‘FISHING FOR INSIGHTS & OPPORTUNITIES IN COVID INFESTED WATERS’ Seafood Trends in COVID Times Melanie Norris & Neil Moody 19 October 2020
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Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.
AGENDA
THE BIGGER PICTURE
THE SEAFOOD LANDSCAPE
WHAT’S NEXT
COVID Impacts on retail & consumers
Understanding the trends & why it matters
Identifying opportunities & managing risk
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THE BIGGER PICTURE MACRO ENVIRONMENT
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STRONG VALUE GROWTH
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Strong value growth continues after panic buying period | fresh seafood following grocery trend TOTAL GROCERY & FRESH SEAFOOD Value Growth vs YA 35.0
First wave of panic buying/pantry stocking
30.0 25.0
First confirmed COVID-19 in Australia
20.0 15.0 10.0 5.0 0.0 -5.0
4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 4W/E 08/09/19 06/10/19 03/11/19 01/12/19 29/12/19 26/01/20 23/02/20 22/03/20 19/04/20 17/05/20 14/06/20 12/07/20 09/08/20 Total Grocery
Source: Nielsen Homescan
Fresh Seafood
4
CHANNEL SWITCHING Big shifts to in-home eating as restaurants shut and many work from home CHANNEL SWITCHING - DOLLAR % CHANGE VS PRIOR PERIOD
REASONS FOR PURCHASING FOOD DELIVERY
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58% 47%
34%
85%
25%
21%
53% Convenience of Home Delivery
14%
Give myself a day off cooking
To eat something different from usual
Help Local Business
To celebrate event/special occasion
REASONS FOR PURCHASING MEAL KIT
52%
50%
-73%
Grocery
Meal Kits
Food Delivery (Uber Eats / Deliveroo, etc)
Restaurants
19%
Convenience of getting everything delivered at home
To try new recipes / eat something different
Source: Nielsen Homescan + Uno Group. Homescan data 11 weeks to 16.5.20 vs PP. Uno Group 11 weeks to to 24.5.20 vs PP
To avoid crowds at supermarkets
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ONSET THRESHOLD PATTERNS
2
ADJUSTED LIVING RESPONSES
COVID-19: 1-3 months
• Rise of Local • Technology Catalysts
EMERGING FROM RESTRICTIONS TO PRECAUTIONS
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• Quality & Efficacy
IMPLICATIONS
ALTERED CONSUMPTION DYNAMICS • Wallet Adjustments • Rebalanced FMCG • Reassessed Pricing • Reprioritised Values • Origin Preference
• Retuned Brand Affinity
FUTURE CONSEQUENCES Post COVID-19: years ►►►
Amidst COVID-19: 3-12 months
►►►
CONSUMPTION ACCELERATORS
3
►►► LONG TERM POST PANDEMIC IMPACTS
1
SHIFTED CONSUMPTION CIRCUMSTANCES • Prolonged Consumption Consequences • Permanent Basket Reforms • Brand & Retail Implications Impel Reset Constrained vs Insulated Spenders
RESPOND
REPRIORITISE
RESET
6
ECONOMIC & EMPLOYMENT UNCERTAINTY Consumers cautious about what lies ahead sharpest confidence plunge in 15 years GLOBAL CONSUMER CONFIDENCE INDEX 7 YEARS FOR CONFIDENCE TO RETURN TO PRE-GFC LEVEL
120
120
115
▼14 PTS IN 1 QUARTER
110
101
100
92
92
90
▼20 PTS
85
83
IN 5 QUARTERS
80
77
GLOBAL
2020-Q2
2020-Q1
2019-Q4
2019-Q3
2019-Q2
2018-Q1
2018-Q4
2018-Q3
2018-Q2
2018-Q1
2017-Q4
2017-Q3
2017-Q2
2016-Q4
2016-Q3
2016-Q2
2016-Q1
2015-Q4
2015-Q3
2015-Q2
2015-Q1
2014-Q4
2014-Q3
2014-Q2
2014-Q1
2013-Q4
2013-Q3
2013-Q2
2013-Q1
2012-Q4
2012-Q3
2012-Q2
2012-Q1
2011-Q4
2011-Q3
2011-Q2
2011-Q1
2010-Q4
2010-Q3
2010-Q2
2010-Q1
2009-Q4
2009-Q3
2009-Q2
2009-Q1
2008-Q3
2008-Q1
2007-Q3
2007-Q1
2006-Q3
2006-Q1
70
2005-Q3
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GFC 2007-2009
AUSTRALIA
Source: The Conference Board Consumer Confidence Index in association With Nielsen. * History of Nielsen CCI since 2005. Additional markets have been added to CCI over time, but it remains globally representative as all key markets have been consistent since 2005.
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ECONOMY & HEALTH CONCERNS SKY ROCKET AMIDST COVID-19
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Q4 2019
28%
24%
20%
18%
14%
ECONOMY
HEALTH
JOB SECURITY
WORKLIFE BALANCE
INCREASING FOOD PRICES
Q2 2020
42%
39%
26%
15%
12%
ECONOMY
HEALTH
JOB SECURITY
WORKLIFE BALANCE
INCREASING FOOD PRICES
+14
+15
+6
-3
% consumers nominating biggest and second biggest concern.
-2
8
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UNEMPLOYMENT BURGEONS, PARTICULARLY FOR THE YOUTH
UNITED KINGDOM
UNITED STATES
GLOBAL
Unemployment is nudging 3 million, vacancies have plummeted and pay packets are shrinking. All this while the government is paying the wages of millions of workers through its furlough scheme.
The US unemployment rate hit 14.7 per cent in April, the highest rate since the Great Depression, as 20.5 million jobs vanished. It means less income and less spending, perpetuating the economic downturn.
Nearly half of global workforce at risk of losing livelihoods. Almost 1.6 billion informal economy workers, out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living.
UNEMPLOYMENT IS HITTING NUMBERS UNSEEN SINCE 1970S. IT’S PREDICTED TO HIT 4 MILLION WHEN GOVERNMENT SUBSIDIES STOP IN OCTOBER DEEPING CONSUMER ECONOMIC HARDSHIP
THE EXPECTED SHIFT IN CONSUMER BEHAVIOUR REFLECTS FUTURE INSECURITIES REGARDING HEALTH, WEALTH, INCOME, AND EMPLOYMENT
FOR MILLIONS OF WORKERS, NO INCOME MEANS NO FOOD, NO SECURITY AND NO FUTURE. THEY HAVE NO SAVINGS OR ACCESS TO CREDIT.
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WHAT LIES AHEAD...
CONSUMERS NEED TO DO MORE WITH LESS
FOCUS ON IN-HOME SPEND LESS DISCRETIONARY
IMPACT IS NOT EQUAL NEW NEEDS BUT AFFORD LESS RISK
SPARE CASH AVAILABLE BUT SHIFT IN PRIORITIES
ONGOING POLARISATION CONSTRAINED SPENDERS
INSULATED SPENDERS
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WHAT’S HAPPENING IN THE SEAFOOD LANDSCAPE & WHY DOES THIS MATTER?
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SEAFOOD A TOP 10 GROWTH CONTRIBUTOR
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Fresh in top ranking growth categories while indulgence categories creeping back up the ranking TOTAL GROCERY TOP 20 CATEGORIES Quarterly % $ Contribution to Growth | 12 weeks to 06/09/2020 12.5%
7.9% 5.0% 4.2% 3.8% 3.5%
2.6% 2.6% 2.5% 2.2% 2.2% 2.2% 2.0% 1.8% 1.8% 1.6% 1.6% 1.4% 1.4% 1.3%
Source: Nielsen Homescan | Total Grocery Categories Ranked on $ Contribution to Growth
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TOTAL STORE SEAFOOD
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Although fresh seafood dominates sales, frozen proving increasingly popular. Canned performed well during COVID despite reduction in office lunches TOTAL AUSTRALIA | TOTAL STORE SEAFOOD $ Share | 52 Wks to 08/08/2020
TOTAL AUSTRALIA | TOTAL STORE SEAFOOD $ Growth vs YA | 52 Wks to 08/08/2020 0.0%
5.0%
10.0%
15.0%
20.0%
11.9%
25.1%
Fresh 52.7%
30.0%
25.3%
Fresh
Frozen
25.0%
23.5%
Frozen
14.7%
Canned 22.2% Canned
Source: Nielsen Homescan
12Wks $ Growth
7.6% 12.5%
52Wks $ Growth
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FISHMONGERS GREW SLIGHTLY FASTER FROM SMALLER BASE Despite fishmongers stronghold, 8-in-10 dollars still spent in supermarkets
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FISH & SEAFOOD Channel Value % Share | 4Wks to 08/08/2020
FISH & SEAFOOD Value & Volume Growth % | 4Wks to 08/08/2020 vs YA Value Growth %
Fishmonger 17%
20
Volume Growth % 21
20
11
19
9
Supers 83% Fish & Seafood
Source: Nielsen Homescan
Supers
Fishmongers
14
NON RESTRICTED STATES SHOW MOVE BACK TO FOODSERVICE / RESTAURANTS Vic posted strongest double-digits growth in retail due to population restrictions
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SUPERMARKETS | FISH & SEAFOOD BY STATE Value % Share | 4WKs to 08/08/2020
SUPERMARKETS | FISH & SEAFOOD BY STATE Value & Volume Growth % | 4Wks to 08/08/2020 vs YA Value Growth % 39
TAS WA 2% 10%
SA INC NT 6%
Volume Growth %
28 NSW 34%
21
20
12
9 QLD 20%
10
8
5
7 0
-4 -6 VIC 28%
Source: Nielsen Homescan
AUS SUPERS
NSW
VIC
QLD
SA INC NT
-10 WA
TAS
15
FRESH MAINTAINS HIGHEST $ SHARE OF CATEGORY Fish & Seafood seeing an ongoing move towards Frozen since March 2020
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FISH & SEAFOOD Value % Share | MAT to 08/08/2020
FISH & SEAFOOD Value & Volume Growth % | MAT to 08/08/2020 vs YA Value Growth %
Frozen 30%
Volume Growth % 15
13 11
12
12 8
Fresh 70% Fish & Seafood
Source: Nielsen Homescan
Fresh
Frozen
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SHOPPERS ARE BUYING MORE FROZEN AGAIN
AUSTRALIA | FISH & SEAFOOD BY SUBCATEGORY Volume % Share | 2 Years 4Wkly trend ending 08/08/20
Resurgence of COVID-19 – VIC & NSW
4Wk 08/08/20
4WK 11/07/20
4Wk 13/06/20
4Wk 16/05/20
4Wk 18/04/20
4Wk 21/03/20
4Wk 22/02/20
4Wk 25/01/20
4Wk 28/12/19
4Wk 30/11/19
4Wk 02/11/19
4Wk 05/10/19
4Wk 07/09/19
4Wk 10/08/19
4Wk 13/07/19
4Wk 15/06/19
4Wk 18/05/19
4Wk 20/04/19
4Wk 23/03/19
69.9 61.1 60.0 59.1 61.9 59.2 60.5 60.6 57.6 59.7 61.8 60.8 61.7 60.8 61.7 53.0 65.3 63.9 62.8 61.3 60.1
4Wk 23/02/19
70.9
Fresh
Source: Nielsen Homescan
Panic buying ease
30.1 38.9 40.0 40.9 38.1 40.8 39.5 39.4 42.4 40.3 38.2 39.2 38.3 39.2 38.3 47.0 34.7 36.1 37.2 38.7 39.9
4Wk 26/01/19
4Wk 01/12/18
4Wk 03/11/18
4Wk 06/10/18
58.6 59.7 60.0 58.9
COVID-19 Panic buying
29.1
4Wk 29/12/18
41.4 40.3 40.0 41.1
4Wk 08/09/18
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Frozen sales is gradually increasing in the last four consecutive periods
Frozen
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COVID: CATALYST FOR ONLINE GROCERY GROWTH
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Seafood typically under-developed in Australia has seen significant growth FRESH & FROZEN SEAFOOD Online Sales ($000’s) | 4 Week Periods Online
WW & Coles Online
FRESH & FROZEN SEAFOOD Online Market Share AO Online Retailers
8,000 7,000 6,000 5,000 4,000 3,000
NUMBER OF NEW HOUSEHOLDS BUYING FRESH SEAFOOD ONLINE IN LATEST 12 WEEKS VS YEAR AGO
Online
Brick & Mortar
96.3
94.6
3.7 YA
5.4 12W/E 08/08/20
2,000 1,000 0
Source: Nielsen Homescan™ | All other online includes Foodboxes, and specialty (e.g. Harris Farm,)
+235K
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PRE-PACKED MAP SEAFOOD GROWING SIGNIFICANTLY Perceived safety & convenience of pre-packed in a COVID-environment
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MAJOR SUPERMARKETS | SEAFOOD ONLINE SALES
40.6% 6.0% 2.5% 1.7%
7.3%
2.9% 12.0%
4.8%
21.7% 13.0% 11.1%
4.5% 13.9% 3.2%
-5.7%
5.0% -6.2%
12.7%
21.8% 5.5% -5.2%
14.1%
15.5%
4Wk 13/06/20
4WK 11/07/20
10.3%
-3.5% 4Wk 07/09/19
4Wk 05/10/19
4Wk 02/11/19
4Wk 30/11/19
4Wk 28/12/19
4Wk 25/01/20
4Wk 22/02/20
DELI RANDON WEIGHT VOLUME % CHG
Source: Nielsen Homescan: Major Supermarkets are Coles + Woolworths + ALDI
4Wk 21/03/20
4Wk 18/04/20
4Wk 16/05/20
4Wk 08/08/20
PREPACKED MAP VOLUME % CHG
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SALMON LEADING CATEGORY SHARE, WHILST OTHER SPECIES ARE FASTEST GROWING VS YA
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Crustaceans/Mussel/Squid relatively flat while the rest of species posted strong growth FISH & SEAFOOD BY SPECIES Value % Share | MAT to 08/08/2020
FISH & SEAFOOD BY SPECIES Value & Volume Growth % | MAT to 08/08/2020 vs YA Value Growth %
25
Other Species 14%
Barram. 5%
Salmon 39%
White Fish 18%
Volume Growth %
13
11
10
12
14
18
17 11
12 9 2
1 0
Crust. / Mussel / Squid 3%
Source: Nielsen Homescan
Prawns 21%
Fish & Seafood
Salmon
Prawns
Crust. / Mussel / Squid
Barram.
White Fish
Other Species
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FOR SUPERMARKET RETAILERS SEAFOOD HELPS DRIVE GREATER VALUE IN BASKETS
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Whilst Seafood is a premium protein relative to other Meats and offers scope for trading up consumers, there needs to be consideration for relative value
194 - Index to T. Meat
Source: Nielsen Homescan
Beef – Index 117
Pork – Index 109
Chicken – Index 80
Lamb - Index 131
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COVID POTENTIALLY INFLUENCING PURCHASE OF MORE LONG LASTING FROZEN SEAFOOD
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Top 3 recent covid growth contributors are Frozen vs pre-covid with Prawns at No.1 PRE-COVID TOP 10 GROWTH CONTRIBUTORS
COVID TOP 10 GROWTH CONTRIBUTORS
FROZEN BARRAMUNDI FRESH BARRAMUNDI FROZEN BASA FROZEN PRAWNS FRESH SEAFOOD OTHERS FROZEN FISH OTHERS FRESH SALMON FROZEN SEAFOOD OTHERS FRESH FLATHEAD FRESH FISH OTHER
FROZEN PRAWNS FROZEN SNAPPER FROZEN FISH OTHERS FRESH PRAWNS FRESH BARRAMUNDI FRESH SEAFOOD OTHERS FRESH SALMON FROZEN BARRAMUNDI FROZEN SALMON FRESH FISH OTHERS
Source: Nielsen Homescan | Based on Contribution to Volume Growth Pre Covid is 12 weeks to 10/08/2019 vs YA Covid is 12 weeks to 08/08/2020 vs YA
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MORE HOUSEHOLDS BUYING
SALMON
PRAWNS
BARRAMUNDI
WHITE FISH
Fresh 52.9% +1.9% Frozen 17.2% +2.0%
Fresh 36.8% +0.2% Frozen 27.3% +1.7%
Fresh 13% +0.5% Frozen 8.5% +0.2%
Fresh 30.5% +1.3%
Source: Nielsen Homescan
23
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INCREASING HOUSEHOLD CONSUMPTION
SALMON
PRAWNS
BARRAMUNDI
WHITE FISH
Fresh 3.3kg +0.1
Fresh 2.7kg +0.3
Frozen 1.1kg +0.1
Fresh 2.5kg +0.1
Source: Nielsen Homescan
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SO WHAT NEXT? HOW CAN WE TAKE ADVANTAGE & BETTER MEET CONSUMER NEEDS
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RESPONSES TO COVID RETAIL RESTRICTIONS
26
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HOW THE INDUSTRY HAS RESPONDED
27
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WHERE ARE THE RISKS & OPPORTUNITIES?
WORKING WITH RETAILERS
PARTNERING WITH D2C PLAYERS
ESTABLISHING AN ONLINE PRESENCE
28
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SUMMARY
THE BIGGER PICTURE
THE SEAFOOD LANDSCAPE
WHAT’S NEXT
COVID Impacts on retail & consumers
Understanding the trends & why it matters
Identifying opportunities & managing risk
29
SHAPING A SMARTER MARKET™ This artwork was created using Nielsen data. Copyright © 2020 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute.