1. Safeway Northern California Packaged Meat Analyses
Nielsen Perishables Group
December 2015

2. Table of Contents
What We Analyzed 3 Analysis Snapshots Meat Wall Landscape 4 Promotional Best Practices 5 Price Gap 6 Recommendations 7
Source: Nielsen Perishables Group

3. What we analyzed… Meat Wall Landscape
Gain: understanding of current trends
…assessing performance and emerging trends in processed lunchmeats, bacon and dinner sausages sold in the meat department
Promotional Best Practices
Determine:
promotional trade activity
…for the processed lunchmeat category at Safeway NorCal through ad placement, promotional frequency, etc.
Price Gap Analysis
Identify: optimal
prices and price gaps
…for Safeway NorCal by product selection (brands and protein types) for processed lunchmeats to understand typical price point and where/how consumers are reacting to different
price gaps
Columbus Foods has partnered with Safeway NorCal to create a merchandising test that would place Columbus deli meat products in the meat department.
Source: Nielsen Perishables Group

4. Meat Wall Landscape
Utilize strong performance in specialty meat
Strong dollar share and growth in salami
SFY Nor Cal Specialty Meat Segment
Dollar Share and Growth
Dollars per $MM ACV Sales
Volume per $MM ACV Sales
Average Retail Price
$7.67
+1.5% vs. YAGO
+6.8%
7.3%
VS YAGO
7.3%
VS YAGO
5.7%
VS YAGO
5.7%
VS YAGO
+15.6%
+7.7%
+2.7%
-3.1%
The average number of unique items (SKUs) per d-store/week grew 6.4% to 27 items* in Safeway NorCal
Make promotions more effective, as prices in ROM are lower than in SFY Nor Cal
Opportunity in dinner sausage
Take advantage of growth in flavors
BBQ
Spicy
The average number of unique items (SKUs) per d-store/week declined 3.2% to 63 items* in Safeway NorCal
Average Retail Price
$4.96
+6.1% vs. YAGO
6.9%
VS YAGO
5.9%
Dollars per $MM ACV Sales
Volume per $MM ACV Sales
Smoked
Limit available items to become more efficient.
Safeway NorCal has more items but fewer sales per store/week than its ROM
Source: Nielsen Perishables Group - Columbus Safeway NorCal Meat Wall Landscape Analysis

5. Promotional Best Practices
Benefit the Entire Category
Focus on Your Brand
The more items on promotion, the bigger the impact on the category
Promotions featuring multiple brands/sub-categories were most impactful – drawing more attention to the meat wall overall
Run ISPR and feature promotions simultaneously for largest impact across the whole category
Promotion discounts should average around 24% and no higher than 41% to impact both the item and entire category
Individual items had larger impacts, when fewer items were promoted
Conventional items benefited more from being promoted on their own
Promote with other successful brands and sub-categories, such as Oscar Meyer and 4x6 Wallet Packs
Include ‘health/better for you’ claims for items on promotion
Consider ‘must buy 3’ promotions, as they had the highest category dollar and volume impacts, with lower discounts and suggest more ‘buy one get one’ promotions to drive incremental volume
Source: Nielsen Perishables Group - Columbus Safeway NorCal Luncheon Meat Promo Best Practices Analysis

6. Leverage Optimal Price Gaps Foster Farms, Turkey, Peg, Conventional
Price Gap Analysis
Pinpoint Base Sales
Leverage Optimal Price Gaps
Avg. threshold is lower/ less ‘giving’ for conventional vs. BFY products
Manage gap at or below threshold to maximize sales and minimize switching
BFY shoppers not as ‘swayed’ by price differences of Conventional products
BFY branded items started to see a slight drop in sales only when the gap to the conventional product widened to the $4+ dollar range
Foster Farms, Turkey, Peg, Conventional
Oscar Mayer Foods Corp., Ham/Turkey, Deli Tubs, Natural
vs.
Oscar Mayer Foods Corp., Ham/Turkey, Wallet, Conventional
Organic Prairie, Turkey, Peg, ABF/No Nitrites/Organic
Source: Nielsen Perishables Group - Columbus Safeway NorCal Price Gap Analysis

7. How we can advise… Large assortment of items in SFY Nor Cal …
Assortment Strategy
Pricing Strategy
Promotional Strategy
Large assortment of items in SFY Nor Cal …
Capitalize on the growth of branded items
Differentiate from everyday brands and the wide array of competitive products- be selective in the items (types/flavors/sizes/etc.) to introduce in-store
Encourage higher trial rates when introducing the product line—recommend that SFY not promote competitive brands at the same time (more promotions equal more sales dispersed across individual items) as their brand (BFY/ Brands)
Loyal BFY shopper base (possibly the BFY consumer has already made the decision to buy on health – less sensitivity despite price or influenced by promotions); however…
Be mindful of conventional items - maintain a price gap of less than $4+, as a sales start to drop around this ‘threshold’
Capture sales outside shopper base – take advantage of when PL (BFY) is priced higher than competitive products – shoppers switched to branded
Heavy promotional activity in SFY Nor Cal even without ISPR…
Activate on any/all promotional activities. As in-store performs well there’s opportunity to discuss with SFY promotions not as typically/frequently run, but that had good sales in response to the promotion… ‘buy 1 get 1’ or ‘must buy 3’
Recognize BFY sales are more impacted, when conventional is promoted - although BFY is discounted more heavily, the majority of sales are conventional
Source: Nielsen Perishables Group