American Egg Board 2010 Shopper Research Study

Overview Major marketers are focusing on the “last mile,” attempting to influence the many buying decisions that are made in-store Success in this key area is driven by shopper insights that go beyond traditional consumer market research. Insights must come from an understanding of attitudes, motivations and actions that are specifically tied to the shopping experience.

Objectives Overall: Increase the overall knowledge of egg shoppers, and how they think and behave Identify opportunities to stimulate increased retail egg sales

Objectives More Specific Objectives: Provide insights regarding The egg purchase process Motivations for egg purchases Factors promoting/inhibiting purchase of all types of eggs Potential impact of in-store factors on egg purchases

Methodology Conducted by K.L. Simon & Associates Quantitative survey among a nationally representative sample of egg purchasers 1400+ completed surveys among light, medium and heavy users of eggs Light = buy one carton or less a month Medium = buy 11/2 – 2 cartons a month Heavy = buy 3 or more cartons a month

The Egg Purchase Overview: Eggs are primarily a planned purchase But not typically purchased with a use in mind Always on the list and constantly being re-stocked

The Egg Purchase Influencing factors: Price/promotion consistently appear as key influencers on…whether to buy, how much to buy, which type of eggs to buy. Store factors also play a key role Product condition and appearance Code dates and pricing Availability of desired variety

Relative importance of factors: The Egg Purchase Relative importance of factors: 84% of respondents say “appearance of eggs inside carton” is a very important influencer Code Dates (66%) and Price (67%) are also key contributing factors. Health/dietary concerns are very important to 32% of respondents

The Egg Purchase Spontaneous egg purchases do occur 72% of those surveyed buy eggs when they were not on their list – driven primarily by heavy users Even 60% of light users made unplanned buys Unplanned egg sales are triggered by: Noticing a sale price Buying something else that requires eggs Remembering a need while in-store

Overall Egg Usage Influencing amount of eggs purchased: Amount of eggs purchased varies significantly from trip to trip – particularly among heavy users. The opportunity exists to increase average purchase quantity via in-store stimuli and improved egg case conditions

The Egg Purchase Attitudes/perceptions encouraging egg use Perceptions of nutritional benefits Heavy users much more likely to perceive positive nutritional benefits of eggs Perceptions of eggs as good protein source most widespread among heavy users Perceptions of price/value Heavy users more likely to see eggs as a good value and economical meal Openness to eating/serving more eggs All egg user groups expressed a definite openness to consuming more eggs

The Egg Purchase In-Store Factors discouraging purchase 40% of egg purchasers go to the egg case, examine the options and walk away! Why? Eggs are broken or in poor condition Egg prices are too high Lack of availability of desired variety

The Egg Purchase Other Factors limiting purchase Number of occasions they want to eat eggs (34%) Number of egg dishes they know how to make (21%) Concerns about cholesterol (23%)

The Egg Purchase Other Factors limiting purchase Perceptions of nutritional benefits 2/3 of egg shoppers do not hold the belief that eggs contain important nutrients you cannot easily get in other foods 1/3 are mixed about the overall health benefits of eggs 1/4 do not see eggs as one of the best protein sources Perceptions of price/value Almost 40% do not see eggs as a particularly good value or economical meal

The Egg Purchase Impact of the egg case The egg case is perceived as easy to shop The number of product choices is viewed as appropriate However, there are many opportunities to improve: 25-30% are confused about the differences in egg types and options Poor egg condition dissuades a significant number of purchases Light/medium users are less likely to enjoy the egg purchase experience

Overall Egg Usage Breakfast focus limits purchases: Majority of egg users (particularly medium/light) do not use eggs for non-breakfast occasions. Another opportunity to increase purchasing by promoting non-breakfast usage via in-store messaging.

Heavy/Medium/Light Users Usage patterns vary greatly across user groups: 46% of heavy users use eggs for lunch vs. 22% for light users. Heavy users are also much more likely to use eggs for dinner/snacks…but still far below breakfast usage levels. Opportunity to increase non-breakfast usage across all groups and all occasions.

Heavy/Medium/Light Users Heavy user differences Heavy users are much more likely to Perceive positive nutritional benefits of eggs See eggs as a good value and an economical meal Be motivated by in-store promotions Find the egg case appealing Assign greater importance to code dates and egg appearance in the carton

Egg Types Perception & Knowledge Significant differences in familiarity and knowledge of egg types across user groups Heavy users have the greatest overall knowledge of all egg types. But, familiarity with Organic (34%), Cage-Free(30%) and Nutrient-Enhanced(16%) eggs is quite limited among all groups.

Egg Types Perception & Knowledge The majority of egg shoppers do not understand the differences that would lead them to buy one kind of egg over another Overall favorability ratings of alternative egg types are lower than for regular white eggs Very few see Organic, Cage Free and Nutrient-Enhanced as a good value for the money.

Opportunity Summary The Egg Case What if even 10% of those walking away from the case had made a purchase??? Capitalizing on this opportunity requires: Better in-carton egg quality Full availability of egg options

Opportunity Summary In-store messaging Attitudes impeding egg purchase can be impacted via succinct messaging in the “last mile” Messaging opportunities on the carton and in the aisle/section include: Non-breakfast serving suggestions Recipes for all day-parts Information on all health/nutritional benefits of eggs New data to alleviate cholesterol concerns Education information on various egg types. Information on the positive value story for eggs

Opportunity Summary In-store promotion Every day price and regular features are still the number one motivator across all user groups A variety of promotional tactics should be explored to try and drive increased purchases Tie-in promotions with complimentary items Inclusion in retailer circular (with or without price discount) on a regular basis Coupons delivered via carton, online or FSI

Opportunity Summary Improving the overall experience can drive increased usage across all user groups Maintain a neat, well organized case Assure well stocked sections with eggs that are in good condition Provide information on new ways to enjoy eggs Reinforce the many positive health/nutritional aspects of eggs Inform shoppers on the various egg types Present relevant promotions that support the value, flexibility, and nutritional story that is unique to eggs.