Recessionary Strategies for Food and Drinks Companies: The impact on NPD, price architecture and future developments

Table of Contents

Executive summary

• The recession and spending on grocery
• The impact of the recession on grocery sectors
• Recession and grocery retail

Chapter 1 - Macroeconomic analysis

• Summary
• Introduction
• Developed economies in recession
• The cost of food and drinks

Chapter 2 - Resilience, vulnerability and trading down

• Summary
• Introduction

• Immediate impact of the recession
• Short-term movement in grocery markets
• Resilient sectors of the market
• Premium and ethical products

• The impact of trading down
• Impact on market structure
• Case study- Bonduelle

• Movement to home consumption
  • Taking more meals at home
  • Entertaining at home
  • Preparation of food for out-of-home consumption

Chapter 3 - Recession and the grocery retail sector

• Summary
• Introduction
• Grocery retail and the recession

• Growth in value retail and discounters
• Dynamics of price-driven discount food retail
  • Building standardized ranges
  • Targeting high growth segments
  • Adapting products to suit local tastes

• General trading down in grocery retail
• Premium private label offering
• Ongoing development of lowest price private label
• Upmarket retailers develop value ranges

• Growth of private label

Chapter 4 - Innovation and NPD

• Summary
• Introduction

• Price and value strategies
• Targeting budget-conscious consumers
• Focusing on costs and pricing
  • Packaging modification

• Targeting in-home consumption
• Meal occasions out of the home
• Displacement of demand
  • Products and ingredients for home cooking
  • Home entertainment and treats

• Products for out-of-home consumption

Chapter 5 - Outlook and future developments

• Summary
• Introduction
• Outlook scenarios for developed economies
• Consumer trends over the next 5 years
• The evolution of NPD

List of Figures

• Figure 1.1: Quarterly real GDP growth in Europe, the US and Japan (%), 2008-Q2 2009
• Figure 1.2: Economic Sentiment Index, Europe, 2004-2009
• Figure 1.3: Unemployment rates in Europe, the US and Japan, % of adults, September 2008-June 2009
• Figure 2.4: Rating of resilience to the downturn of different product categories
• Figure 2.5: Recessionary impact on market structure
• Figure 2.6: Sectors gaining from trading down
• Figure 3.7: Retail strategies for recession in the UK
• Figure 3.8: Growth in discounter share of European grocery market value, 2003-08
• Figure 3.9: Innovative private label offerings
• Figure 3.10: Trading down in a recession
• Figure 3.11: Grocery private label share (%,value), Europe, May 2009e
• Figure 4.12: Balancing experience with value
• Figure 4.13: Importance of downturn-related consumer trends on grocery
• Figure 4.14: Rating of importance of strategies targeting budget-conscious consumers
• Figure 4.15: Rating of options for cutting costs and developing lower price products
• Figure 4.16: Expectations of changes in marketing and NPD expenditure during recession
• Figure 4.17: Innovation in packaging
• Figure 4.18: Out-of-home share of total meal occasions (% of annual occasions), Europe and US, 2008
• Figure 4.19: Meals for out-of-home consumption
• Figure 5.20: Rating of importance of consumer trends over next five years
• Figure 5.21: Rating of impact of downturn on NPD by region
• Figure 5.22: Key positionings by year for all food and drinks products (% share of launches), 2007-2009

List of Tables

• Table 1.1: Quarterly real GDP growth in Europe, the US and Japan, 2008-Q2 2009
• Table 1.2: Unemployment rates in Europe, the US and Japan, % of adults, September 2008-June 2009
• Table 1.3: Monthly changes in food prices, EU economies (%), August 2008-July 2009
• Table 3.4: Growth in discounter share of European grocery market value, 2003-08
• Table 4.5: Out-of-home meal occasions, Europe and US (occasions bn), 2003-2008
• Table 5.6: Impact of outlook scenarios for developed economies on grocery sector