Shopper Insight Report- Beer Category HGCA and VCR² Kent Business School Report

Contents Providing Shopper Insights Objectives Data Sharing Restrictions Executive Summary Analysis Appendix

Health Warning! The dunnhumby data offers unparalleled breadth and depth but it does not tell us why shoppers behave the way they do Further research is warranted in order to understand the purchasing drivers (e.g. attitudes, perceptions, motivations) before changes are made to the marketing mix (product, price, place, promotion) or resources are deployed for the development of new products

Providing Shopper Insights

Providing Shopper Insights Collaboration between HGCA and the Centre for Value Chain Research at Kent Business School since 2005 Sponsorship of PhD students Access to panel of 1.4 million supermarket shoppers Provide generic and tailor made insight reports for the industry free of charge

Centre for Value Chain Research

Objectives

Objectives Provide an overview of shopper behaviour and shopper segmentation for Beer products Identify opportunities for market/product development Highlight potential areas for further research Demonstrate the breadth and depth of shopper insight that is available to farmers and small food producers

Data Sharing Restrictions

Data Sharing Restrictions This information is supplied by Kent Business School on the strict understanding that recipients use it exclusively as part of their own marketing and product development activities. Under no circumstances should the information provided be shared with third parties, without our prior consent. Failure to comply with these requirements will result in the organisations involved being denied further (subsidized) access to the dunnhumby data and may jeopardise this service provision for farmers and small food producers in the future.

Executive Summary

Executive Summary The category appeals largely to Young Families, with differences observed when looked at the different types of beer. Regional differences are mainly observed when local products are considered but this would deserved further analysis before concluding on the performance of such products. Cross shop analysis reveals that premium products are only a occasional purchase for beer consumers who have bought it along with other beer products. Barrier to repeat purchase other than price should be considered as this may generate increase in sales.

Composition of Beer Category Analysis Composition of Beer Category

Composition of Beer Category Ales and Stouts Lager Premium Beer Bottles Premium Beer Cans Regional Beers

Analysis Shopper Segmentation

Shopper Segmentation Shopper profiles are presented in index form, with 100 representing the average for all supermarket shoppers Over-indexing segments purchase a disproportionately high share – they find them appealing Under-indexing segments purchase a disproportionately low share – they find them less appealing. In looking for potential target segments (those which are under or over performing) attention is drawn to those which over-index or under-index by at least 10% Further segmentation, by geo-demographics and detailed lifestyle can be provided upon request

Lifestage segmentation: Beer – total (12 wks to 27 Jul 08) Looked in general the Beer category appeals the most to Young Families and does not attract as much Pensioners

Finer foods shoppers seem to be the most attracted by beers Lifestyle segmentation: Beer – total (12 wks to 27 Jul 08) Finer foods shoppers seem to be the most attracted by beers

Regional segmentation: Beer – total (12 wks to 27 Jul 08) Regional differences are not so pronounced, East England slightly over perform the other regions whilst London and Northern Ireland are the worst performing regions

Young families over index over the different subgroups Lifestage segmentation: Beer – Ales, Stout and Lager (12 wks to 27 Jul 08) Young families over index over the different subgroups Pensioners prefer Ales and Stout in comparison to Lager and Regional Beer

Finer Foods and Healthy shoppers interested in Regional beers Lifestyle segmentation: Ales, Stout and Lager (12 wks to 27 Jul 08) Lager seem to have an equal appeal to all lifestyles whilst less appealing to Traditional shoppers Finer Foods and Healthy shoppers interested in Regional beers

Regional segmentation: Ale, Stout and Lager (12 wks to 27 Jul 08) Regional beers have bee grouped all together so many regions tend to over index die to their local products, however Northern Ireland is the worst performer there which means they may be opportunity to launch a product with regional attribute

Lifestage segmentation: Premium Beer(12 wks to 27 Jul 08) Cans appeal more to Older Adults than Bottles whilst the opposite is observed for Young Families.

Lifestyle segmentation: Premium Beer (12 wks to 27 Jul 08) Finer food and Healthy are orienting their purchases towards Premium beer products.

Regional segmentation: Premium Beer(12 wks to 27 Jul 08) The performance of regions varies greatly depending on the format of the product, however it is important to note that products may not match in both groups

Analysis Cross Shop Analysis

Cross Shop Analysis Over performing segments: Young families Convenience Premium beer consumers are buying different types of beer Over performing segments: Pensioners Traditional Northern Scotland Over performing segments: Young families Finer foods East England 1.23% of total customers

Conclusion

Conclusions There are always opportunities for suppliers and retailers who are a) willing to look and b) able to make changes in order to exploit consumer demand that is not met by the existing offer Analysis reveals that different subgroup appeals to specific customers. Increase in the number of customers resulting form a larger distribution of products has produced an incline in volume sales Lager still leads the whole category, generating the highest volume of sales. Consistently over-indexing shopper segments (young families, and finer foods shoppers) are good targets for increasing purchase frequency. Consistently under-indexing shopper segments (young adults, and price sensitive shoppers) represent potential customers that may be appealed in the category by special offers and marketing activities. 29

Appendix

the dunnhumby data 2yrs of weekly supermarket purchases 1.4 million shoppers Representative of 40% of UK households Over 30,000 food products Segmented by; Lifestage (young adults, young families, older families, older adults, pensioners) Lifestyle (Up-market, Mid-Market and Less Affluent shoppers) Region (13 TV advertising regions)

The dunnhumby data: Lifestage Segmentation % shoppers Lifestage segment Age & family Adults aged 20-39 with no children Young Adults 16% Adults aged 40-59 with no children Older Adults 14% Adults with all children under 10 Young families 15% Adults with one or more child over 10 Older families 16% Adults over 60 with no children Pensioners 9% Multigenerational households Mixed 28%

The dunnhumby data: Lifestyle Segmentation % shoppers Lifestyle segment Key Characteristics time conscious, enjoy luxury products and are willing to experiment Finer Foods 17% interested in organic, environmental benefits, low fat/sugar and calorie conscious Healthy 9% regard food as fuel, are busy and rely heavily on the microwave Convenience 22% look primarily for value and rely on staple foods Price Sensitive 16% have broad tastes, favour established brands and are influenced by the needs of children Mainstream 26% enjoy the art of cooking but rely on a fixed shopping list so less likely to buy on impulse Traditional 10%

The dunnhumby data: Regional Segmentation ISBA (TV advertising) regions North Scotland – STV North (Aberdeen, Dundee) Central Scotland – STV Central (Glasgow, Edinburgh) Borders – Border Television North East – Tyne Tees Television North West/ Lancashire – Granada Television Northern Ireland - UTV Yorkshire – Yorkshire Television Midlands – Carlton Central East England – Anglia Television London – LWT Wales and the West – HTV Wales & HTV West South and South East – Meridian Broadcasting South West – Carlton West Country

The dunnhumby data: Regional Segmentation % shoppers % shoppers Region Region London 20% Scotland 9% Midlands 15% Yorkshire 8% Southern England 11% South West 4% Lancashire (NW) 10% North East 3% East of England 9% Northern Ireland 3% Wales & the West 9%

Contact Details: HGCA Rachael Arding For further Information about how your business can obtain more information like this please contact: Rachael Arding HGCA Market Development Project Executive Email: Rachael.Arding@hgca.com Telephone: 020 7520 3930

Contact Details: VCR² and Kent Business School For further information about the Centre for Value Chain Research at Kent Business School, please contact: Melanie Felgate Centre for Value Chain Research, Kent Business School, University of Kent, Canterbury, CT27PE Email: m.felgate@kent.ac.uk Tel: 01227824766 Website: www.kent.ac.uk/kbs/cvcr

Contact Details: VCR² and Kent Business School For further information about the Centre for Value Chain Research at Kent Business School, please contact: Professor Andrew Fearne Centre for Food Chain Research, Kent Business School, University of Kent, Canterbury, CT27PE Email: a.fearne@kent.ac.uk Tel: 01227824840 Website: www.kent.ac.uk/kbs/cvcr

Thank you