Giles Fisher Head of Meal Solutions

Waitrose in numbers Market share 5.2% and growing Gross sales €8.3 Billion sales Branches 392 branches Main branches 301 Convenience 62 Dedicated online 1 Motorway services 28 Export countries 58 Owned by the Partners 60,0000 Awards

What does Waitrose stand for? 1. Founded in 1904 by Waite Rose & Taylor 2. Needs of tomorrow In branch Convenience stores Online 3. Waitrose way brief…

What makes Waitrose different? Everyone is promoting British But Waitrose is also about quality Everyone now talks about supporting British Products But Waitrose is about quality

Challenges in the UK market Overall market is in decline due to

Retailer challenges Growth coming from Value and Premium The ‘savvy’ shopper is here to stay The market structure is changing dramatically in the UK. The ‘top end’ food retailers: Waitrose & M & S are performing well and at the other end of the market the discounters continue to show double digit growth. The result of this is the rest of the market is being squeezed in the middle with the traditional ‘big 4’ struggling. The change in the UK market is driven by changes in the behaviour of the UK consumer. Shoppers are much more ‘savvy’ than they used to be:- They are shopping around. Consumers are much more promiscuous than they used to be and will shop more often with a smaller basket size The shopping visits are more planned than they used to be with consumers looking for value for money Food waste is high on their agenda

Consumers buy less, but more often Multichannel is the future Convenience is key as consumers are getting busier All the growth forecast in the UK market up to 2019 will come from 3 channels:- Online +9.2% Convenience +11.6% Discount +10.6% Sales in the superstores and hypermarkets will decline. Producers must ensure they have specific strategies for the different channels to ensure they capitalise on the growth in these channels Consumers are getting busier which means less and less time is spent in the kitchen. In 1980 in the UK the average meal took 60 minutes to prepare by 2015 this had dropped to 32 minutes. Only 20% of families eat their evening meal together and the most popular meal is a sandwich! All of this means that producers that can offer time saving convenient solutions will be the winners.

Italian Food & Drink sales to the UK 2014 sales €2.8 Billion +0.87% Italian share 6.4% Dialogue In 2014 sales of Italian products to the UK was €2.8 Million with a growth of 0.87% 6.4% of all Food and drink products sold in the UK are sourced from Italy Largest areas: Wine Pasta Tomatoes Olive Oil Cheese Charcuterie Source: ICE Italian Trade Commision based on Intrastrat coding info

Waitrose “Made in Italy” products A selection of Italian products sold in Waitrose Waitrose over trades on Italian products (versus your market share) Due to Waitrose customers looking for Authentic products from around the world Key over trade areas are: Olive Oil Olives & Antipasto Charcuterie

Why do the UK love Italian products? Food Culture Holidays Style Why do UK consumers like Italian products? Cibo Italian food 3 of the top ten most popular dishes in the UK are Italian (Pizza, Lasagne & Spaghetti Bolognese) Vacance Holidays Very popular for city breaks (Venice, Rome & Florence) 6 most popular place for British people to go on holiday Cultura The imagery and the history is very popular in the UK Stile Italy has a very Iconic style from Gucci or Armani, to Pininfarina or Ferrari and then into Alessi, Italian style appeals to the UK market

Requirements to supply the UK Own Label Accrediation Sourcing Animal Welfare Traceability Authenticity Packaging Requirement for the supply of retailer branded Accreditation UK retailers require all sites to be audited on an annual basis and keep records for all productions Sourcing Animals Need to come from a Animal Welfare accredited Scheme, to control diet, living standards and treatment Traceability All ingredients need to come from ethical sourcing and be fully traceable back Authenticity UK customers want to buy the real thing, so products need to come from the area Packaging Packaging needs to be inspiring and fit for purpose

Waitrose Italian Salumi awarded “Good Sow Commendation” 2015 This involved in improving the farming standards by: Natural bedding – straw More space Open Farrowing crates No tail docking 2016 sees an application for the Good Pig Award – which would be the first to be awarded to a major producer in mainland Europe

Key Challenges/Threats to Italian producers in the UK Deflation Health The UK retail market is currently experiencing deflation. This poses a potential threat as many consumers look for cheaper products which is not always compatible with the high quality Italian products being produced UK consumers are more aware of health issues than ever before. This could pose a threat to Italian products which are not considered nutritionally balanced e.g. products with a high fat or salt content. Low fat, low salt and ‘free from’ products are all significantly growing. On the plus side the image of the healthy mediterranean diet could benefit Italian products which are perceived as healthy e.g. Olive oil

Impact from World Health Organisation announcement on processed meat Ham Sausages Bacon 2015 2016

How to succeed in the UK market Own Label High Quality products Authentic From the Region With interesting stories Supported by Approval factories Welfare standards on meats Traceability on all raw materials Knowing how the staff are treated Packaging UK offers Central distribution Growing market Growth in Premium products