJ‘s July same-store sales up 16. same-store up 7% • Dollar Tree posted 12.8% without • Family Dollar July sales rose 7. same-store up 4. Retailing & Consumer Trends = Value & 1-Stop Shop December 19. identical supermarket sales up 9.7%.6% • Walgreen Co. 2012 Page 22 Confidential & Proprietary Copyright © 2008 The Nielsen Company . same-store up 4.1% • Wal-Mart 2nd qtr sales up 10.1%.5% increase in sales during fiscal 2nd qtr.5% • Kroger 1st qtr sales up 11. same-store up 4.2% with fuel & 5. July sales up 10. comp-store up 6. excluding gasoline.5%.5% Consumer Motivation Source: Industry e-newsletters & company web sites U.Retailers Performing Well In Tough Economy • Costco July sales rose 14%.7%.S.2%.

S. 2012 Page 23 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.Key Consumer Trends U.

S.Short & Long-term Growth Can Be Accomplished With Consumer Focus Health & Wellness opportunities are here to stay • Make them key component of messaging and/or understand how to take advantage of indulgent consumers • Improve reaction time to new diets & eating trends • In-store health clinics growing – Wal-Mart to add 400 by 2010 Grains Veggies Fruits Oils Dairy Meat/Beans U. 2012 Page 24 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.

Year Ago Health & Wellness Claim Natural Low Fat Absence of Specific Fat (Trans Fat or Saturated Fat) 52-Week Dollar Sales $21.Many Health & Wellness Claims Show Strong Growth vs.5 Billion $4.0 Billion $8.8 Billion $5.8% Reduced Calories Cholesterol Free Fat Free Reduced Fat No Calories Caffeine Free Organic Multi-Grain Antioxidants Good Source of Fiber Source: Nielsen LabelTrends.5 Billion $5.5% +16.1 Billion $1.6% +15.7% +8. 2012 Page 25 Confidential & Proprietary Copyright © 2008 The Nielsen Company .9 Billion $1.9 Billion $13.6% +5.S.2% +22. Retailing & Consumer Trends December 19.6% -2. Total U. FDMxWM.5% +9.2% +9.4% +3.8 Billion $14. 52 Weeks Ending 9/6/08 U.9% +30.3 Billion $10.6% -0.S.6 Billion Chg Vs Year Ago +11.3 Billion $11.6 Billion $10.7 Billion $2.8% +1.

4 Yrs.3 Billion 6% 37% $21. Retailing & Consumer Trends December 19.S.Organics Have Grown Considerably Over 4 Years. 2012 Page 26 Confidential & Proprietary Copyright © 2008 The Nielsen Company .7 Billion Organic Preservative Presence 23% 19% $13. Ago % Chg. YA Calorie Presence Natural 52 Week Sales Fat Presence 32% $46.6 Billion 24% $17.8 Billion 12% Source: Nielsen Strategic Planner. 52 Weeks Ending 8/9/08 U.5 Billion 15% 143% $4.9 Billion 12% 6% % Chg. but Sales Volume Small Compared to Other H&W Trends Fiber Presence 73% $3.

2012 Page 27 Confidential & Proprietary Copyright © 2008 The Nielsen Company 10 En /09 4 W d 0 / 04 k 1 En /01 4 W d 0 /05 k 3 En /26 4 W d 0 / 05 k 6 En /18 4 W d 0 / 05 k 9 En /10 4 W d 1 / 05 k 2 En /03 4 W d 0 / 05 k 2 En /25 4 W d 0 / 06 k 5 En /20 4 /0 W d0 6 8/ k 12 En 4 /0 W d1 6 k 1/ En 04 4 /0 d W 01 6 k En /27 4 W d 0 / 07 k 4 En /21 4 W d 0 / 07 k 7 En /14 4 W d 1 / 07 k 0 En /06 4 W d 1 / 07 k 2 En /29 4 W d 0 / 07 k 3 En /22 4 W d 0 / 08 k 6 En /14 /0 d 09 8 /0 6/ 08 .S.0% 20. Retailing & Consumer Trends % Chg. $ Sales % Chg.0% 0.0% k Recent Weeks Show Less Aggressive Organic Growth U. Units Source: Nielsen Strategic Planner December 19.4 W k 4 W En d 10.0% 25.0% 35.0% 5.0% 30.0% 15.

5% +25% 0.1% +27% 0.3% +23% 1. 52 Weeks Ending 8/9/08 U.3% Source: Nielsen Strategic Planner. Retailing & Consumer Trends December 19. +26% 6. 2012 Page 28 Confidential & Proprietary Copyright © 2008 The Nielsen Company .1% +27% 0. Organic Shr.680 Million % Chg.S.In which aisles are Organic products most prevalent? UPC Fresh Produce & Dairy Department Fresh Produce (UPC-coded) Dairy Fresh Meat (UPC-coded) Dry Grocery Frozen Foods Deli (UPC-coded) Packaged Meat Alcoholic Beverages HBA Total Organics Organic Dollar Sales $869 Million $1.4% +32% 0.3% +20% 3.836 Million $339 Million $28 Million $37 Million $24 Million $41 Million $4.5% +23% 1. YA of Dept.9% +24% 1.475 Million $30 Million $1.1% +23% 1.

3% Nielsen tracks 76 categories with organic claim. 2012 Page 29 .4% 2.5% 2.0% 2.9% 2.6% 3.0% 4.3% 3.680 Million +23% 1.8% 2.Organics Comprise Less Than 1% Share for Most Categories Category Milk Fresh Produce (UPC-coded) Soft Drinks – Non Carb Yogurt Baby Food Eggs Dessert/Fruit/Toppings Froz Soup Dried Fruit Jams/Jellies/Spreads Tea Cereal Breakfast Foods Flour Canned Vegetables Organic Dollar Sales $1.2% Total Organics $4.1% 5.5% 6.3% 6. 52 Weeks Ending 8/9/08 Confidential & Proprietary Copyright © 2008 The Nielsen Company December 19.4% 4.018 Million $869 Million $67 Million $180 Million $167 Million $142 Million $40 Million $139 Million $34 Million $52 Million $70 Million $185 Million $56 Million $12 Million $72 Million Sales % Chg.1% 3. Retailing & Consumer Trends Source: Nielsen Strategic Planner.S.4% 2.YA +18% +26% +4% +21% +23% +29% +36% +17% +46% +45% +28% +12% +60% +37% +36% Organic Share of Category 7. U.

S. Retailing & Consumer Trends December 19.―Big Names‖ in Organics Some Manufacturers have created Organic Line Extensions Source: Nielsen Strategic Planner: FDM 52 Weeks Ending 1/27/2007 U. 2012 Page 30 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

―Big Names‖ in Organics Several Large Manufacturers Produce Organic Products Under a Different Brand Names U. 2012 Confidential Page 31 Source: Organic News & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.S.

S.Meet the Health &Wellness Segments: (% of U. 2012 Trends NMI Service Introduction Page 32 Confidential & Proprietary Copyright © 2008 The Nielsen Company . DRINK & BE MERRYS 25% WELL BEINGS Low belief in the value of healthy categories 19% FENCE SITTERS 19% MAGIC BULLETS 16% FOOD ACTIVES Dedicated to health through smart nutrition and weight management High belief in the value of supplements – less concern with food U.S. RetailingHealth & Wellness – Nielsen & & Consumer December 19. general population adults…) Least concerned & knowledgeable about health & healthy eating Driven to health by all means 17% EAT.

S.23% of Military Shoppers are Food Actives Shopper Index 93 117 98 % Shoppers 95 95 18 19 23 20 22 23 14 15 23 24 Well Beings Food Actives Magic Bullets Fence Sitters Eat Drink & Be Merry Total Military Shoppers Source: Homescan®. a service of The Nielsen Company Total Mkt Shoppers U. 2012 Page 33 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.

2012 Page 34 Confidential & Proprietary Copyright © 2008 The Nielsen Company .Military Shoppers most likely to be FOOD ACTIVES and EAT DRINK & BE MERRY type shoppers Dollar Spend Index v. Retailing & Consumer Trends December 19. Avg HH WELL BEINGS FOOD ACTIVES MAGIC BULLETS FENCE SITTERS EAT DRINK & BE MERRYS MILITARY Whole Foods 97 241 108 35 98 162 89 45 105 23 Wegmans Costco Sam‘s Club Safeway Grocery Corp Target Banner Wal-Mart Banner 134 111 88 106 105 84 127 111 117 93 101 93 71 117 118 105 92 94 88 81 85 106 100 110 88 82 91 94 103 115 Read as: Costco $ sales are 11% greater than industry among WELL BEINGS Source: Homescan®.S. a service of The Nielsen Company―Total US—52 week ending 09/06/2008 U.

2012 Page 35 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19. FOOD ACTIVES are driven by a desire for balance of exercise. FOOD ACTIVE 16% (% of population…) Branding Influences  Most likely to choose products for which they have a coupon  Lower than average levels of LOHAS environmental values Health & Wellness – Nielsen & NMI Service Introduction U.FOOD ACTIVES Health-Related  Eating healthy is vital. lowest use of alternative healthcare Dedicated to health through healthy eating. nutrition. avoiding negatives and adding those with nutritional benefits. and weight management. over three-fourths eat heart smart  Believe maintaining proper weight is key to healthful living  Low use of natural and organic food  Most apt to count calories and use artificial sweeteners instead of sugar  Highest use of prescription drugs.S.

Avg HH WELL BEINGS FOOD ACTIVES MAGIC BULLETS FENCE SITTERS EAT DRINK & BE MERRYS Yeast Flour Fresh Produce 159 130 120 129 100 111 69 108 108 155 91 91 27 78 77 Yogurt 119 112 111 84 80 Wine Beer 129 91 125 95 113 90 78 107 66 114 Read as: Flour $ sales are 30% greater than average HH among WELL BEINGS Source: Homescan®. 2012 Page 36 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19. a service of The Nielsen Company―Total US—52 week ending 09/06/2008 – upc-coded products U.S.Health & Wellness Segments Show Different Category Preferences Dollar Spend Index v.

2012 Page 37 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Retailing & Consumer Trends December 19.S.Summary & Closing Thoughts U.

Key Insights & Recommendations 1.8% (4. & convenience – BUT AT ACCELERATED LEVELS The Military Channel is more important than ever to its customers – More shoppers are taking advantage of the Military Channel as UPC product penetration has increased to 3. variety. Retailing & Consumer Trends December 19. Dollar & Club stores? U. shoppers of all economic means are seeking ―value‖ – Combining shopping trips – Eating more meals at home & doing more ―at-home‖ entertaining – Seeking the right mix of value.S.4 MM) but shopping frequency is has eroded – How aggressive are we advertising ―The Military Channel Value proposition‖ to shoppers versus Mass. More than ever. 2012 Page 38 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

Breakfast Foods & Canned Vegetables  Perimeter Areas – Milk. Fat and Calorie Presence Claims offer the Military Channel opportunity to build Health & Wellness equity with its customers more than Organics Potential Organic category entry points for the Military Channel includes:  Primarily Center Store .Non-Carb Soft Drinks.Key Insights & Recommendations 2. 2012 Page 39 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Eggs  Organic Frozen can be a differentiation point for Military versus competitive channels. but the Total Frzoen Dept is real strength at Military. o U. Yogurt. Soup. Preservatives. Retailing & Consumer Trends December 19.S. Cereal. The Military Channel Health & Wellness strategy should consider the following elements: – Key Assortment Drivers of Health & Wellness o Natural. Baby Food. Tea. Jams/Jellies. This sector is undeveloped for Organics. Dried Fruit.

The ―Food Actives‖ Shopper Segment is a significant opportunity for the Military channel to drive growth with Health & Wellness o A big target for Military as 23% are considered Food Actives (1MM+ Shoppers)  75% eat Heart Smart and Count Calories  Most likely to use Artificial Sweeteners instead of Sugar  Most likely to choose products for which they have a Coupon o While these shoppers already spend 8% more than the average shopper in Military. 2012 Page 40 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S.Key Insights & Recommendations 3. we need to define ourselves somewhere between Sams (117) & Wegmans (127) U. Retailing & Consumer Trends December 19.

Thank You! Mid-Year Update Confidential & Proprietary • Copyright © 2008 The Nielsen Company .

Appendix U. 2012 Page 42 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S. Retailing & Consumer Trends December 19.

RetailingHealth & Wellness – Nielsen & & Consumer December 19.Health & Wellness Segmentation Methodology U.S. 2012 Trends NMI Service Introduction Page 43 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

NMI developed a proprietary health and wellness segmentation of U. U. RetailingHealth & Wellness – Nielsen & & Consumer December 19. 2012 Trends NMI Service Introduction Page 44 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S. Based on more than 40 measures.NMI Health & Wellness Segmentation Methodology • NMI’s analysis of the U. the Health and Wellness segmentation has become a cornerstone of the Health & Wellness Trends Report (HWTR). population’s attitudes and behaviors regarding health and wellness has long indicated that there are clearly identifiable psychographic health and wellness segments. consumers. The five segments identified have been quite robust over time.S.S. • In 2001. displaying strong consistency from year to year.

The comprehensive statistical modeling process used to derive NMI’s health and wellness consumer segmentation is based on the following techniques and methodologies: • Exploratory and confirmatory factor analysis of nearly 200 measures of consumer attitudes and behaviors regarding health and wellness.S. and many other topics. supplements.NMI Health & Wellness Segmentation Methodology • The formal analytical model measures commonalities and differences between five distinct consumer groups using k-means cluster analysis. organic products. based on the following criteria: •Maximum differentiation between consumer groups •Maximum homogeneity within each consumer group U. 2012 Trends NMI Service Introduction Page 45 Confidential & Proprietary Copyright © 2008 The Nielsen Company . exercise. The analysis identified more than 25 potential factors • The identification of 31 measures from the factor analysis that best represented each of the potential factors identified and maintained consistency with the previous years’ segmentation solution • K-means cluster analysis which examined numerous potential solutions to determine which segmentation model provided the optimal solution. RetailingHealth & Wellness – Nielsen & & Consumer December 19.

2012 Trends NMI Service Introduction Page 46 Confidential & Proprietary Copyright © 2008 The Nielsen Company . and business development company specializing in the health. and the environmental and social responsibility of the planet. market research. wellness. RetailingHealth & Wellness – Nielsen & & Consumer December 19. U. NMI has focused on the well-being of people and products.NMI: Unparalleled Expertise in Health. Since 1990. and sustainability marketplace. Wellness & Sustainability NMI is an international strategic consulting. NMI owns the only H&W consumer database.S.

least knowledgeable about healthrelated benefits. nutritious food is important to a healthy lifestyle  Lowest monthly expenditure on healthy and natural products  Driven more by taste and to select emotional. DRINK & BE MERRYS 23% Health-Related  Least likely to agree that consumption of healthy. but don’t. 2012 Trends NMI Service Introduction Page 47 Confidential & Proprietary Copyright © 2008 The Nielsen Company . Know they should eat healthier.S. DRINK & BE MERRYS EAT. ―feel-good‖ products  Least likely to read labels (% of population…) Branding Influences  Most likely to choose store brand and buy on price  Least likely to associate personal values with brand choice Least concerned about health and healthy eating. U. Most focused on taste.EAT. RetailingHealth & Wellness – Nielsen & & Consumer December 19.

and other products. WELL BEING 25% (% of population…) Branding Influences  Least likely to base purchase decisions on price. with strong environmental linkage. fiber. concerned about brand image  Most likely to shop natural channel. Strong preference for concepts that are natural and organic. yet are the most successful at healthy eating  Choose natural/organic over conventional  Above average use of alternative healthcare Driven to health by all means. organic food/beverages  Spend significantly more on healthy and natural products  As challenged to eat right as other segments. supplements.S. including food. including Trader Joe's and Whole Foods Market  Early adopters and influencers  Purchase from companies that share their values U.WELL BEINGS Health-Related  High use of healthy food such as soy food/beverages. RetailingHealth & Wellness – Nielsen & & Consumer December 19. choose quality regardless of cost. 2012 Trends NMI Service Introduction Page 48 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

less concerned with brand image  After WELL BEINGS. VMHS. homeopathic remedies. Among the groups most actively managing weight. most likely to shop Trader Joe’s and Whole Foods Market  More likely to choose products for which they have a coupon U. and use of organic and natural food/ beverages  Highest use of functional/fortified food/beverages  Highest usage of weight loss food and artificial sweeteners  Highest use of OTC. alternative healthcare. and less concern with food. condition specific supplements. Healthy convenience resonates with this group. and some leanings toward natural and organic.S. high use of Rx MAGIC BULLETS 19% (% of population…) Branding Influences  Average brand loyalty. understanding. sensitive to environmental concerns.MAGIC BULLETS Health-Related  Above average interest in. RetailingHealth & Wellness – Nielsen & & Consumer December 19. 2012 Trends NMI Service Introduction High belief in and usage of supplements for health. Page 49 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

with a low belief in the value of healthy categories U. 2012 Trends NMI Service Introduction Page 50 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S.FENCE SITTERS FENCE SITTERS 17% Health-Related  Lower belief in the connection between diet and health  Less than average use of most healthy food categories  Less concerned about sugar. RetailingHealth & Wellness – Nielsen & & Consumer December 19. They are neutral on most health issues. and artificial sweeteners (% of population…) Branding Influences  Average brand loyalty  Concerned about brand image  More likely to buy on price  Less environmentally sensitive Primarily younger households with kids. high fructose corn syrup. who buy on price and are driven by the “family” diet.

RetailingHealth & Wellness – Nielsen & & Consumer December 19. a service of The Nielsen Company U. DRINK. & BE MERRYS™ FENCE SITTERS™ MAGIC BULLETS™ FOOD ACTIVES™ 19 Homescan H&W NMI H&WS % Population % Households Source: NMI 2007 H&W Consumer Trends Database™.S. Homescan®.Good Alignment Between NMI & Homescan – Consistent Segment Sizes 23 17 19 16 25 24 16 22 19 WELL BEINGS™ EAT. 2012 Trends NMI Service Introduction Page 51 Confidential & Proprietary Copyright © 2008 The Nielsen Company .

Who is the Military Shopper? Demographics of the average Military Shopper • • • • • • • • • • HHLD Income $40K+ Female Head Age 55+ Affluent Suburban Spreads Younger Bustling Families Empty Nest Couples Senior Couples Not In Work Force African American Asian Non-Caucasian Demographics of HEAVY Military Shopper • • • • • • • • • • • • • • HHLD Income $40K+ Female Head Age Under 35 Female Head Age 65+ 2 Member Household 3 – 4 Member Household 5+ member Household Affluent Suburban Spreads Younger Bustling Families Empty Nest Couples Senior Couples Not In Work Force African American Asian Non-Caucasian Your Most Important shoppers Heavy Shoppers represent approximately 82% of total military volume U. 2012 Page 52 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S. Retailing & Consumer Trends December 19.

$99k Female Head Age 65+ Modest Working Towns Senior Couples Not In Work Force African American Asian Non-Caucasian Light ―occasional‖ shoppers Light Shoppers represent approximately 18% of total military volume U. Retailing & Consumer Trends December 19. 2012 Page 53 Confidential & Proprietary Copyright © 2008 The Nielsen Company .S.Who is the Military Shopper? Demographics of the average Military Shopper • • • • • • • • • • HHLD Income $40K+ Female Head Age 55+ Affluent Suburban Spreads Younger Bustling Families Empty Nest Couples Senior Couples Not In Work Force African American Asian Non-Caucasian Demographics of LIGHT Military Shopper • • • • • • • • HHLD Income $50K .

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