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BULGARIAN FMCG RETAIL MARKET
A snapshot of how Nielsen views the latest developments in Bulgaria
May 30th, 2013Sadanski, Bulgaria
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What is happening out there?
How this reflects to the consumer behavior?
How this reflects to the consumer behavior?
WHAT WE WILL COVER TODAY
The state of the overall FMCG trade of Bulgaria vs. Europe
Development of product categories
Development of store formats
Does this affect the psychology of consumers?
Are shoppers changing behavior? How do they adapt?
What does this consumer behavior mean for us?
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TOTAL EUROPE: STILL ON GROWTH BUT WITH A DIVERSE PICTURE NORTH/CENTRAL VS. SOUTH
Total FMCG Value Growth
YEAR 2012
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5(*):Austria, Belgium, Czech Rep., Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Turkey, UK.
1,0% 3,4% 3,6% 2,1% 3,1% 3,9% 4,5% 4,5% 4,2% 3,5% 3,0% 3,1%
1,0%
0,9%
0,0%
0,2%
2,1%
0,6%
0,7%
0,2%
-0,8%-0,4% -0,2%
0,2%
2,0%
4,3%
3,6%
2,3%
5,2%4,5%
5,2%4,7%
3,4% 3,1% 2,8%3,3%
2010 2011 2012 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Volume change Unit value change Nominal Value Growth
EUROPE OVERVIEWErosion of volume growth in 2012 – market is driven by inflation. Slight positive growth in Q1.
Source: Nielsen Growth Reporter
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-1,4%
1,0% 0,6%
-0,6%
1,8% 1,9%0,9%
0,2% -0,2%
-3,5%
-4,2%
0,0%
-3,9%-4,9%
-3,9%
-0,5%
1,7%
-0,3%
-4,9%-3,2%
0,6%
-4,5%
-3,1%
-2,0%
0,4%
1,9%
-0,5%
2010 2011 2012 Dec-Apr 11 Apr-Aug 11 Aug-Dec 11 Dec-Apr 12 Apr-Aug 12 Aug-Dec 12-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
Volume change Unit value change Nominal growth
BULGARIA FMCG MARKET DYNAMICSSome positive signs shown in 2012 but not consistent enough
Source: Nielsen Growth Reporter
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BULGARIA TOTAL FOODAfter a stabilized 2012, sharp volume decrease in DJ’13 returns the market to clear negative. Volume uplift in FM’13 smoothens out the negative trend
5,1 4,9 4,5 4,2 4,73,7
6,6
1,4
-0,7-0,1 -1,4
2,3
-2,4
-6,0
-3,9-5,0 -5,3 -5,6
-5,0-5,9
-0,1
1,7
-0,7
1,1
-5,1
1,7-0,9
1,0
-0,4 -1,0 -0,9-1,3
0,7 1,2 1,0
-0,7 -0,3-2,8
-0,8
FM 2011
AM 2011
JJ 2011
AS 2011
ON 2011
DJ 2012
FM 2012
AM 2012
JJ 2012
AS 2012
ON 2012
DJ 2013
FM 2013
-8
-6
-4
-2
0
2
4
6
8
Unit value change Volume change Nominal Value Growth
Source: Nielsen Retail Measurement Services
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-0.8%-3.0%
-4.2%
1.5% 0.8%
-4.0%-2.5%
-1.5%
6.8%
1.1%
-6.7%TOTAL FOOD &
BEVERAGESCONFECTIONERY SHELF STABLE
PRODUCTSBABY FOOD &
DRINKSSNACKS CHILLED
SPREADSDAIRY ALCOHOLIC
DRINKSHOT BEVERAGES COLD
BEVERAGESBEER
0.2%
3.4%
-2.2%
3.0%
9.1%
5.1%
-0.3%
2.8%
0.2%
-1.1%
-6.5%TOTAL FOOD &
BEVERAGESCONFECTIONERY SHELF STABLE
PRODUCTSBABY FOOD &
DRINKSSNACKS CHILLED
SPREADSDAIRY ALCOHOLIC
DRINKSHOT BEVERAGES COLD
BEVERAGESBEER
Value Growth vs. Year 2011
VALUE AND VOLUME GROWTH IN FOOD 2012Snacks & chilled are the top growing categories but confectionery is the real winner due to its importance
Volume Growth vs. Year 2011
Source: Nielsen Retail Measurement Services
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4.9%
0.7%
6.2%
17.3%
10.6%
2.6%
PERSONAL CARE HAIR CARE ORAL CARE BABY CARE BODY & FACE CARE GROOMING
Value Growth vs. Year 2011
VALUE AND VOLUME GROWTH IN PERSONAL CARE 2012Bigger categories such as Hair Care & Grooming present marginal growth, whereas smaller ones achieve further penetration
18.8%
-3.2%
7.0%
22.4%
13.2%
-5.3%
PERSONAL CARE HAIR CARE ORAL CARE BABY CARE BODY & FACE CARE GROOMING
Volume Growth vs. Year 2011
Source: Nielsen Retail Measurement Services
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8.5%9.5%
5.6%
11.1% 11.1%
HOUSEHOLD PRODUCTS PAPER PRODUCTS HOUSEHOLD CLEANERS AIR FRESHENERS INSECT CONTROL
Value Growth vs. Year 2011
Volume Growth vs. Year 2011
6.1% 6.0%
3.1%
16.4%14.0%
HOUSEHOLD PRODUCTS PAPER PRODUCTS HOUSEHOLD CLEANERS AIR FRESHENERS INSECT CONTROL
VALUE AND VOLUME GROWTH IN HHL PRODUCTS 2012Clear progress for all categories
Source: Nielsen Retail Measurement Services
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NUMERIC EVOLUTION OF RETAILER UNIVERSESteady development of the modern trade
16.8 16.0 10.8 5.912.00
5
10
15
20
2009 2010 2011 2012 2013
# Of Retailers Growth (%) – FS > 101 sq.m.
14.4
6.010.6
12.7 12.4
21.423.6
9.2
5.912
-5
0
5
10
15
20
25
2009 2010 2011 2012 2013
# of R
etaile
rs %
chan
ge
Hyper/Supermarkets >300 sq. m. ExtraLarge Groceries 101-300 sq. m.
Source: Nielsen Census 2013
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-4.0-1.9
-3.9-5.0-4.1
-5
0
5
2009 2010 2011 2012 2013
# Of Retailers Growth (%) – FS < 101 sq.m.
-4.9
2.4 3.8
8.3
-3.9 -5.3-3.0
-6.0-8.9
1.7
-15
-10
-5
0
5
10
15
2009 2010 2011 2012 2013
# of R
etail
ers %
chan
ge
Large Groceries 41 - 100 sq. m. Med/Small Groceries <40 sq. m.
NUMERIC EVOLUTION OF RETAILER UNIVERSELarge Groceries revive at the expense of small ones who face strong losses
Source: Nielsen Census 2013
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CONSUMER CONFIDENCE IS TRENDING DOWNWARDS
90% of Bulgarians think that the country is in an economic recession at the moment
TOP CONCERNS OF THE BULGARIAN CONSUMER
Increased utility bills and job security are the highest ranked concerns of local consumers for three quarters in a row
73 74 7471 72 73 74
71 71
6461
57
0
20
40
60
80
100
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Nielsen Consumer Confidence Index
EU
BULGARIA
CCI Q1Greece – 40
Romania – 59Russia – 81Poland – 62Turkey – 83Croatia - 44
Source: Nielsen Global Consumer Survey
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43 45 45 48 49 50 51 54 55 55 57 55 59 60 60 63 67 67
58 56 55 52 50 50 49 47 45 45 44 44 41 40 40 37 34 33
0%
20%
40%
60%
80%
100%
Do not necessarily know all the prices/do not know at all the prices
Know all/most prices
PRICE AWARENESSAlthough Bulgarians used to not be as price aware as the rest Europeans, in 2013 price awareness has increased to EU median
49 51 55
51 49 45
Source : Nielsen Shopper Trends 2013
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0%
10%
20%
30%
40%
50%
60%
70%
80%Gl
obe
Hung
ary
Gree
ce
Belg
ium
Germ
any
Port
ugal
Croa
tia UK
Italy
Pola
nd
Fran
ce
Spai
n
Switz
erla
…
Bulg
aria
Czec
h
Rom
ania
Russ
ia
Ukr
aine
Switch to cheaper grocery brandsWill continue to switch to cheaper brands
HOW THEY SAVE ON THEIR HHL SPENDINGBulgarian consumers are not so eager to choose cheaper brands as a saving strategy… they are looking for value for money instead
71 43 40 77 91 31 44 75 44 62 55 47 100 57 68 59 81 66 CCI
Source: Nielsen Global Consumer Survey Q1 2013
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0%
25%
50%
75%
100%
EU
Bulgaria
20
10
35
28
17
11
16
32
1219
Promotion rarely change my brand choices
Only buy promotions when I already like the brand
Regularly buy different brands because of promotions
Very seldom change stores, but when shopping, I actively search for promotionsChange stores based on which one I think has the best promotions that trip
PROMOTION SENSITIVITYBulgarians continue to be loyal to the brands. Promotions are interesting but there needs to be a strong brand
Source : Nielsen Shopper Trends 2013
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A THREAT TO INNOVATIONIn 2013 we observe a decrease among innovators, possibly a result of the decreasing confidence
19%
59%
21% I seldom try new things - I find it is far better to know what you want rather than risk buying something that may not work outI sometimes buy new brands or products - but usually stick to my favourites
I love trying new things - I'm always on the lookout for new brands and products
30%
51%
19%
20132012
Source : Nielsen Shopper Trends 2013
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• Modern Trade grows steadily though not only through the large store formats –medium sized stores are winners too
• Tough environment – Bulgarian consumer becomes more price aware and less ready to try everything new
• Promotions are growing but still the Bulgarian shoppers are not trained into promo hunt
KEY POINTS AND IMPLICATIONS