January 2015 Executive Overview IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. To provide a framework for CPG marketers looking to solidify consumer loyalty and spur volume and margin growth in 2015 and beyond, IRI commissioned an extensive analysis of the reciprocity of national and private brand CPG solutions and the role they play in helping consumers to live well for less. This analysis clearly illustrates that retail shelves must contain both national brand and private label solutions. Situation: The economy is stabilizing and optimism is spreading. Still, four in 10 consumers remain financially challenged and many consumers are still entrenched in conservative behaviors. Consumer packaged goods (CPG) industry sales trends are stagnant, with dollar sales growth being largely driven by price increases. But the economic outlook for 2015 is favorable, giving CPG marketers hope for more widespread organic growth in the new year. The shopper journey has become complex—consumers have more choices than ever in today’s omni-channel marketplace. Ultimately, driving growth in this environment is about making the shopper journey simple, convenient and affordable. It’s about giving the shopper control. Opportunity: Intelligent deployment of national brand and private label strategies will provide consumers with simple, convenient and affordable solutions to their everyday CPG needs, and support vitality in a CPG industry that is looking to provide affordability and value in a diverse and complex consumer marketplace. Successfully prompting growth without eroding margin or brand loyalty is critical, so CPG marketers must rely on three key strategies: Increase penetration with highly targeted products and marketing programs that keep value and affordability in the crosshairs; Fracture concentration with innovation that addresses key consumer trends and white- space opportunities; Create and embrace a brand story centered around value, authenticity and affordability.

Executive Summary: Putting Affordability in the Crosshairs Limitations: With shelf space at a premium and consumers looking for near-individualized levels of service, getting it right is not a simple task. National brand manufacturers are working to innovate to serve consumers’ diverse and complex definitions of value. Retailers and private label manufacturers are challenged by the complexity of managing private label lines across multiple categories and balancing the importance of serving more needs against the difficulty of increasing complexity even further by expanding private label lines across still more CPG categories. Value: Consumers spend $725 billion on packaged goods each year. At $120 billion in annual sales, private label products play a vital role for the industry, giving retailers an avenue to differentiate themselves in a highly competitive marketplace and consumers more ways to meet their CPG needs. The value of even a fraction of a share point translates to a considerable gain—or loss—for private label and national brand marketers alike.